5 min read

Do You Charge Sales Tax on Credit Card Surcharges?

 

Content provided for general information. Talk to your advisor to learn about recent updates or other rules that may apply to your situation.

Sales tax usually applies to credit card processing fees and surcharges. Here’s what you need to know.

In This Post

  • Credit card processing fees: Fees charged to the merchant by credit card companies or payment processors. Usually not seen by the customer.
  • Credit card surcharge: An additional fee added to the selling price that the customer pays.
  • Convenience fees: Like a surcharge but subject to different credit card processing rules.
  • When sales tax and income tax applies
  • Can you reduce the sales tax and processing charges paid?
  • Can you pass on the costs to your customers?

Are credit card processing fees subject to sales tax?

The credit card fees you pay on credit card transactions usually don’t affect sales tax. Sales tax is typically based on the sales price.

Current subscribers click here to log in.