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D.C. Council member Charles Allen (D-Ward 6) joined Shawn Townsend, the president and CEO of the Restaurant Association Metropolitan Washington (RAMW), at a news conference to announce the re-introduction of The Fair Swipe Act on Feb. 20 at the Dubliner restaurant in Northwest.
The Fair Swipe Act is legislation that would prohibit banks and large credit card companies from including sales tax and gratuities when collecting swipe fees. Annually, swipe fees on sales tax and tips costs drive up the cost for a business by thousands of dollars.
RAMW estimates a full-service restaurant could save around $14,500 per year just by excluding tax and tips from the swipe fee. Currently, whenever a customer uses a credit or debit card to pay for their purchase at a retailer or restaurant, the banks or credit card companies providing the service charge the business an interchange fee (commonly a “swipe fee”) to process the charge.
These fees are a percentage of the total sale, usually 2-4%, and currently include the cost of sales tax and any tip.
“There is no reason banks and large companies like Visa and Mastercard should profit from the required collection of sales tax and tips,” said Allen. “They don’t help the business remit the sales tax or distribute the tip to the employee. They’re just a middleman driving up the cost of dinner or a coffee.”
Allen termed the fight to enact his legislation as” David vs Goliath.”
“Who would you rather see have a little more money in their bottom line? Your favorite local restaurant or one of a handful of companies like Visa or Mastercard, both of whom earned more than $25 billion last year? That’s an easy call for me,” the legislator said. “I stand with my local businesses and my residents.”
The Fair Swipe Act is co-introduced by Councilmembers Christina Henderson (I-At Large), Brianne Nadeau (D-Ward 1), Brooke Pinto (D-Ward 2), and Robert White (D-At Large).
As president of RAMW and a founding member of the coalition, Townsend expressed his full support for Allen’s legislation.
“The restaurant industry is proud to stand with the Fair SWIPE Coalition in this fight,” said Townsend. “Our members serve as cornerstones of their communities, creating thousands of jobs and helping fund essential services through tax collection. Yet they lose money on every dollar of tax they collect because of these excessive fees. It’s time to level the playing field between Main Street and Wall Street.”
Source: Published without changes from Washington Informer Newspaper
