Ways & Means Committee looks at credit card processing fees
Focusing on next year’s state budget, the S.C. House of Representatives’ Ways & Means Committee blocked an earlier proviso ban on credit card fees 84 to 31.
But a new proviso concerning processing fees, if passed, could mean more paperwork for local governments and changes to the tax bill explaining credit card processing fees and mandatory tax payments. The bill would ensure that local governments do not charge an excess of processing fee costs incurred by that government for the transaction.
The issue got started after a resident living in the Low Country complained they were being charged various processing fees by their local government, according to S.C. Rep. William “Bill” Clyburn, D-Aiken. Clyburn is also a member of the Ways & Means Committee.
“What we have are local governments, and when residents pay taxes by credit card, there’s an interest that local governments are charging,” Clyburn said. “Some of the interest that some, not all, local governments are charging are higher. There’s a belief that there shouldn’t be any interest, as long as they get the fee.”
When Aiken County residents use a credit or debit card to pay their taxes currently, the County charges a convenience fee of 2.5 percent on any payments made alone. The fee is calculated and shown on the computer screen before the taxpayer agrees to finalize the payment.
In the County, roughly 120,000 property tax payments are made a year, and on average, roughly 10,000 to 12,000 car payments are made per month. About 12 percent of people pay with credit or debit cards.
But that number could rise, according to County Administrator Clay Killian.
“The way of the world now is using credit and debit more than checks and cash,” Killian said. “People use them now because you can get travel or reward points.”
If the original ban had stood, Jason Goings, County Treasurer, said there would be a lot of issues because the County may have been forced to look at other ways to bring in revenue.
“You’d have to do something to offset it, but it’s off the table right now anyway,” Goings said. “The only purpose behind the fee is to cover costs only, not to make money. The intent of this practice is so counties and municipalities do not intentionally make any money off of this.”
Clyburn said he still has mixed emotions on the subject.
“That’s why I’m still open to discussion, and I will come down on the side of the local government not losing profit,” Clyburn said. “Because that would mean they would have to look at other issues like expenses.”
Maayan Schechter is the local government reporter with Aiken Standard.