The Senate Committee on Economic Development and Agriculture discussed credit card surcharges added to bills by businesses to cover processing fees Wednesday. Some senators expressed concern that eliminating the 3 percent charge could result in higher overall costs for consumers.
Sen. Marvin Blyden, who introduced the bill, pointed out that other areas, such as Puerto Rico, eliminated the charge. He said the bill’s purpose was to ensure that consumers would know up front what they would be charged for an item or service.
The bill had two main components: 1) No person, merchant, corporation, or vendor shall impose a surcharge on a consumer who chooses to use a credit card instead of cash, check, or any similar means of payment in any transaction, and 2) merchants may offer discounts to promote payment in cash, check, or any other similar method that does not involve the use of a credit card.
“The bill’s prohibition on credit and debit card surcharges is consistent with the Department’s ongoing efforts to safeguard consumers from unfair or deceptive payment practices. Similarly, the bill’s express allowance of cash discounts provides much-needed clarity in an area that has, until now, remained somewhat ambiguous in our statutory framework,” Licensing and Consumer Affairs Department Assistant Commissioner Horace Graham testified.
However, his advocacy for the bill was not enough to move the bill out of the committee. It was tabled.
“It must be understood that credit card fees are the cost we all pay for the convenience of the use of credit,” John P. Woods, president of St. Thomas-St. John Chamber of Commerce testified.
“If this cost were not shown, it would still be included in the price of the ultimate product or service,” he added.
Glendina Matthew, director of the Division of Banking, Insurance and Financial Regulation, also opposed the bill, stating that it would adversely affect insurance agencies in the territory.
The second bill considered by the committee would add the words “regardless of physical location” to the law concerning the collection of gross receipts taxes from companies doing hurricane rehabilitation projects in the territory.
Testifiers stated that the bill would generate $22 million for the government’s coffers from upcoming FEMA projects. It was forwarded to the Rules and Judiciary Committee.
Sen. Novelle Francis approved the bill because it closes a loophole through which the territory has lost millions in tax revenues.
“The bill will improve the existing language of the Virgin Islands Code by clarifying that excise and gross receipts taxes apply to all types of entities that perform business activities in the Virgin Islands, even if the entities are created, formed, managed, or even headquartered outside of the USVI,” Director V.I. Bureau of Internal Revenue Joel Lee testified.
Senators in attendance included Hubert Frederick, Angel Bolques Jr., Alma Francis Heyliger, Novelle Francis Jr., Kenneth Gittens, Marise James, Franklin Johnson, Clifford Joseph, Avery Lewis, and Milton Potter.
