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CREDIT CARD CHECK OUT FEE

  • 1.  CREDIT CARD CHECK OUT FEE

    Posted 28 days ago
    Hi all there,
    I have a question on sales tax: NJ client plans to charge additional 3% surcharge on top of selling price to customers pay in credit card.   I would like to know whether the additional charge subjected sales tax in NJ or not?

    Thank you!

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    LAN GOLI
    PRO ADVISOR TAX AND BOOKKEEPING SERVICE
    WHITESTONE NY
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  • 2.  RE: CREDIT CARD CHECK OUT FEE

    Bronze Most Valuable Member
    Posted 27 days ago
    Be careful of the wording. In Massachusetts charging a “surcharge” is not allowed- this violates our banking laws. Instead you need to call it a “convenience fee.” Not sure about NJ Banking laws.
    Best
    Irene

    Wachsler CPA, LLC
    Irene Wachsler, CPA
    781.883.3174
    irene@iw-cpa.com
    Sent from my iPhone




  • 3.  RE: CREDIT CARD CHECK OUT FEE

    Posted 27 days ago
    Yes, there are still a few states prohibit the credit card check out fee, but NJ is not among them.    NY prohibits, but if charged already, NY requires added to gross sales to calculate sales tax.  there was a private ruling  https://www.tax.ny.gov/pdf/advisory_opinions/sales/a18_1s.pdf

    which says that.

    I feel since NJ allows, so should be handled similar like NY because the restaurant's merchant service expense is the same prior the surcharge.  If the merchant fee was not removed from sales, then the surcharge should not either.

    Hope someone can clarify since I cannot find any NJ sales tax opinion yet.   If cannot get suggest from here, I may submit a ticket through email to NJ state.

    Thank you so much.

    Lan

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    LAN GOLI
    PRO ADVISOR TAX AND BOOKKEEPING SERVICE
    WHITESTONE NY
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