How Much Interchange was Paid on Sales Tax in the U.S.?
CMSPI estimates that U.S. merchants paid nearly $8 billion in interchange on sales tax, gasoline and diesel excise taxes, and alcohol excise taxes. Read below to see how the impact differed by state.
Estimated Interchange Paid on Select State-Level Taxes
Methodology
Interchange Paid on Sales Tax
We have taken the sales tax data from (Source 1) to show total sales tax paid by state, and then using public financial reports from Visa and Mastercard, ascertained the total volume through debit and credit cards, which have been split by state by GDP (Source 2).
Total interchange fees charged on credit vs debit cards have been analyzed from the Nilson Report on card fees and Federal Reserve data on debit card interchange fees.
Interchange Paid on Gasoline and Diesel Excise Tax
Using state-by-state gasoline and diesel consumption data (source) and state-by-state excise tax rates for diesel and gasoline (source) from the EIA, we’re able to estimate the total excise tax expenditure by state. Total interchange fees charged on credit vs debit cards have been analyzed from the Nilson Report on card fees and Federal Reserve data on debit card interchange fees.
Interchange Paid on Alcohol Excise Tax
Sourcing beer, wine, and spirit consumption by state, we calculate the total excise tax expenditure by state using the excise tax rate by state as reported by the Tax Policy Center. Total interchange fees charged on credit vs debit cards have been analyzed from the Nilson Report on card fees and Federal Reserve data on debit card interchange fees.