It’s not about payments to the state, they’re saying no payment processor can charge a fee on taxes or tips as I understand. So if you pay at a restaurant, have a $53 tab, tip $10 so your total is $63, according to this law the processor can only collect the fee on the $53 and not the $10, which none of the payment infrastructure is currently set up to handle. Basically the entire credit/debit card payment system needs to be overhauled to accomodate some stupid overreaching state law in IL passed by state legislators who probably didnt’ even know what they were voting on.
I get why the card processors are up in arms. And that is who were first opposed to the new law. They have to totally revamp their system, just for IL. That is going to cost a LOT of money. Having worked in government contracting I learned some lessons. One being that compliance isn’t the hardest part. Being able to prove, document, and satisfy the regulatory bodies and their auditors? That’s the hard, and expensive, part. So yeah this is gonna cost the processing industry a lot of money.
Now here is why the people of IL SHOULD be pissed off. Do you think the processing companies are gonna eat that cost? Nope! Processing usually entails a subscription cost plus swipe fees. The cost to the retailer in IL is going to go up to cover the costs. The retailer will have to adjust their prices to cover the added expense. So the customer will pay more, even if they are paying cash. All for the “feel good” about not paying a few cents in swipe fees on taxes and tips.
Regulatory compliance is a bigger drag on the economy than taxes. It drives up prices more than taxation. It is a huge hidden cost imposed by the government and it impacts every aspect of your life.
See, I’m all good bashing politicians. I just want to bash them for the right reasons. This will drain money from IL companies and the IL consumer, and the state won’t even get the benefit of increased revenue like they would if it actually was a tax.