As a small business owner, I know that every dollar counts. At Joe’s Real BBQ in Gilbert, we have worked hard to serve our community, support our employees and provide a great dining experience since 1998. But one of the most frustrating costs we face is something many customers don’t even realize exists — credit card swipe fees.
Every time a customer pays with a credit or debit card, we’re charged a percentage of the transaction by big banks and credit card companies. These swipe fees typically range from 1% to 5%, costing small businesses like mine thousands of dollars each year. These fees aren’t just charged on the cost of the meal, but also on the sales tax that we collect and pass on to the state. That means credit card companies are making millions of dollars off the top of Arizona sales tax that local businesses have to pay.
In 2023 alone, Arizona businesses paid more than $217 million in swipe fees on sales taxes. That’s money that could have been reinvested into higher wages for employees, better benefits, and improvements to our business. Instead, it went to Visa and Mastercard, which dominate 90% of the payment processing market.
That’s why I support HB2629, a bill that would ensure credit card companies can only charge swipe fees on the pre-tax amount of a transaction — not the total price including sales tax. This commonsense reform would save Arizona businesses millions of dollars annually and allow small business owners like me to reinvest those savings into our employees and our community.
Small businesses are the heart of Arizona’s economy. We create jobs, offer unique local experiences and contribute to our communities in ways that large corporations can’t. But we need a level playing field to succeed.
We would much rather put that money where it truly belongs — in our businesses, in our employees and in the communities we serve.
Lawmakers must take action to stop credit card companies from profiting off the taxes we collect and support HB2629. The House Commerce Committee, under Rep. Jeff Weninger’s strong leadership, had the good sense to pass HB2629 in committee last week, and now the bill will move on to consideration and vote by the full House, likely within in the next two weeks. For small business owners and local residents who care about over taxation, burdensome regulations and exorbitant credit card fees, I encourage you to visit www.WipeTheSwipe.com to add your name or business to the growing list of community supporters.
Tad Peelen is an owner and the Operating Partner of Joe’s Real BBQ in Gilbert, Arizona.
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