Cal. Code Regs. tit. 18 § 1643

Current through Register 2024 Notice Reg. No. 50, December 13, 2024

Section 1643 - Debit Card Charges

Generally, tax does not apply to automated teller machine (A.T.M.) charges when an access device (commonly known as a debit card or credit card) is issued to make a cash withdrawal from, or to engage in any other transaction that is not subject to tax at, an A.T.M. The transaction is not regarded as a sale of tangible personal property but is a nontaxable financial transaction.

Debit cards may also be used by consumers to pay for a retail purchase of tangible personal property. Gross receipts from the retail sale of tangible personal property do not include debit card charges which the retailer may collect from the customer when all of the following apply:

(1) the debit card charges are separately stated,

(2) the consumer would not incur the charge if he or she did not use the debit card,

(3) the fee is not calculated as a percentage of the amount of the purchase, and

(4) the charge is reasonably related to the cost of the transaction to the retailer.

Under these circumstances, the charge is regarded as a cash access fee and is not subject to tax.

Cal. Code Regs. Tit. 18, § 1643

1. New section filed 8-23-96; operative 9-22-96 (Register 96, No. 34).

Note: Authority cited: Section 7051, Revenue and Taxation Code. Reference: Sections 6011 and 6012, Revenue and Taxation Code.

1. New section filed 8-23-96; operative 9-22-96 (Register 96, No. 34).