Credit Card Transaction Fees No Longer Subject to Sales Tax

The Alabama Department of Revenue has issued an amendment to a sales tax regulation that reflects recent change in Alabama law that, effective as of September 1, 2026, the amount of any credit card transaction fee charged for an electronic payment transaction is to be excluded from the tax base on which sales and use tax is calculated and assessed for that electronic payment transaction. Specifically, the amended rule provides that “to be excludable from the measure of sales and use tax,” the credit card transaction fee must be “separate and identifiable from other charges.”  Amended Regulation here.