Massachusetts Payments Commission Debates Fee Relief for Restaurants on Tips and Taxes

BOSTON — May 6, 2026 — Massachusetts restaurant owners told a state payments commission they are paying millions annually in card processing fees on money that never belonged to them. The Joint Special Legislative Commission to Study the Future of Payments and Sales Transactions by Credit Card and the Impacts for Small Business, co-chaired by Senator Paul Feeney and Representative Jamie Murphy, held its second public hearing May 6 at Gartner Auditorium, hearing from 14 witnesses sharply divided over whether the state should exempt sales taxes and tips from interchange fee calculations. Jen Ziskin of Mass Restaurants United testified that her restaurant La Mora paid $38,000 in processing fees in a single year on $92,000 monthly sales, leaving a profit of roughly $84. Kristen Canty of the Woods Hill restaurant group said her four locations paid approximately $488,000 in processing fees last year, with an estimated $130,000 charged on tips and taxes. Murphy pushed back against payments industry claims of technical impossibility, saying backing the 6.25 percent sales tax out of the state's $10 billion in annual sales tax collections could return as much as $200 million to small businesses. The Electronic Payments Coalition argued that consumer card transactions transmit only a total amount with no tax or tip breakdown, making any state-level carve-out a potential restructuring of a global payments standard.