Online tax collection - who pays the credit card company?

[Stephen Tashiro]

When online companies collect taxes on an order and are paid by credit card, how is the card company's fee on the tax portion of the bill itemized? Does the state collecting the taxes pay the fee on the taxes? Does the merchant treat the fee as an his own expense? Or is the fee added to the customer's bill and lumped under the heading of "tax"?

My uninformed guess is that the merchant treats it as a business expense because I also guess that's how they would treat the costs of collecting and keeping track of taxes in a brick-and-mortar store.

[Mike Henderson]

I assume you mean sales tax. To the best of my knowledge, the merchant pays all the credit card fees and has to send the full amount of sales tax to the entity levying the sales tax. The credit card fees are just a business expense.

Mike

[Robert McGowen]

In my experience, Mike is correct, at least in Texas.

[Michael Dunn]

I myself lump it in with the advertised price of the transaction. It's a cost of business that is typically passed down to the consumer whether they're aware of it or not. I never like that until I started my own business.

[Bill Cunningham]

Yup.. that's how it works here too.. I pay my merchant fees based on the line marked 'Total' Which includes any and all taxes.