Taxpayer Watchdog Warns That Proposed Legislation Threatens Higher Prices for Small Businesses and Consumers

For Immediate Release

Contact: Kara Zupkus (224) 456-0257

Washington, D.C. – Today, the Taxpayers Protection Alliance (TPA) called on Texas legislators to reject SB 2026/HB 4124, legislation that would force small businesses to implement expensive payment system changes while imposing unnecessary burdens on consumers. The bill would undermine Texas’s free-market principles, disadvantage local financial institutions, and ultimately harm the state’s economy.

David Williams, Taxpayers Protection Alliance (TPA) President offered the following comment:

“This legislation directly threatens Texas entrepreneurship by imposing costly new payment processing requirements, which only large corporations will be able easily to absorb. While major retailers have the infrastructure to handle these changes, small businesses across Texas would face significant financial strain at a time in which they are battling inflation and rising operational costs.

“The proposed bill would require merchants to separate sales tax and tips from the total transaction amount at point of sale, potentially forcing small businesses to invest thousands in system upgrades. Critics note this approach is similar to that of problematic legislation from Illinois, which has triggered expensive taxpayer-funded litigation and created special advantages for out-of-state financial institutions.

“The bill would particularly harm Texas-based community banks and credit unions, which have faithfully served local businesses for generations, placing them at a competitive disadvantage against national banking giants.

“Texas has built its prosperity on limited government and fair competition, not picking winners and losers in the marketplace. TPA strongly urges all lawmakers who value economic freedom to stand with small businesses, consumers, and local financial institutions by opposing this misguided legislation.”