Credit card surcharging is one of those topics that can get confusing pretty quickly. Between state laws, federal rules, and card network regulations, it’s not always clear what businesses in Washington can and cannot do when it comes to passing processing fees to customers. Plus, new bills are constantly being introduced to address swipe fees.
This guide breaks down everything you need to know about the surcharge laws in Washington state, so you know exactly where things stand in 2025.
Disclaimer: This information is provided for reference purposes only and does not constitute legal advice. For specific legal guidance, consult with an attorney.
Can Businesses in Washington State Charge a Surcharge Fee on Credit Cards?
Yes, credit card surcharge fees are legal in Washington.
There are currently no state-specific laws prohibiting this practice in the state of Washington. This means that merchants can simply follow federal rules and the card network requirements set by Visa, Mastercard, Amex, and Discover to remain compliant.
The maximum surcharge that can legally be added to credit cards is 4% of the transaction total. But the card network’s cap is generally lower, at 3% of the transaction.
What About Debit Card Transactions?
Even though credit card surcharging is legal in Washington, debit card surcharging is strictly prohibited.
Surcharging debit cards is illegal in all 50 states. It’s a federal law that’s part of the Durbin Amendment to the Dodd-Frank Act, and it applies to both PIN and signature debit cards (meaning even if you route a debit card transaction as a credit card, you still can’t legally surcharge it).
Read More: State-by-State Guide to Credit Card Surcharge Laws
Government Entity Surcharging Practices in Washington
Interestingly, the state of Washington explicitly allows both state and local governments to apply surcharge fees on electronic payments.
While not required, Washington’s Municipal Research and Services Center (MRSC) provides specific guidance on credit card acceptance. MRSC says that local governments can choose to surcharge credit card payments as long as the surcharge fee is not greater than the average discount rate and is capped at 4%.
This is essentially saying that the surcharge fee can’t exceed the cost of acceptance, while still aligning with the 4% federal maximum.
The guidance continues to say that:
- All surcharge fees must be clearly disclosed both on premises and online (if cards are accepted online).
- Surcharges must be shown as a separate line item on the front of receipts, after the subtotal but before the final amount.
- Card brands and acquiring banks must be notified at least 30 days in advance to start a surcharge program.
It’s fair to say that if local and state governments have to follow these rules, then private businesses can follow the same rules to stay compliant.
Washington State Tax Considerations For Surcharges
According to the Washington State Department of Revenue, surcharges added to cover business costs (including credit card processing fees) are subject to state taxes.
The surcharge fees are included in the final sales price, and cannot be deducted from taxable amounts—even when listed separately on invoices.
Washington State Legislature WAC 485-20-108, also provides clear guidance that says surcharge fees are subject to state sales tax.
This means that Washington businesses need to account for state tax obligations when implementing surcharge programs. It also means that customers pay taxes on surcharge fees.
So if you’re surcharging credit card transactions in Washington, you’re hitting your customers with two extra charges from the advertised price (surcharge, plus tax on surcharge).
How to Report Surcharging Violations in the State of Washington
The state of Washington has an informal complaint resolution service that’s facilitated by the Office of the Attorney General. If you suspect a business in Washington is illegally surcharging transactions, you can file a complaint online here.
You can also download a PDF complaint form and mail it to:
Seattle
800 5th Ave. Suite 2000
Seattle, WA 98104-3188
If you prefer to call with questions, dial 206-464-6684 (or toll-free in Washington only at 1-800-551-4636).
While surcharging is legal, common violations could include:
- Surcharges that exceed 4% of the transaction amount.
- Surcharges applied to debit cards.
- Failing to disclose surcharge fees.
- Not collecting tax on surcharges.
Consumers can also feel free to drop a comment on this page to let us know how you feel about businesses adding surcharge fees when you pay using a credit card in the state of Washington.
Final Thoughts: Is Surcharging Worth it in Washington?
Washington’s current stance on surcharging is relatively straightforward. It’s legal for businesses to impose a surcharge fee when customers pay with credit cards, and government entities throughout the state follow this practice.
However, that doesn’t necessarily mean your business should surcharge your customers.
You still need to comply with federal laws and card network rules, both of which can be subject to hefty fines for non-compliance.
But legality aside, you need to think about what you’re actually doing here and the long-term impact on your business. Let’s say you decide to add a 3% surcharge fee on credit card transactions. How much money are you really going to recoup from each transaction? Maybe a dollar or two?
And think about how your customers will feel about this—especially since they need to pay tax on this extra fee. Are you really willing to lose customers over a dollar? When you look at it this way, it’s usually not worth it.
Alternatively, you can look for other ways to lower your credit card processing costs. Contact our team at MCC for a free audit. We’ll help you save money on payment processing, without switching providers, changing operations, or burdening your customers with additional fees.