Today in Olympia, state senator Randy Gordon (D-41) filed a bill that would impose an additional tax on banks and other institutions that charge ATM fees or surcharges in excess of $1.50.
The more the banks charge, the more the banks would have to pay. The bill would impose the charge "on the gross income of a financial institution from automated teller machine access fees or surcharges in excess of one dollar and fifty cents." In other words, everything over $1.50 would be taxed, says Gordon. If passed, the state would slap on a five percent tax on the gross ATM fees between $1.50 and $2.00, a 7.5 percent tax on fees between $2.00 and $2.50, and 10 percent tax on charges above $2.50.
For example, many of the Chase ATMs (and other banks, too) charge $3.00 per transaction. That's a $0.15 tax on the bank (10 percent of the amount over $1.50). One one hand, all those ATM fees could help the state generate revenue to help close its budget gap.
But there are two question this raises: Could this possibly persuade banks to drastically lower their expensive ATM fees? Or could banks just raise the price of those ATM fees even higher to make up for the tax? Regarding the latter, senator Gordon says, "I think not. If their repsonse is to go raise fees, then the leguslature can raise the rates." Gordon adds, "The higher their fees, the higher the amount the community will get back from those excess profits." The bill, which Gorton says has support from the Senate Democratic leadership, also mandates a review of the policy in 2015 to see if banks have raised ATM fees.