Washington has no law that bans or caps credit card surcharges, and a full read of RCW 19.86, the state’s Consumer Protection Act, confirms there is nothing on point there either. But Washington does answer a narrower and more useful question almost no consumer-facing coverage of this topic touches: can a merchant deduct the cost of accepting your card from what it owes in state tax? The Department of Revenue’s own administrative rule says no, in writing, and the reasoning lines up Washington against Michigan on one side of this series’ tax-treatment split and Alabama on the other.

No General Surcharge Law, and the State’s Own Silence Confirms It

RCW 19.86, Washington’s Consumer Protection Act, is the state’s general unfair-and-deceptive-practices statute, the kind of broad law that state-by-state surcharge roundups often cite without actually reading. Read start to finish, it contains zero provision naming card surcharges, checkout fees, or payment-method pricing of any kind. It bans unfair methods of competition and unfair or deceptive acts in trade generally, the same statute that covers false advertising or bait-and-switch pricing, and a credit card surcharge simply never comes up in it. Washington has never passed, and does not currently have pending, a dedicated surcharge-ban or surcharge-cap statute comparable to Colorado’s 2% limit or Connecticut’s outright prohibition.

That leaves Washington merchants bound only by the card networks: signage at the door and register, a surcharge that cannot exceed the merchant’s real cost of acceptance, and the same 3% Visa and 4% Mastercard ceilings that apply almost everywhere else in this series. Nothing in Washington law adds a state-specific limit on top of that.

Washington’s Real Answer: You Can’t Deduct the Card Fee From Your Tax Bill

Where Washington actually takes a firm position is in WAC 458-20-108, the Department of Revenue’s rule defining “selling price” for B&O and retail sales tax purposes. Subsection (5), titled “Credit card service fees,” states it plainly: “When a seller allows a buyer to charge purchases on a credit card, the institution that issued the credit card charges a service fee to the seller. The service fee charge is a part of the seller’s cost of doing business. Because the service fee is a cost of doing business, the seller may not deduct the fee when determining its B&O tax and retail sales tax liabilities.” The rule cites RCW 82.04.070 and 82.08.010 as its statutory basis.

Read narrowly, that sentence is about the fee a card network charges the merchant for accepting cards, the interchange cost, not a fee the merchant charges you at the register. But it plugs directly into the same “selling price” definition the rule spells out earlier: Washington’s tax base is the total consideration a buyer pays, with no deduction allowed for “the cost of materials used, labor or service cost, interest, losses, costs of transportation to the seller, taxes imposed on the seller, and any other expense of the seller.” Washington has never carved out an exception for a card-acceptance fee, whether the merchant absorbs it silently or passes it to you as a line-item surcharge. A dollar you pay because the merchant is recovering its credit card cost is still a dollar of consideration for the sale under that definition, and the Department of Revenue’s own rule treats the underlying fee as an ordinary, non-deductible cost of doing business.

Where That Leaves Washington Next to Michigan and Alabama

This is the third state in this series to answer the same underlying question, does the state let a card-acceptance fee reduce what’s taxed, and each has reached a different mechanism to get there. Michigan’s Department of Treasury ruled directly that a surcharge itself is part of the taxable “sales price” under the state’s General Sales Tax Act, so the fee gets taxed alongside the purchase no matter how it’s itemized. Alabama went the other direction with an actual statute, SB 221, which excludes a clearly itemized credit card fee from the sales and use tax base entirely, so long as it appears as a separate line item from the price of the purchase.

Washington has no statute doing what Alabama’s does, and its administrative rule reaches Michigan’s result by a different route. Michigan taxes the surcharge because its Treasury read the fee as part of the “sales price” a buyer pays. Washington’s rule instead blocks the deduction on the seller’s side, but the practical effect for a Washington shopper is the same as Michigan’s: there is no itemization trick that gets a credit card surcharge out of the state’s tax base, because no Washington statute creates one. A merchant in Olympia surcharging $3 on a $100 purchase has no more basis to argue that $3 escapes tax than a merchant in Detroit does. Alabama remains the outlier of the three, the only one of these states to write a deduction into statute rather than leave the question to a general “no deduction for expenses” rule.

What to Actually Check on a Washington Receipt

• On the receipt itself: Retail sales tax should be calculated on the full amount charged, including any surcharge. A receipt that taxes only the pre-surcharge price is arguably under-collecting relative to how Washington’s Department of Revenue treats the underlying fee, not doing you a favor.
• For the surcharge amount: There is no Washington-specific dollar or percentage cap. The only ceilings are the card network rules: 3% on Visa, 4% on Mastercard, and never more than the merchant’s actual cost of acceptance.
• For disclosure: Network rules require signage at the entrance and the point of sale, plus a surcharge broken out as its own receipt line, not folded silently into the total. Washington law adds nothing to this beyond the general Consumer Protection Act’s ban on deceptive pricing practices.
• On a debit card: Never surchargeable, in Washington or anywhere else, regardless of state law.

Where to Report a Problem

A Washington surcharge with no signage, or one buried into the total instead of broken out, is a card network rule violation reportable to Visa or Mastercard directly, and it may also implicate RCW 19.86’s general ban on deceptive trade practices if the pricing was actively misleading. The Washington Attorney General’s Consumer Protection Division takes complaints under that statute. A dispute over whether sales tax was calculated correctly on a surcharged bill is a matter for the Department of Revenue, not the Attorney General’s office.

The Card Math: Why a Flat-Rate Card Offsets the Hit

If a Washington merchant surcharges you and the state taxes the full surcharged total on top, the card in your wallet is the only lever you control. A flat 2% cash-back card claws back roughly two-thirds of a 3% Visa surcharge and half of a 4% Mastercard surcharge, without needing the purchase to fall into a bonus category first. The Citi Double Cash Card earns a flat 2% on every purchase, 1% when you buy and 1% when you pay it off, with no annual fee and no categories to track, which makes it one of the more dependable ways to offset a cost that Washington gives you no legal way to avoid at checkout.

Bottom Line

Washington has no law banning or capping merchant credit card surcharges, so surcharging there runs on Visa and Mastercard’s network rules alone. What Washington does have is a Department of Revenue rule, WAC 458-20-108(5), stating that a credit card service fee is a cost of doing business a seller cannot deduct from its B&O and retail sales tax liability, which leaves no itemization path around the tax the way Alabama’s statute does. Check your receipt for tax calculated on the full surcharged total, and know that the 3%/4% network caps remain the only ceiling on the fee itself.

FAQ

Q: Is it legal for a store to charge a credit card fee in Washington?
A: Yes. Washington has no state law banning or capping merchant surcharges. RCW 19.86, the state’s Consumer Protection Act, is silent on card surcharges. It’s legal as long as the merchant follows Visa or Mastercard’s disclosure and cap rules.

Q: Does Washington let merchants deduct credit card fees from their sales tax?
A: No. WAC 458-20-108(5) states that a credit card service fee is “a part of the seller’s cost of doing business” and that “the seller may not deduct the fee when determining its B&O tax and retail sales tax liabilities.”

Q: How is that different from Michigan and Alabama?
A: Michigan’s Department of Treasury ruled directly that a surcharge is part of the taxable sales price. Alabama’s SB 221 does the opposite, excluding a clearly itemized credit card fee from the sales tax base. Washington has no statute like Alabama’s, so its administrative rule against deducting the fee reaches Michigan’s practical result by a different route: there is no way to keep the fee out of the state’s tax base.

Q: Is there a state-specific cap on the surcharge amount in Washington?
A: No. Washington sets no dollar or percentage limit of its own. The only ceilings are the card network rules: 3% on Visa, 4% on Mastercard, and never more than the merchant’s actual cost of accepting the card.

Q: Can I be surcharged on a debit card in Washington?
A: No. Washington has no state statute on this specifically, but Visa and Mastercard’s network rules prohibit surcharging debit or prepaid transactions everywhere, Washington included.

For how the other 50 states handle this, see our state-by-state credit card surcharge law breakdown.