CASH MANAGEMENT.

• Position: Brief Article - Statistical Data Included

Fee or Free?

Swope, Christopher

Governing, July 2001, pp. 46-47.

An increasing number of governments are now offering online tax payment in an effort to make the process of tax collection more convenient and cost effective for all parties. While most governments are realizing these benefits, many are grappling with the question of who should pay the transaction fees that credit card companies charge. Most have chosen to pass these fees, which range from 1 to 3 percent, on to the taxpayer. However, some tax collectors contend that the increased efficiencies of e-taxation justify government payment of transaction fees and that passing the fees on to the taxpayers will negate the benefits of such a system by discouraging taxpayers to use the service. On the other hand, these fees can add up quickly for large governments that collect millions or billions of...