Credit Card Surcharge Laws in Alabama (2026 Guide)

Is it legal to surcharge credit cards in Alabama?

Yes. Alabama has no state law that restricts, caps, or bans credit card surcharging for private businesses — the National Conference of State Legislatures lists Alabama's surcharge prohibition status as "None." That means Alabama merchants simply follow the same baseline rules that apply nationwide: card network rate caps, the cost-of-acceptance limit, mandatory disclosure, and the debit card exclusion.

The rules that still apply

• Visa caps the surcharge at 3% of the transaction; Mastercard caps it at 4% — most merchants use the lower 3% figure since they accept both. See the full national rules guide for details.
• The surcharge can never exceed the merchant's actual cost of accepting the card.
• Debit and prepaid cards can never be surcharged, even if run as "credit" at the terminal — this is federal law (the Durbin Amendment), not a state rule, so it applies in Alabama regardless.
• Merchants must give their processor 30 days' written notice before turning on a surcharge, and disclose it via entrance signage, a point-of-sale notice, and a separate receipt line item.

Alabama's new 2026 rule: credit card fees are exempt from sales tax

Alabama Senate Bill 221, signed by Governor Kay Ivey on April 22, 2026, excludes credit card transaction fees from the state's sales and use tax calculation, effective September 1, 2026 — before this law, the Alabama Department of Revenue's policy required merchants to include card fees in the taxable sales price. Under SB221, the fee itself is no longer subject to state sales tax, so tax is calculated on the price of the goods or service, not the transaction fee added on top (Avalara, Alabama Reporter).

How PayWavez keeps this compliant

PayWavez, headquartered in Gulf Shores, applies a standard 3% surcharge to credit transactions only, handles the 30-day processor notice, and configures your terminal's signage and receipt disclosures automatically — debit transactions always process at cost.

Related guides

• Credit Card Surcharge Laws & Compliance Rules — the full national rulebook.
• How to Add a Credit Card Surcharge Legally — the six-step setup checklist.
• Surcharging vs. Dual Pricing vs. Flat Rate — which pricing model fits your business.