Mastercard Owes South Carolina Income Tax on Transactions There

Mastercard International Inc. is on the hook for over $6 million in South Carolina corporate income taxes after a state judge ruled Monday that its income-producing activity is facilitating transactions between merchants and customers in the state.

“Mastercard’s contention that its purpose in a credit/debit card transaction is to connect Issuer and Acquirer Banks ignores the reality of a credit/debit card transaction,” Judge Milton G. Kimpson wrote for the South Carolina Administrative Law Court. “The overarching purpose of the Mastercard Network is to allow a Merchant and a Cardholder to complete a cashless sales transaction and not to simply convey ...