Credit card surcharging is legal in 48 of 50 US states as of 2026. Connecticut and Massachusetts prohibit credit card surcharges entirely. Colorado permits surcharging but caps the rate at 2%. The other 47 states and the District of Columbia allow surcharges of up to 3% (or up to 4% under Mastercard's rules), provided the business follows federal rules and card network requirements. This guide breaks down the rules state by state, explains the federal requirements every business must follow regardless of location, and clarifies what business owners can and cannot do when adding a credit card processing fee at checkout.
Yes, credit card surcharging is legal in 48 of 50 US states in 2026. The two states that prohibit surcharging entirely are Connecticut and Massachusetts. Colorado allows surcharging but limits the surcharge to 2% of the transaction. Every other state, plus the District of Columbia, permits surcharging up to the card network maximum of 3% (or 4% for Mastercard transactions specifically).
Surcharging legality in the United States is governed by three overlapping layers of rules:
A business must comply with the strictest applicable rule. In most states, that is the card network cap of 3%. In Colorado, it is the state cap of 2%. In Connecticut and Massachusetts, surcharging is not permitted at all.
Two states prohibit credit card surcharging in 2026: Connecticut and Massachusetts. Businesses in these two states cannot legally add a surcharge to credit card transactions, regardless of card network rules. The alternative for businesses in these states is a cash discount program, which is legal in all 50 states.
A handful of other states (Florida, Oklahoma, Kansas, and Maine) have surcharging bans on the books, but federal courts have ruled these bans unconstitutional under the First Amendment. Businesses in those states can surcharge in practice, though the legal status remains in flux. Many surcharging providers, including Nadapayments, take a conservative approach in those states and recommend a cash discount program instead until the law is fully settled.
Federal rules and card network requirements apply uniformly across all states where surcharging is legal. These rules exist to protect customers and to prevent businesses from using surcharges to profit beyond their actual processing cost.
The five universal rules are:
A compliant surcharging provider handles the card network notifications, supplies the required signage, and configures the terminals and software to format receipts correctly.
Colorado allows credit card surcharging but caps the maximum surcharge at 2%, lower than the 3% allowed in most other states. Colorado House Bill 21-1316 imposed the 2% cap effective July 1, 2022, and the cap remains in effect in 2026.
For a Colorado business processing $50,000 a month in credit card sales, the 2% cap means the surcharge offsets less of the processing cost than a 3% surcharge would in another state. The business may still need to absorb a small residual cost on credit transactions. For most Colorado businesses, the program still substantially reduces processing fees compared to traditional flat-rate processing.
Surcharging is legal at up to 3% in most states, capped at 2% in Colorado, and prohibited in Connecticut and Massachusetts. The table below summarizes the status in every US state and the District of Columbia.
| State | Surcharging status | Maximum surcharge | Notes |
|---|---|---|---|
| Alabama | Permitted | 3% | Standard card network rules apply. |
| Alaska | Permitted | 3% | Standard card network rules apply. |
| Arizona | Permitted | 3% | Standard card network rules apply. |
| Arkansas | Permitted | 3% | Standard card network rules apply. |
| California | Permitted | 3% | SB 478 (2024) requires the surcharge to be disclosed in the listed price for some categories. Most retail surcharging at the point of sale remains compliant. |
| Colorado | Permitted with cap | 2% | HB 21-1316 caps the surcharge at 2%, lower than the federal cap. |
| Connecticut | Prohibited | None permitted | Surcharging is not legal. Cash discount programs are the alternative. |
| Delaware | Permitted | 3% | Standard card network rules apply. |
| District of Columbia | Permitted | 3% | Standard card network rules apply. |
| Florida | Permitted | 3% | State ban was ruled unconstitutional by federal courts. Surcharging is permitted in practice. |
| Georgia | Permitted | 3% | Standard card network rules apply. |
| Hawaii | Permitted | 3% | Standard card network rules apply. |
| Idaho | Permitted | 3% | Standard card network rules apply. |
| Illinois | Permitted | 3% | Standard card network rules apply. |
| Indiana | Permitted | 3% | Standard card network rules apply. |
| Iowa | Permitted | 3% | Standard card network rules apply. |
| Kansas | Permitted | 3% | Historical state ban was ruled unconstitutional. Surcharging is permitted in practice. |
| Kentucky | Permitted | 3% | Standard card network rules apply. |
| Louisiana | Permitted | 3% | Standard card network rules apply. |
| Maine | Permitted | 3% | Historical state ban was ruled unconstitutional. Some providers take a conservative approach here. |
| Maryland | Permitted | 3% | Standard card network rules apply. |
| Massachusetts | Prohibited | None permitted | Surcharging is not legal. Cash discount programs are the alternative. |
| Michigan | Permitted | 3% | Standard card network rules apply. |
| Minnesota | Permitted | 3% | Standard card network rules apply with additional disclosure requirements. |
| Mississippi | Permitted | 3% | Standard card network rules apply. |
| Missouri | Permitted | 3% | Standard card network rules apply. |
| Montana | Permitted | 3% | Standard card network rules apply. |
| Nebraska | Permitted | 3% | Standard card network rules apply. |
| Nevada | Permitted | 3% | Standard card network rules apply. |
| New Hampshire | Permitted | 3% | Standard card network rules apply. |
| New Jersey | Permitted | 3% | Standard card network rules apply with additional disclosure requirements. |
| New Mexico | Permitted | 3% | Standard card network rules apply. |
| New York | Permitted | 3% | Specific disclosure rules: the total credit card price must be displayed, not just the surcharge percentage. |
| North Carolina | Permitted | 3% | Standard card network rules apply. |
| North Dakota | Permitted | 3% | Standard card network rules apply. |
| Ohio | Permitted | 3% | Standard card network rules apply. |
| Oklahoma | Permitted | 3% | Historical state ban was ruled unconstitutional. Surcharging is permitted in practice. |
| Oregon | Permitted | 3% | Standard card network rules apply. |
| Pennsylvania | Permitted | 3% | Standard card network rules apply. |
| Rhode Island | Permitted | 3% | Standard card network rules apply. |
| South Carolina | Permitted | 3% | Standard card network rules apply. |
| South Dakota | Permitted | 3% | Standard card network rules apply. |
| Tennessee | Permitted | 3% | Standard card network rules apply. |
| Texas | Permitted | 3% | Historical restrictions have been struck down. Standard card network rules apply. |
| Utah | Permitted | 3% | Standard card network rules apply. |
| Vermont | Permitted | 3% | Standard card network rules apply. |
| Virginia | Permitted | 3% | Standard card network rules apply with additional disclosure requirements. |
| Washington | Permitted | 3% | Standard card network rules apply. |
| West Virginia | Permitted | 3% | Standard card network rules apply. |
| Wisconsin | Permitted | 3% | Standard card network rules apply. |
| Wyoming | Permitted | 3% | Standard card network rules apply. |
Five states have had surcharging restrictions ruled unconstitutional or unenforceable by federal courts: Florida, Kansas, Maine, Oklahoma, and Texas. In each case, the courts ruled that statutory bans on surcharging violated First Amendment protections on commercial speech. Businesses in these states can surcharge in practice, though some surcharging providers take a conservative approach until the laws are formally repealed.
The key cases include the 2017 US Supreme Court decision in Expressions Hair Design v. Schneiderman, which addressed New York's surcharging law, and a series of district court rulings in 2018 to 2024 that struck down similar bans in Florida, Texas, Kansas, and other states. The practical effect is that surcharging is permitted nationwide except in Connecticut and Massachusetts, with Colorado's 2% cap as the only enforced rate restriction.
Surcharging laws differ from cash discount laws in three ways: state legality, fee structure, and disclosure requirements. Cash discount programs are legal in all 50 states, while surcharging is prohibited in Connecticut and Massachusetts. Cash discounts have no national percentage cap, while surcharges are capped at 3% (or 2% in Colorado). Cash discount programs do not require card network notification, while surcharging programs do.
| Rule | Surcharging | Cash discount |
|---|---|---|
| State legality | Legal in 48 of 50 states (not CT, MA) | Legal in all 50 states |
| Maximum offset | 3% (2% in Colorado) | No statutory cap; bounded by processing cost |
| Card network notification | Required, 30 days in advance | Not required |
| Applies to debit cards | No (federal prohibition) | Yes (cash discount applies to all card payments) |
| Customer-facing display | One price; surcharge added at checkout | Two prices (cash vs non-cash) |
For most businesses outside Connecticut and Massachusetts, surcharging is the cleaner option because debit card customers pay the listed price unchanged, which reduces friction. For businesses in CT or MA, a cash discount program achieves a similar financial outcome.
Disclosure requirements are largely set by card network rules and apply uniformly nationwide, though four states (California, New York, Minnesota, New Jersey, and Virginia) have additional disclosure requirements beyond the card network minimum. The card network requirements apply in every state where surcharging is legal.
Universal card network requirements (every state where surcharging is legal):
Additional state-specific requirements:
A compliant surcharging provider supplies signage and configures receipts to meet the strictest applicable requirement, so business owners do not need to interpret the rules manually.
Nadapayments handles multi-state surcharging compliance by registering the business with all four card networks at once, by supplying state-appropriate signage automatically, and by configuring terminals to apply the correct rate (3% in most states, 2% in Colorado, 0% in Connecticut and Massachusetts). Businesses operating in multiple states can run a single program that complies with each state's specific rules without manual configuration.
For a business with locations in Texas, Colorado, and Connecticut, the system would surcharge at 3% in Texas, 2% in Colorado, and not at all in Connecticut, all from the same account. The point-of-sale signage shipped to each location is matched to that state's specific disclosure requirements. Customers see consistent receipts that reflect the rate applicable at the location where the transaction occurred.
For businesses in states where surcharging is permitted but the law is in flux (Florida, Kansas, Maine, Oklahoma), Nadapayments offers either a surcharge program or a cash discount program, depending on the business's preferred legal posture. The cash discount program achieves a similar financial outcome without relying on court rulings against state bans.
Yes, surcharging is legal in California in 2026. California Senate Bill 478, which took effect in July 2024, requires that mandatory fees be disclosed in the listed price for some product categories. Surcharging that is clearly disclosed at the point of sale and avoidable (because the customer can choose to use a debit card) generally remains compliant. The maximum surcharge in California is 3%.
Yes, surcharging is legal in New York in 2026. New York requires that the surcharged total price be displayed to the customer (for example, the credit card price for a $100 item must be shown as $103, not just as a 3% surcharge). The maximum surcharge in New York is 3%, consistent with card network rules.
Yes, surcharging is legal in Texas in 2026. Historical Texas restrictions on surcharging were struck down by federal courts. Texas businesses can surcharge up to 3% on credit card transactions, following standard card network rules including 30-day notification and point-of-sale disclosure.
Colorado House Bill 21-1316, which took effect July 1, 2022, caps credit card surcharges at 2% of the transaction. The cap is lower than the 3% federal and card network maximum that applies in other states. The cap remains in effect in 2026. Colorado businesses absorb a small residual cost on credit transactions because the 2% surcharge does not fully offset the typical 2.5% to 3% interchange fee, but the program still substantially reduces processing costs compared to traditional flat-rate processing.
Yes. Cash discount programs are legal in all 50 states, including Connecticut and Massachusetts. A cash discount program advertises one (higher) price for non-cash payments and offers a discount when the customer pays with cash, achieving a similar financial outcome to surcharging. Most surcharging providers, including Nadapayments, offer a cash discount option for businesses in states where surcharging is not permitted.
A business that surcharges in Connecticut or Massachusetts may face state-level enforcement action, customer complaints to the state attorney general, and card network penalties (including loss of merchant account privileges). A compliant surcharging provider geo-restricts the program automatically so the surcharge cannot be applied in prohibited states.
Yes. The 30-day card network notification requirement applies to every business surcharging credit card transactions, regardless of size or volume. The notification is filed with Visa, Mastercard, Discover, and American Express. A compliant surcharging provider files the notifications on the business's behalf.
No. Federal rules and card network rules require that the surcharge cannot exceed the merchant's actual cost of acceptance, capped at 3% (or 4% under Mastercard's specific rules, or 2% in Colorado). For a business whose effective credit card processing rate is 2.7%, the maximum legal surcharge is 2.7%, not 3%. Most surcharging providers default to either the cost of acceptance or the state cap, whichever is lower.
State surcharging laws change periodically as courts rule on First Amendment challenges and as state legislatures pass new disclosure requirements. Major changes in the past five years include Colorado's 2% cap (2022), California's SB 478 disclosure rule (2024), and federal court rulings that struck down bans in Florida, Texas, Kansas, and Oklahoma. A compliant surcharging provider tracks state law changes and updates terminal configurations and signage automatically when rules change.
