§4475 Imposition of tax

Summary

A 1 percent tax must be charged on each remittance transfer. The sender pays the tax. The remittance transfer provider must collect it from the sender and send the money to the Secretary every quarter in the way the Secretary requires. If the tax is not paid or collected when the transfer is made, the provider must pay it. The tax applies only when the sender gives cash, a money order, a cashier’s check, or a similar physical payment to the provider. The tax does not apply if the funds are taken from an account at certain regulated financial institutions (see 31 U.S.C. 5312(a)(2)(A)–(H) and subchapter II of chapter 53) or if the transfer is paid with a U.S.-issued debit or credit card. The terms "remittance transfer," "remittance transfer provider," and "sender" use the meanings in section 919(g) of the Electronic Fund Transfer Act (15 U.S.C. 1693o–1(g)). "Credit card" and "debit card" use the meanings in section 920(c)(3) and 920(c)(2) of that Act (15 U.S.C. 1693o–2), with the debit card meaning applied without subparagraph (B). For section 7701(l), remittance transfers in multi-party arrangements are treated as financing transactions.