§4475 Imposition of Tax

Summary

A 1 percent tax applies to remittance transfers. The sender must pay the tax. The remittance transfer provider must collect it from the sender and send it to the Secretary every quarter in the way the Secretary requires. If the tax is not paid when the transfer is made and it is not collected, the provider must pay it. The tax only covers transfers where the sender gives cash, a money order, a cashier’s check, or a similar physical instrument to the provider. The tax does not apply if the money is withdrawn from an account at a financial institution described in 31 U.S.C. 5312(a)(2)(A)–(H) and subject to subchapter II of chapter 53 of title 31, or if the transfer is funded with a debit or credit card issued in the United States. The terms “remittance transfer,” “remittance transfer provider,” and “sender” follow section 919(g) of the Electronic Fund Transfer Act (15 U.S.C. 1693o–1(g)). “Credit card” and “debit card” follow section 920(c)(3) and 920(c)(2) of that Act (15 U.S.C. 1693o–2(c)(3) and (c)(2)), with the debit card meaning used without subparagraph (B). For section 7701(l), multi‑party remittance transfers are treated as financing transactions.