When a Mississippi county civic center sells food, can the county absorb the credit card processing fees, or must the customer pay them?

Plain-English summary

The Lincoln County Board of Supervisors operated the Lincoln Civic Center. The civic center wanted to sell food (concessions for immediate consumption) and accept credit card payments. The board attorney asked the AG who pays the credit card processing fee: the customer (added on top of the food price), or the county (absorbed as a cost of doing business)?

The AG's answer was customer pays. Mississippi Code § 17-25-1 lets counties accept credit cards for various payments and generally requires the user to pay processing fees as an additional charge. There is one carve-out: counties can choose to bear the processing fee themselves "for retail merchandise sold by the county." But the AG ruled that food for immediate consumption is not "retail merchandise" within the meaning of the statute. So the carve-out did not apply, and the customer had to pay the processing fee.

The opinion drew the line based on a definition of "merchandise" that excluded "provisions such as are purchased day by day for immediate consumption (e.g. food)," echoing language from Black's Law Dictionary and confirmed in a 2016 prior opinion.

Currency note

This opinion was issued in 2020. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion said for each audience, at the time

For Mississippi county civic center and concessions operators

The 2020 rule was straightforward. A county-operated civic center that accepted credit cards for food sales had to assess the processing fee to the customer as an additional charge, not bear it out of the civic center's funds.

For "retail merchandise" the statute was different: § 17-25-1 let a county bear the full cost of processing for retail merchandise it sold. So if a civic center sold both food and retail merchandise, the food fell under the customer-pays rule while the merchandise fell within the county's discretion to absorb the fee.

For county boards of supervisors structuring credit card programs

Section 17-25-1 required adoption of policies established by the State Auditor. The Auditor's office maintained credit card and electronic payment policies, including how to label and itemize processing fees on receipts. Boards adopting credit card acceptance had to comply with those Auditor-approved policies.

For citizens paying for food at county-owned venues

Customers got hit with a small additional charge if they used a credit card. The receipt should have shown the food price and the processing fee separately. Cash payments avoided the extra charge entirely.

For county attorneys

The opinion turned on the fact that the Lincoln Civic Center was "wholly owned" and operated by the county, which put the food sales squarely within § 17-25-1. The holding was specific to a county selling food for immediate consumption through a county-owned facility.

Common questions

Q: Why did the AG say food was not "retail merchandise"?
A: The AG quoted Black's Law Dictionary, which defined "merchandise" as the goods that merchants buy and sell, but expressly excluded "provisions such as are purchased day by day for immediate consumption (e.g. food)." That exclusion drove the answer: food for immediate consumption is treated separately from durable goods.

Q: What is "retail merchandise" in this context?
A: Things like t-shirts, mugs, branded merchandise, books, DVDs, parts, hardware. Tangible items that you take home and use over time. The Mississippi statute lets a county bear the processing fee for those, but not for food eaten on-site.

Q: Could the county absorb the fee anyway?
A: Per the opinion, no. Section 17-25-1 said fees "shall be assessed to the user of the electronic payment as an additional charge for processing the electronic payment, so that the user will pay the full cost of using the electronic payment." The retail merchandise carve-out was the only authorized exception, and food was not retail merchandise.

Q: What if a county sold packaged food for later consumption (e.g., bagged candy or bottled drinks to go)?
A: The opinion focused on "food for immediate consumption" at a civic center. Packaged food intended to be taken home might fall closer to retail merchandise, but the opinion did not address that distinction directly. Counties facing the question should have sought further AG or State Auditor guidance.

Q: How did this rule apply to other things county civic centers sold, like ticket sales?
A: Tickets, fees, and accounts receivable also fell under § 17-25-1. The default rule was the user pays the processing fee. The retail merchandise carve-out was specific and narrow.

Q: What was the role of the State Auditor here?
A: Section 17-25-1 says credit card acceptance must comply with policies established by the State Auditor. Counties had to consult Auditor guidance on how to administer credit card programs, document fees, and post-process payments to government accounts.

Background and statutory framework

Mississippi Code § 17-25-1 enables counties and municipalities to accept credit cards, charge cards, and electronic payments for taxes, fees, accounts receivable, and "retail merchandise sold by the county or municipality." The statute sets a default rule: any fees associated with the electronic payment are assessed to the user as an additional charge "so that the user will pay the full cost of using the electronic payment." It then provides one exception, allowing a county or municipality to bear the full processing cost "for retail merchandise sold by the county or municipality."

The AG's 2020 opinion drew on a 2016 opinion (Uselton, Nov. 7, 2016) that had analyzed the same statute. Both opinions relied on the Black's Law Dictionary definition of "merchandise," which is "rarely applied to provisions such as are purchased day by day for immediate consumption (e.g. food)," to conclude that food for immediate consumption is not retail merchandise for purposes of § 17-25-1.

The statute also caps the additional charge: counties cannot "charge the user any additional amount above the processing fee on each transaction." So the county cannot use credit card acceptance as a profit center; it can only recover the actual processing cost.

Citations and references

Statutes:

• Miss. Code Ann. § 17-25-1, county and municipal acceptance of credit and electronic payments, processing fee passed to user, retail merchandise carve-out

Prior AG opinions cited:

• MS AG Op., Uselton (Nov. 7, 2016), food for immediate consumption is not "retail merchandise" under § 17-25-1

Source

• Landing page: https://attorneygenerallynnfitch.com/divisions/opinions-and-policy/recent-opinions/
• Original PDF: https://attorneygenerallynnfitch.com/wp-content/uploads/2020/12/R.Allen_December-8-2020-Payments-for-food-items-sold-by-county-owned-civic-center-by-credit-card.pdf

Original opinion text

December 8, 2020

Robert O. Allen, Esq.
Board Attorney, Lincoln County Board of Supervisors
Post Office Box 751
Brookhaven, Mississippi 39602

Re: Payments for food items sold by county owned civic center by credit card

Dear Mr. Allen:

The Office of the Attorney General has received your request for an official opinion.

Issue Presented

You state that the Lincoln Civic Center is owned by the Lincoln County Board of Supervisors and ask if, pursuant to Section 17-25-1 of the Mississippi Code, the County, through the Civic Center, has the authority to sell merchandise for immediate consumption (food), accept payment by credit card, and assess fees charged by the credit card companies to the customers, or whether it is exempt from having to do so.

Brief Response

The County, through the wholly owned Lincoln Civic Center, may sell food items and accept payment by credit card and, in doing so, must assess credit card processing fees to the customers in compliance with Section 17-25-1 and the policies established by the State Auditor. The sale of food for immediate consumption does not constitute the sale of retail merchandise that would allow the County to bear the full costs of such processing fees.

Applicable Law & Discussion

Mississippi Code Annotated Section 17-25-1 provides:

The board of supervisors of any county and the governing authorities of any municipality may allow the payment of various taxes, fees and other accounts receivable to the county or municipality, and the payment for retail merchandise sold by the county or municipality, by credit cards, charge cards, debit cards and other forms of electronic payment, in accordance with policies established by the State Auditor. Except as otherwise provided in this section, any fees or charges associated with the use of such electronic payments shall be assessed to the user of the electronic payment as an additional charge for processing the electronic payment, so that the user will pay the full cost of using the electronic payment. However, a county or municipality shall not charge the user any additional amount above the processing fee on each transaction. For purposes of this section, the term "accounts receivable" includes, but is not limited to, judgments, fines, costs and penalties imposed upon conviction for criminal and traffic offenses. A county or municipality may bear the full cost of processing such electronic payments for retail merchandise sold by the county or municipality.

We have previously analyzed Section 17-25-1 and opined that:

According to Black's Law Dictionary, Fifth Edition, the term "retail" is defined as "a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale). A sale to the ultimate consumer." "Merchandise" is defined as:

All goods which merchants usually buy and sell, whether at wholesale or retail; wares and commodities such as are ordinarily the objects of trade and commerce. But the term is generally not understood as including real estate, and is rarely applied to provisions such as are purchased day by day for immediate consumption (e.g. food).

MS AG Op., Uselton at *3 (Nov. 7, 2016). Accordingly, this office is of the opinion that the sale of food for immediate consumption, as outlined in your request, does not constitute "retail merchandise," as that term is used in Section 17-25-1.

If this office may be of any further assistance to you, please do not hesitate to contact us.

Sincerely,

LYNN FITCH, ATTORNEY GENERAL

By: /s/ Phil Carter
Phil Carter
Special Assistant Attorney General