AGO 85-19.

• Case Date: December 12, 1985
• Court: Colorado

Colorado Attorney General Opinions 1985. AGO 85-19. December 12, 1985Department of Law Attorney General Opinion FORMAL OPINION of DUANE WOODARD Attorney General Opinion No. 85-19 AG Alpha No. AD CS AGAOX Jack E. Keene, Director Division of Central Services Department of Administration 1600 Sherman Street, Suite 1050 Denver, Colorado 80203 RE: Request for attorney general's opinion regarding usage of VISA and Mastercard as a primary means of purchase and as a guarantor on personal checks received in payment for publications sold by Central StoresDear Mr. Keene: I am writing in response to your letter of November 8, 1985 to Duane Woodard in which you requested a legal opinion on the state's legal authority to accept Mastercard or Visa in payment of state goods. More specifically, your letter raises the following three questions: QUESTIONS PRESENTED AND CONCLUSIONS Is there any statute or rule which prohibits the acceptance of Mastercard or Visa in payment of publications sold by Central Store? Is there any statute of rule which limits the amount of consideration to be paid by Central Services to these credit card companies for their services? Are there any taxes or tax collecting responsibilities attendant to the use of these credit cards? There are no constitutional provisions, statutes, or rules which prohibit Central Store from accepting Mastercard or Visa in payment of publications which it sells. Moreover, while the procurement code generally requires Central Store to obtain the lowest price for services it purchases, there are no specific limits on the consideration it can pay for those services. Finally, Central Store is responsible for collecting state sales taxes which result from sale of publications to the public; but it incurs no tax liabilities for purchasing the services of a credit card company. ANALYSIS The mechanics of the credit card system. By way of introduction, a representative of the Rocky Mountain Bankcard System gave the following outline of the mechanics of the credit card system: If the division decides to accept Mastercard or Visa in payment of state goods, an account must first be set up with a bank. Then the division, on a daily basis, would submit the invoices it collects to this account. Depending on the bank, the division's account is credited in the amount of the invoices either...