MS 2025-08-D-Edney-August-4-2025-Processing-Fees-for-Electronic-Payment-Systems-Associated- August 4, 2025

Can a Mississippi state agency add a third-party processing fee on top of regulatory fees when users pay online, or does that count as raising the fee without statutory authority?

Short answer: Yes. Section 27-104-33 expressly allows a Mississippi state agency to assess users a processing fee, paid directly to a third-party vendor, on top of statutory regulatory fees. The user pays the full cost of using the electronic payment. This is not an increase in the regulatory fee itself.

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

About this page: The plain-English summary, reader guidance, and Q&A below were written by Ezel based on the official AG opinion. The original opinion (linked at the bottom of this page, or PDF in the sidebar) is the authoritative source for any reliance.

View original AG opinion (PDF)

Plain-English summary

Dr. Daniel Edney, Mississippi State Health Officer, asked whether the Mississippi State Department of Health (MSDH) could move to electronic payments for regulatory fees and pass the third-party platform's processing fee through to the user, or whether that would count as raising the regulatory fee without statutory authority.

The AG said yes, this is allowed, and no, it is not an unauthorized increase. Section 27-104-33 controls. The statute directs the Department of Finance and Administration (DFA) to set policies allowing state agencies to accept payment by credit cards, debit cards, charge cards, and other forms of electronic payment. The relevant clause:

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.

The default is pass-through. The user pays the platform's processing fee on top of the regulatory fee. The regulatory fee itself is unchanged.

The statute also allows agencies, with DFA approval, to absorb the processing fees themselves "if the agency can demonstrate to the department's satisfaction that they are able to assume these costs and provide the related service for the same or lesser cost." For retail merchandise sold by state agencies, an agency may bear the full cost of processing without DFA's express approval.

So MSDH can move to electronic payments and pass the processing fee to the user. As a procedural matter, MSDH should follow DFA's policies under 12 Miss. Admin. Code Pt. 4, R. 2.1, which implement Section 27-104-33.

The opinion noted Section 41-3-65 in a footnote: from July 1, 2016 through June 30, 2020, MSDH had limited authority to increase certain fees by no more than 15% no more than two times. That window has closed and was about regulatory fee increases, not about electronic payment processing fees.

What this means for you

For state agency CFOs and finance officers moving to electronic payments

Section 27-104-33 is the authority. Pass-through to the user is the default. Get DFA's policies (12 Miss. Admin. Code Pt. 4, R. 2.1) and follow them when contracting with payment platforms. The user-pays model means the agency does not bear the platform cost, which keeps the regulatory fee structure clean.

If you want the agency to absorb the processing fees instead (for example, to avoid friction for low-income filers), get DFA approval first. The statute requires a demonstration "to the department's satisfaction" that the agency can assume the cost and provide the service at the same or lesser total cost.

For retail merchandise sales, agencies have more flexibility to absorb processing fees without DFA approval.

For state agency attorneys

This opinion is a clean statement of authority. When clients ask whether they can pass online processing fees through, the answer is yes under Section 27-104-33, with DFA-policy compliance. The pass-through is not an unauthorized fee increase because the regulatory fee itself does not change; the user is paying the third-party processor for the convenience of paying electronically.

For DFA

The opinion confirms the statutory framework you operate under. Continue maintaining policies under 12 Miss. Admin. Code Pt. 4, R. 2.1. Update if needed for changes in payment technology and security.

For users paying state regulatory fees online

You may see a processing fee added on top of the regulatory fee at checkout. That fee goes to the third-party payment processor, not to the agency. The agency is not collecting more in regulatory revenue. If you do not want the processing fee, paying by check or money order (where allowed) is the alternative.

For state legislators

The current framework gives agencies the option to absorb processing fees with DFA approval. If the policy goal is to reduce friction for filers (especially for licenses where annual renewal is mandatory), consider whether an automatic absorption rule, or a fee-cap, would be appropriate. Section 27-104-33 gives flexibility but defaults to pass-through.

Common questions

Can an agency move to electronic payments and require users to pay a processing fee?
Yes. Section 27-104-33 expressly authorizes pass-through.

Is the processing fee an increase in the regulatory fee?
No. The regulatory fee (set by statute) is unchanged. The processing fee is a separate charge from a third-party vendor for the convenience of electronic payment.

Can an agency absorb the processing fee instead?
Yes, with DFA approval. The agency must demonstrate it can assume the cost and provide the service at the same or lesser total cost. For retail merchandise, agencies have more latitude without DFA approval.

Does the user have to pay the processing fee?
If they choose electronic payment, yes. Other payment methods (check, money order, in-person cash) may not have the processing fee, depending on the agency's available options.

Where do I find DFA's policies on electronic payments?
12 Miss. Admin. Code Pt. 4, R. 2.1.

Does this opinion apply to municipal or county fees?
No. The opinion is about state agencies under Section 27-104-33. Local government electronic payment authority sits in different statutes; check Sections 17-25-7 and related local-finance provisions.

Background and statutory framework

Section 27-104-33:

The State Department of Finance and Administration shall establish policies that allow the payment of various fees and other accounts receivable to state agencies, and the payment for retail merchandise sold by state agencies, by credit cards, charge cards, debit cards and other forms of electronic payment in the discretion of the department. 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.

Agencies, with the approval of the Department of Finance and Administration, may bear the full cost of processing such electronic payments if the agency can demonstrate to the department's satisfaction that they are able to assume these costs and provide the related service for the same or lesser cost. However, state agencies may bear the full cost of processing such electronic payments for retail merchandise sold by state agencies.

12 Miss. Admin. Code Pt. 4, R. 2.1 implements Section 27-104-33.

Section 41-3-65 (footnoted in the opinion) gave MSDH limited authority to increase regulatory fees by no more than 15%, no more than twice, between July 1, 2016 and June 30, 2020. That window has closed. The statute is about regulatory fee increases, not about electronic payment processing fees, so it is not the controlling text here.

Citations

Miss. Code Ann. § 27-104-33 (electronic payment authority; user pays processing fee)
Miss. Code Ann. § 41-3-65 (MSDH regulatory fee increase authority, July 2016 to June 2020)
12 Miss. Admin. Code Pt. 4, R. 2.1 (DFA implementing rule)

Source

Original opinion text

August 4, 2025
Dr. Daniel P. Edney, State Health Officer
Mississippi State Department of Health
Post Office Box 1700
Jackson, Mississippi 39215-1700
Re:

Processing Fees for Electronic Payment Systems Associated with
Regulatory Programs

Dear Dr. Edney:
The Office of the Attorney General has received your request for an official opinion.
Background
According to your request, the Mississippi State Department of Health ("MSDH") is looking to
move to electronic payment systems to eliminate the process of submitting paper checks to pay for
fees associated with regulatory programs. The fees paid to MSDH associated with regulatory
programs are set by statute. Most third-party vendors charge users a separate processing fee to
submit their payments. The processing fee goes directly to the third-party vendor. Because the
processing fee would cover the cost of the platform, the online payment platform would be offered
at no cost to MSDH.
Question Presented
May MSDH assess users a processing fee, which would go directly to a third-party vendor, to
cover the cost of an online payment platform for regulatory fees, or would this be seen as increasing
regulatory fees without statutory authority?
Brief Response
Mississippi Code Annotated Section 27-104-33 allows MSDH to utilize an electronic payment
system with third-party vendor fees assessed to the user so long as the system complies with the
Mississippi Department of Finance and Administration's ("DFA") policies regarding the same.
Section 27-104-33 specifically provides, "[a]ny 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." Accordingly, assessing a processing fee, which would go directly to a third-party
vendor, to cover the cost of an electronic payment platform does not constitute an increase in
regulatory fees without statutory authority.
Applicable Law and Discussion
You ask if MSDH may assess users a processing fee, which would go directly to a third-party
vendor, to cover the cost of an electronic payment platform for regulatory fees, or if that would
constitute an increase in regulatory fees without statutory authority.[1] Section 27-104-33 charges
DFA with establishing policies to allow the electronic payment of fees to state agencies:

The State Department of Finance and Administration shall establish policies that
allow the payment of various fees and other accounts receivable to state agencies,
and the payment for retail merchandise sold by state agencies, by credit cards,
charge cards, debit cards and other forms of electronic payment in the discretion of
the department. 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.

Agencies, with the approval of the Department of Finance and Administration, may
bear the full cost of processing such electronic payments if the agency can
demonstrate to the department's satisfaction that they are able to assume these costs
and provide the related service for the same or lesser cost. However, state agencies
may bear the full cost of processing such electronic payments for retail merchandise
sold by state agencies.

As shown, absent express approval from DFA otherwise, Section 27-104-33 orders "[a]ny 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." (emphasis added).[2] It is the opinion of this
office that Section 27-104-33 allows MSDH to utilize an electronic payment system with third-party vendor fees assessed to the user so long as the electronic payment system complies with
these DFA policies.[3] Such use would not be seen as increasing regulatory fees without statutory
authority.

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/ Maggie Kate Bobo
Maggie Kate Bobo
Special Assistant Attorney General

[1] Pursuant to Section 41-3-65,

Except as otherwise provided by law, the State Board of Health or the State Department of Health
may increase the amount of any fee charged by the board or the department for providing a service,
including the issuance and renewal of licenses and registrations, not more than two (2) times during
the period from July 1, 2016, through June 30, 2020, with the percentage of each increase being not
more than fifteen percent (15%) of the amount of the fee in effect at the time of the increase.

[2] See also 12 Miss. Admin. Code Pt. 4, R. 2.1 (establishing DFA policies in accordance with Section 27-104-33).

[3] We advise conferring with DFA regarding any additional requirements and restrictions pertaining to such electronic
payment system.