The last penny in America rolled off a coin press in Philadelphia on November 12, 2025. If you run a cash-taking business — a food truck, a coffee shop, a laundromat, a farmers market booth — you've probably already felt it: a customer hands you a five-dollar bill for a $4.83 order, and you're short two pennies to make change. Multiply that by every cash transaction, every day, and you have a real operational problem that nobody in Washington solved before pulling the penny out of circulation.
Into that vacuum, states have rushed in — and not with one answer. With 19 states enacting cash-rounding laws in 2026 and no uniform federal rule yet on the books, small business owners who take cash are stuck reading their own state's fine print to figure out how to legally give change.
Why This Happened So Fast
The U.S. Mint has been losing money on the penny for years — each one costs about 3.7 cents to produce and distribute, more than three times its face value. In February 2026, the Trump administration directed the Treasury to stop minting new pennies, and by November the presses had gone quiet for good. Existing pennies remain legal tender, so nobody's forcing you to refuse them, but the supply is shrinking every day as banks run out and don't get replenished.
That created an immediate practical gap: exact change requires pennies, and pennies are disappearing. Congress has a bipartisan fix on the table — the Common Cents Act, sponsored by Reps. Lisa McClain (R-Mich.) and Robert Garcia (D-Calif.) — which would formally end penny production and set a national rounding standard: round transactions ending in 1, 2, 6, or 7 cents down; round those ending in 3, 4, 8, or 9 cents up; leave totals ending in 0 or 5 cents alone. It passed the House by voice vote on July 14, 2026. It has not passed the Senate, and it is not law. Until it is, states are writing their own rules, and the rules don't match.
The Patchwork You're Actually Operating Under
As of mid-2026, Alabama, Arizona, Connecticut, Florida, Georgia, Hawaii, Idaho, Indiana, Kentucky, Maryland, Minnesota, Nebraska, New Mexico, Oklahoma, Oregon, Tennessee, Vermont, Virginia, and Washington have all enacted some form of cash-rounding legislation, with several more states actively debating bills. If you sell in more than one state — online sellers with a physical pop-up presence, franchise owners, contractors who cross state lines — you may be legally required to round differently depending on which side of a border the sale happens on.
A few patterns worth knowing:
Most states leave the direction up to you. Connecticut, Florida, Maryland, and the majority of the other 2026 laws simply authorize retailers to round cash totals to the nearest nickel, in either direction, as long as you're consistent and transparent about it.
Arizona does it differently. Arizona's law mandates the "Canadian model" already used north of the border: totals ending in .01, .02, .06, or .07 round down; totals ending in .03, .04, .08, or .09 round up. It's the only state that removes retailer discretion entirely — you follow the formula, full stop.
Indiana splits the rules by purpose. Retail transactions use Canadian-style rounding, but when it comes to remitting state and local tax, Indiana requires rounding down to the nearest nickel every time — and specifies that any gain from rounding must be added to the retailer's income, while any loss must be subtracted from it. That's not a minor detail; it means Indiana treats rounding as an accounting event, not just a cashier's habit.
Some states only regulate their own transactions. Minnesota and Oklahoma's rounding rules apply to payments made to state agencies, not to private retail sales. New Mexico's law covers state taxes and vehicle-related fees specifically. If you're in one of these states, your day-to-day retail rounding practice may not be governed by state law at all yet — which is its own kind of uncertainty.
Because there's no federal standard behind any of this, a rounding practice that's perfectly legal in Georgia could be non-compliant in Arizona. The National Conference of State Legislatures has told lawmakers to expect retailers will need six to nine months just to update cash-handling and reporting systems to keep up — and that clock started running before most of these laws even took effect.
What This Means at the Register — and in Your Books
Two things need to stay separate in your head, and in your accounting: the price of the sale and the cash collected for it.
Every state that has weighed in agrees on one point: sales tax is calculated on the actual, pre-rounding sale price. Rounding only touches the final amount of cash that changes hands — not the taxable transaction itself, and not what you owe the state in tax. A $4.83 sale with $0.34 in tax is still a $4.83 sale with $0.34 in tax for reporting purposes, even if you hand the customer $5.15 in change instead of $5.17 because you rounded the total up to $4.85 at checkout.
That distinction matters because it creates a small but real gap between what you charged and what you collected — and that gap needs a home in your books, just like the classic "cash over and short" discrepancies retailers have tracked for decades. If you round up on a $19.82 sale to $19.85, you've collected three cents more than the transaction was worth; round a $19.83 sale down to $19.80 and you've collected three cents less. Multiplied across hundreds of cash transactions a week, those three-cent gaps add up to real dollars that need to be recorded, not just absorbed into "miscellaneous."
Indiana's law makes this explicit by requiring rounding gains to be added to income and rounding losses to be subtracted — which is a good model to follow even in states that don't spell it out. In practice, that means:
- Setting up a dedicated rounding variance account (separate from cash-over-short, if you already track that) so cashier drawer counts and rounding math don't get tangled together
- Recording the pre-rounding sale amount and tax as the "true" transaction, with the rounding delta booked separately
- Reconciling that variance account monthly so it doesn't quietly drift and mask a bigger cash-handling problem
- Keeping the rounding rule itself documented and applied consistently — auditors and state tax examiners will want to see that you rounded the same way every time, not opportunistically
If your point-of-sale system doesn't cleanly separate cash and card transactions, or can't distinguish the taxable sale from a rounding adjustment, now is the time to check with your vendor. Since rounding only applies to cash (credit, debit, and digital payments still settle to the exact cent), a system that can't tell the two apart will either overcharge card customers or under-round cash ones — both of which create compliance headaches down the line.
What Small Business Owners Should Do Now
- Check your specific state's law, not a national summary — the differences between "retailer discretion" states and mandate states like Arizona are not cosmetic.
- Pick one rounding method and stick to it. Consistency is what regulators and auditors are actually checking for.
- Post a sign disclosing your rounding policy at the register. Several state laws either require or strongly recommend this, and it heads off customer complaints before they start.
- Confirm your POS handles cash and card differently. Rounding should never touch a card transaction.
- Talk to your tax advisor or bookkeeper about how rounding gains and losses should be tracked in your specific state, especially if you operate in more than one.
- Watch the Senate. If the Common Cents Act clears Congress and gets signed, it would set one national rounding rule and likely preempt at least some of this state-by-state variation — but until then, plan around the law where you actually operate.
Keep Your Rounding — and Everything Else — Auditable
Penny-level rounding differences are a small example of a bigger truth: the more granular your bookkeeping, the easier it is to catch discrepancies before they become real problems. Beancount.io gives you plain-text accounting where every rounding adjustment, cash variance, or tax reconciliation is a transparent, version-controlled entry you can trace back to the day it happened — no black-box software hiding how a three-cent gap turned into a hundred-dollar one. If you're already rethinking how your business tracks cash in 2026, get started for free and see why plain-text accounting appeals to owners who want to actually see their numbers, not just trust them. Check out the docs to see how easy it is to set up a rounding variance account, or explore Fava for a visual dashboard over the same ledger.