Cash rounding compliance: what it is and what it requires
When the United States stopped producing the one-cent coin, settling a cash transaction to the exact cent became conditional on coin availability. 20 states have since written rules for what happens instead. Those rules differ on who must round, what base carries tax, how mixed tender is treated, and what protection follows from compliance. This page defines the category and links to the primary-source record behind each part of it.
Maintained against the Centsless legislation tracker. Status changes as laws change.
A definition
Cash rounding compliance is the set of controls that make a rounded cash settlement lawful and provable in a given jurisdiction. It has four parts, and each is a separate failure point.
- Rule selection. Applying the rounding method the jurisdiction specifies, at the increment it specifies, on the date the statute takes effect rather than the date it was signed.
- Base and tax treatment. Computing tax on the base the state requires, and rounding the final total rather than any individual line item.
- Tender segregation. Restricting rounding to the cash portion of settlement, leaving card, debit, check, EBT, and electronic payments at the exact cent, including in mixed-tender transactions.
- Evidence. Retaining a per-transaction record of what was applied and why, because liability protection generally attaches to adherence to the method, and adherence is a claim that has to be demonstrable after the fact.
A fifth failure point sits outside the sale itself: the return. Enacted statutes specify how the sale is rounded and are mostly silent on refunds, which makes cash rounding and refunds a distinct obligation with its own asymmetry risks.
Who has to round, and who may
The most consequential distinction in the enacted record is between statutes that permit rounding and statutes that obligate it. Arizona, Georgia and Indiana obligate merchants to round. The remainder authorize rounding without requiring it, and a subset apply only to tax remittance or to payments made to government entities rather than to retail transactions generally.
The distinction matters operationally because a permissive statute leaves the decision with the merchant, while an obligating statute makes non-rounding the violation. Both create the same evidence requirement, for different reasons. Full state-by-state detail, cited to enacted text, is in the legislation tracker and the compliance analysis.
Verified requirement profiles are published for the three obligating states: Arizona cash rounding law, Georgia cash rounding law, Indiana cash rounding law, Kentucky cash rounding law, Oklahoma cash rounding law, Virginia cash rounding law, Washington cash rounding law, Connecticut cash rounding law, Alabama cash rounding law, Florida cash rounding law, Maryland cash rounding law, Minnesota cash rounding law, Hawaii cash rounding law, Missouri cash rounding law, Tennessee cash rounding law, Oregon cash rounding law, Nebraska cash rounding law, Vermont cash rounding law, Idaho cash rounding law and New Mexico cash rounding law. Profiles for additional states are added as each field verifies against enacted text.
Enactment and effective dates are not the same date
Across the 20 enacted states, the median interval between enactment and application is 26 days, 8 states apply on the day of enactment, and the longest interval on record is Indiana, 302 days. A compliance configuration keyed to signing dates is therefore wrong in both directions: early in some states, late in others.
The live view of which statutes are in force today, and which are counting down to an application date, is maintained on the tracker.
Where federal law sits
The end of penny production came from Treasury action under existing coinage authority rather than from new legislation. The Common Cents Act would make the change statutory. The House passed H.R. 3074 by voice vote on July 14, 2026, and the Senate passed companion bill S. 1525 by unanimous consent on August 7, 2026. Neither text requires rounding, and neither preempts state law. Current federal status is tracked on the federal legislation page.
The open questions in the record
Three published Centsless white papers examine gaps in the current framework: the absence of observed per-transaction rounding data behind the distributional assessment Congress ordered, the absence of a verifiable machine-impact evidence base behind the authorized nickel composition change, and the dependence of every enacted state statute on a fixed five-cent increment.
Rounding in a POS system is not the same as compliance
Most point-of-sale platforms can round a cash total. Far fewer can select the rule by jurisdiction, hold the tax base the statute requires, segregate mixed tender, and produce a per-transaction record that survives review. The difference is set out in POS cash rounding compared with cash rounding compliance.
Frequently asked questions
What is cash rounding compliance?
Cash rounding compliance is the practice of applying a jurisdiction's legally specified rounding rule to the final cash total of a transaction, computing tax on the base the statute requires, leaving electronic payments at the exact cent, and retaining evidence that each of those things happened. It is a compliance obligation rather than a pricing decision, because the rule, the base, and the exclusions are set by statute and differ by state.
Is cash rounding required by law?
No single national rule applies. 20 states have enacted cash rounding statutes since penny production ended. Most are permissive, meaning a merchant may round but is not required to. A smaller group obligates merchants to round. The federal Common Cents Act, as passed by each chamber, permits rounding rather than requiring it and does not override state law.
Does cash rounding apply to card payments?
No. Every enacted framework limits rounding to cash settlement. Card, debit, check, and electronic payments are charged to the exact cent. Rounding an electronic payment is an overcharge in every jurisdiction that has legislated on the subject, which makes payment-type segregation the single most important control in a rounding implementation.
How is sales tax handled when a cash total is rounded?
Most enacted states require tax calculated and remitted on the pre-rounded amount. Georgia, Hawaii and Indiana round a tax-inclusive total, and Minnesota does not address tax computation.
What records should a merchant keep?
Statutes rarely prescribe a record format, but liability protection generally attaches to adherence to the specified method, which a merchant has to be able to demonstrate. A defensible record captures the pre-rounding total, the rounding direction and amount, the payment type, the jurisdiction rule applied, and a reference into an append-only audit log, retained per transaction rather than reconstructed from daily totals.
Does rounding disadvantage SNAP or EBT customers?
It must not. Federal SNAP rules require that participating customers receive the same prices and terms as other customers. Because EBT settles electronically at the exact cent while cash is rounded, the control that matters is the same one that protects card payments: rounding is applied to the cash tender path only.
Reviewing your rounding posture
Centsless maintains the jurisdiction record behind this page and builds the evidence layer that sits beside it. Currently tracking 20 enacted state frameworks.
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