Tennessee cash rounding law

Tennessee permits rather than requires rounding. Public Chapter 602, Section 2(a) provides that where a public or private entity accepts cash and does not have exact change available, the entity may, in lieu of calculating the total transaction amount to the nearest penny, round off all figures used in the total transaction amount to the nearest nickel. Each of the four conditions is framed as a permission: the entity may round down where the total ends in 1, 2, 6 or 7 cents and may round up where it ends in 3, 4, 8 or 9 cents, with the hundredths place determinative. The bill as introduced would have required this; Amendment 012839 converted the requirement into a permission before passage. Where a public entity collects taxes, fees, surcharges, or assessments and elects to round, it rounds the amount collected from the customer while remitting the exact amount due. The act took effect on becoming law, March 18, 2026.

Exact-change availability, not penny production. Public Chapter 602, Section 2(a) makes the rounding permission available where an entity accepts cash and does not have exact change available. The authority therefore turns on the state of the till at the point of sale rather than on whether the one-cent coin remains in circulation. The conditional Consumer Protection Act shield in Tenn. Code Ann. 47-18-111(a) is written against the separate condition that the penny is no longer in production, so the operating trigger and the liability trigger are not the same condition.

The distinction between an operational trigger and a penny-production trigger is examined in The Nickel to Dime Problem.

Tax base is pre-rounded. The act expressly preserves the sales tax rounding rule in Tenn. Code Ann. 67-6-504(h) and does not relieve any entity from calculating sales tax to the penny and remitting the exact amount shown on an invoice or receipt.

Where rounding is elected, it reaches only the portion of the transaction paid in cash. It does not apply to transactions conducted electronically, and it does not alter the exact amounts authorized, cleared, or settled through any non-cash payment system.

Conditional statutory shield. The act amends Tenn. Code Ann. 47-18-111(a) under the Consumer Protection Act so that rounding a cash transaction to the nearest nickel does not constitute a violation, but the exemption is written to reach that practice if the penny is no longer in production. The protection is therefore contingent on that condition rather than unconditional, and it does not extend to rounding methods other than the one the act describes.