The Future of the Penny
The United States is transitioning away from routine one cent coin production. This guide explains what that means in practice, what the twenty enacted state statutes actually require, and how merchants, POS platforms, and financial institutions can prepare without overcorrecting.
Updated June 26, 2026 · Advisory, not legal counsel
Where things stand
The cost to produce a one cent coin has exceeded its face value for nearly two decades. The United States Mint has wound down routine penny production. Existing pennies remain legal tender and will continue to circulate, but the volume reaching merchants is declining.
The operational effect is straightforward. As pennies become impractical to dispense, the cash portion of a transaction needs a defined rounding rule. Card, mobile, and ACH payments are settled to the exact cent and are not affected.
Twenty states have enacted cash rounding statutes. Sixteen apply to general retail cash transactions. Four are limited to government, agency, or tax administration scope. No two statutes are identical, and two additional states have bills awaiting executive action.
What changes
- Cash totals need a defined rounding step at the register.
- POS software must distinguish cash from other tenders and apply the rule to the cash portion only.
- Refunds and split tender need a reversal path that does not introduce drift.
- Audit records should capture rounding direction and amount at the transaction level.
What does not change
- Pennies remain legal tender for any payment.
- Card, mobile, and electronic transactions settle to the exact cent.
- Sales tax is computed on the pre rounding subtotal in most jurisdictions.
- Posted prices and shelf labels are unaffected.
A roadmap for the post-penny economy
- 1
Map your jurisdictional footprint
Identify the states in which you accept cash. Separate enacted statutes from active bills and from administrative guidance. Treat the four narrow scope states (Kentucky, Minnesota, New Mexico, Oklahoma) as distinct from the fourteen general retail states.
- 2
Confirm the method in each enacted state
Most enacted statutes use symmetrical rounding to the nearest five cents. Indiana permits operator choice and rounds the tax inclusive total. Arizona mandates the rule with no alternative method. Several states delegate the method to a state agency and remain pending final confirmation.
- 3
Audit your point of sale behavior
The rounding step must apply to the cash portion only, leave non cash tenders untouched, and survive split tender and refund flows. Drift between the customer facing total and the journal is the most common implementation failure.
- 4
Document the audit trail
Per transaction records of rounding direction and amount are the basis for defending against disparate treatment claims, especially in jurisdictions with cash acceptance laws.
- 5
Plan for New York
If New York enacts its pending bill, symmetrical rounding will operate alongside an existing cash acceptance statute that prohibits charging cash customers more than other customers. Transaction level documentation is the practical defense.
Common questions
Is the penny being discontinued?
Routine production has wound down. Existing pennies remain legal tender, and circulation will decline gradually as coins are retired.
Are pennies going away at the register?
Pennies are not being recalled. Cash totals will be rounded to the nearest five cents in states with enacted statutes once pennies become impractical to dispense.
Does no more pennies mean prices increase?
Symmetrical rounding averages to approximately zero across a representative basket. The neutrality model is publishable and auditable rather than assumed.
What about sales tax?
Most statutes compute sales tax on the pre rounding subtotal. Indiana is an exception in that it rounds the tax inclusive total. Confirm the specific rule per state.
Preparing for the transition?
Centsless provides jurisdiction aware rounding, refund normalization, and a per transaction audit trail across all fifty states.
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