Alabama Introduces Cash Rounding Legislation Amid Penny Shortage
Alabama Legislature
Source Overview
A bill introduced by Representative Norman Crow (R-Tuscaloosa) with 10 co-sponsors would authorize businesses to round in-person cash transactions to the nearest five cents. The bill explicitly states rounding does not change sales price, sales tax collected under Section 40-23-26, or any other fees. Effective immediately upon passage. **Rounding Rules:** - 1 or 2 → round down to 0 - 3 or 4 → round up to 5 - 6 or 7 → round down to 5 - 8 or 9 → round up to 0 **Scope:** - Applies to in-person cash transactions only - Mixed-tender: rounding applies only to cash portion - Does not apply to credit cards, checks, or electronic transfers **Disclosure:** - Department of Revenue required to post public notice on its website **Legislative Stage:** - House Financial Services Committee hearing held March 10, 2026
Key Takeaways
- Bill introduced by Rep. Norman Crow (R-Tuscaloosa) with 10 co-sponsors
- Authorizes rounding of in-person cash transactions to nearest five cents
- Sales tax, sales price, and fees explicitly unaffected by rounding
- Rounding may apply to total transaction amount or change due (merchant discretion)
- Mixed-tender transactions: rounding applies only to cash portion
- Department of Revenue must post public notice
- Effective immediately upon passage
- Currently in House Financial Services Committee
Our Two Cents
Alabama joins a growing roster of states addressing penny shortages through formal rounding legislation. The bill's explicit tax protection and mixed-tender provisions demonstrate increasing legislative sophistication. However, the dual-path option, allowing merchants to round either the total or the change due, introduces a structural inconsistency that could produce different consumer outcomes depending on retailer implementation. **Key Implications:** - Retailers may gain legal clarity on rounding practices - Cash transaction handling may become standardized within the state - Multi-state retailers will need jurisdiction-aware rounding logic - The total-vs-change-due option creates a compliance divergence point > **Centsless Legislation Tracker** monitors rounding legislation across all U.S. jurisdictions in real time.
Open Questions
- ?Will the dual-path rounding option (total vs change due) create inconsistent consumer experiences?
- ?Will the bill advance through the House Financial Services Committee this session?
- ?How will refunds and returns be handled under the rounding framework?
- ?Will neighboring southeastern states follow Alabama's approach?
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