The Nickel-to-Dime Problem

Since the United States struck its last circulating one-cent coin on November 12, 2025, twenty states have enacted cash rounding statutes. To our knowledge, every one of the twenty fixes the rounding increment at five cents by naming it, and none expresses the increment by reference to a variable, such as the smallest denomination then in circulation. The federal framework does the same: the rounding provisions of the Common Cents Act round to the nearest amount divisible by five.

The paper asks a narrow question. Not whether the nickel will disappear, which we do not predict and think unlikely in the near term, but what the drafting choice costs if the denomination set ever changes again. The nickel's unit cost has exceeded its face value for twenty consecutive fiscal years and reached 13.31 cents in fiscal 2025. Section 2 of the Common Cents Act exists because Congress judged the coin too expensive to leave alone.

Twenty states have enacted cash rounding statutes since the end of penny production. Their triggers, obligations, tax treatment, and liability shields differ substantially, and the differences are tracked state by state against primary sources in the Centsless legislation tracker. On one point the record is uniform: each names five cents as the settlement increment.

Two states broke the pattern on the trigger. Idaho conditions its rounding provision on whether a seller is unable to settle a cash transaction to the whole cent using denominations of United States coin or currency on hand. Tennessee conditions its authorization on whether exact change is available. Both name no coin in the condition, both ask an operational question the seller can answer, and both triggers would survive a change in the denomination set without amendment. The increment in each is nonetheless the same hard-coded five cents, which demonstrates that the trigger and the increment are separate drafting decisions.

Georgia's merchant mandate is unconditional, opening "Notwithstanding any law to the contrary," while the customer's right to tender exact change is conditioned on the one-cent piece remaining legal tender. The escape hatch was keyed to a coin; the obligation was keyed to nothing. Oklahoma's political subdivision provision opens with "unless actions by the United States Congress direct otherwise," making it, to our knowledge, the only enacted rounding law that defers on its face to a change from outside.

Section 3(a) of the Common Cents Act permits rounding by a fixed symmetric table: totals ending in one, two, six or seven cents round down and three, four, eight or nine round up, in each case to the nearest amount divisible by five. Section 3(b), captioned "Additional authority to round," permits rounding by a different logic, if the rounding is in favor of the customer, up where the person is paying the customer and down where the customer is paying the person.

The first rule is a table of digits calibrated to a five-cent settlement increment and cannot adapt if that increment changes. The second is a direction of travel and can. Congress drafted a denomination-dependent rule and a denomination-independent one side by side, and there is no committee record explaining either, because the text the committee of jurisdiction reported contained no rounding provisions at all.

A separate House bill, H.R. 1270, would suspend production of both the penny and the nickel for ten years. The Congressional Research Service has observed that eliminating the penny should increase nickel demand, which increases aggregate losses on the coin that twenty state statutes now depend on. The assumption may well hold. The nickel is more likely to be redesigned than retired. But the statutes do not depend on the nickel being likely to survive; they depend on it surviving, and they took that dependency on without anyone recording a decision to do so.

The distinction the drafting missed is between naming a unit of account, which is stable, and naming a settlement increment tied to a physical coin, which is contingent. Twenty acts did the second while assuming the first.

The remedy is not a new institution. Section 3(b) shows that a rounding rule can be written as a direction rather than a table, at no cost, in a form a change in the coinage would not break. Section 6 of the Senate-passed text creates a dated federal proceeding and a required phase-out plan before any circulating coin stops being minted, amending 31 U.S.C. 5111 to require advance notice to the covered committees.

A rounding statute that names the increment in effect, keys conformance to a date established under that phase-out plan, states its rule as a direction, and carries a transition provision would survive the next change in the denomination set without a legislative session. Congress supplied a durable form of rule and the makings of a determination event in adjacent sections, apparently without connecting them, and no state statute connects them either.