The Tennessee House of Representatives approved legislation to allow businesses to round cash payments to the nearest nickel due to the U.S. penny no longer being produced.
NASHVILLE, Tenn. – The Tennessee House of Representatives approved legislation to allow businesses to round cash payments to the nearest nickel due to the U.S. penny no longer being produced.
House Bill 1744, sponsored by State Rep. Charlie Baum, R-Murfreesboro, allows private businesses and financial institutions to round cash transactions up or down to the nearest five cents when exact change is unavailable.
“As we adapt to changes in currency production, this legislation protects both consumers and businesses,” Baum said. “It puts a clear, transparent rounding system in state law so customers know how their change will be calculated, while giving businesses confidence that if they follow that system, they are protected by the law.”
The U.S. Mint struck its final pennies in November under an order from President Donald Trump, after reporting an $85.3 million loss on penny production in fiscal year 2024.
Private entities and financial institutions exchanging currency can only use this rounding formula for cash transactions and only when they do not have exact change available.
This legislation outlines a specific rounding formula based on how the total transaction amount ends:
- $0.01-$0.02: Round down to nearest five cents
- $0.03-$0.04: Round up to nearest five cents
- $0.06-$0.07: Round down to nearest five cents
- $0.08-$0.09: Round up to the nearest five cents
Businesses are still required to calculate and report sales tax to the penny.
The companion bill is still moving through the Senate. If passed, it will head to Gov. Bill Lee’s desk for his signature.
Charlie Baum represents District 37 in the Tennessee House of Representatives which includes part of Rutherford County.
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