The Penny Is Officially Gone — Here's the New Cash Rule Hitting Your Register

Your Register Drawer Just Ran Out of Pennies

If your cashiers have been quietly digging through empty penny trays for exact change, you're not imagining a shortage — the U.S. Treasury stopped producing new pennies back in November 2025, and the existing supply has been drying up ever since. Now the legal patchwork for how businesses are supposed to handle cash transactions without them is catching up, state by state, and it's moving fast.

The most recent example: Missouri's House Bill 2819 took effect on August 28, 2026, giving businesses there the option to round cash totals to the nearest nickel. Missouri is now one of roughly 19 states that have passed rounding legislation just this year in response to the penny phase-out, on top of five states — Arizona, Indiana, New Mexico, Tennessee, and Utah — that already had laws on the books by March.

How the Rounding Actually Works

Under Missouri's law, and most of the state laws like it, the rounding rule is simple in concept: it only applies to the final cash total after all merchandise, discounts, and sales tax have been calculated, and it only applies if a customer is paying with physical cash.

• Totals ending in 1, 2, 6, or 7 cents round down to the nearest nickel
• Totals ending in 3, 4, 8, or 9 cents round up to the nearest nickel
• Totals already ending in 0 or 5 cents aren't affected
• Debit and credit card payments are untouched — rounding never applies to electronic transactions

Crucially, rounding changes what a customer hands over at the register, not what the business owes in sales tax. Missouri's Department of Revenue, like most other states with similar laws, has been explicit that businesses must still calculate and remit sales tax based on the original, pre-rounded total. That means your point-of-sale and bookkeeping systems need to track two numbers — what the customer actually paid in cash, and what you owe the state — rather than just one.

Why This Is Happening Now

The Treasury's decision to stop minting pennies was driven largely by cost: each penny reportedly cost more to produce than it was worth, and with roughly 300 billion pennies already in circulation, officials calculated the country could function without adding more. But no one action from Washington told states or businesses exactly how to handle cash transactions once pennies became scarce, so state legislatures have spent 2026 filling in that gap individually — and not always the same way.

Arizona is currently the only state where cash rounding is mandatory; everywhere else that has passed a law, including Missouri, rounding is optional for business owners. That distinction matters if you operate in more than one state: a rounding policy that's simply a courtesy in Missouri could be a legal requirement in Arizona.

Meanwhile, Congress has been working on a federal fix. The Common Cents Act passed the House by voice vote on July 14, 2026, and the Senate passed its own companion version, S.1525, by unanimous consent on August 7. However, because the two chambers passed slightly different bill text, the House still needs to approve the Senate's version before it can go to the President's desk — so for now, the state-by-state patchwork remains the operative law of the land.

What This Means for Your Business Right Now

If you run a business that handles meaningful cash volume — a restaurant, coffee shop, salon, food truck, or retail counter — this affects your daily operations more than most regulatory news does. A few concrete steps worth taking:

• Check whether your state has passed a rounding law, and whether it's mandatory or optional where you operate
• Update your point-of-sale system or train staff on manual rounding if your software doesn't automatically calculate it
• Keep sales tax calculations tied to the pre-rounded total, not the rounded cash amount collected
• Post a visible notice about your rounding policy at the register — several state laws either require this or strongly recommend it to avoid customer confusion
• Watch for discrepancies during end-of-day cash reconciliation, since rounding introduces small, cumulative gaps between recorded sales and cash collected

Those small gaps are exactly the kind of thing that can quietly throw off your books if you're not tracking them deliberately. It's a good moment to revisit how your profit and loss statement categorizes cash-handling variances, so rounding differences don't get lost in an "unexplained" line item at tax time.

A Patchwork That Isn't Finished Yet

With roughly two dozen states now having some form of penny-related legislation and more expected to introduce bills when legislatures reconvene in 2027, this is very much a moving target rather than a settled rule. Businesses operating across state lines, or with multiple locations, should expect to maintain different cash-handling policies depending on jurisdiction for at least the next year or two, until — and if — the federal Common Cents Act gets reconciled and signed.

In the meantime, if your business is still primarily built around a personal checking account rather than a dedicated business account, now is a good time to separate the two — a proper business bank account makes it far easier to reconcile daily cash deposits against sales records when the numbers no longer match to the penny by design.

It's also worth double-checking your local business license requirements if you're opening a new cash-handling location this year, since some municipalities have started folding point-of-sale and cash-handling disclosure rules into their standard licensing paperwork in response to the penny transition.

Why the Treasury Pulled the Plug on Pennies

The math behind the decision was straightforward: for years, the U.S. Mint has reported that it costs more than one cent to produce a single penny, once metal, labor, and distribution are factored in. With an estimated 300 billion pennies already sitting in circulation, drawers, and jars across the country, officials concluded there was no practical need to keep manufacturing more at a loss. Canada made a similar move over a decade ago and phased in rounding rules for cash transactions without major disruption, which U.S. lawmakers have pointed to as a rough template.

The difference in the U.S. is scale and structure — with fifty separate state legislatures instead of one national government setting the rule, the rollout has been far more fragmented, which is exactly why a business with locations in, say, Missouri and Illinois needs to check both states' rules rather than assuming one policy fits everywhere.

Frequently Asked Questions

Do I have to round my prices, or just my cash transactions?

Under Missouri's law and nearly every similar state law passed this year, rounding applies only to the final cash total a customer pays — not to how you price individual items, and not to card or digital payments. Your menu, price tags, and invoices stay exactly as they are.

What if I just keep giving customers store credit instead of coins?

That's a common workaround, and it's legal in most states, but check your state's specific consumer protection rules first — some states that ended penny production also updated their unclaimed property or gift card laws in the same legislative session, which can affect how long you're required to honor small credit balances.

Will my point-of-sale software handle this automatically?

Many major POS providers pushed rounding-calculation updates in the first half of 2026 in anticipation of state laws like Missouri's, but it's worth confirming directly with your vendor rather than assuming — some smaller or older systems still require manual rounding at checkout.

Bottom Line

The penny isn't coming back, and the rules for handling cash without it are being written state by state, in real time. Missouri's new law is just the latest entry in a list that's grown to roughly 19 states in a single year. Whether rounding is optional or required where you do business, the practical work — updating your point-of-sale system, training staff, and keeping tax calculations clean — falls on you now, not later.

Photo by Simon Kadula on Unsplash