Bills respond to end of penny production with cash-rounding plan

By Chase Pray, Missouri News Network
JEFFERSON CITY — Two proposed bills would permit Missouri vendors to round cash transactions to the nearest 5 cents.
House Bill 2819 and Senate Bill 1620 address potential challenges after President Donald Trump’s decision last year to halt the production of the penny as a cost-saving measure. The U.S. Treasury Department estimates an immediate $56 million will be saved from the end of penny production.
But the elimination of the penny has produced challenges for cash transactions, with varying approaches offered by retailers. The bill seeks to legally set how cash transactions would be determined through rounding.
The bills would allow cash transactions ending in 1, 2, 6 or 7 cents to be rounded down. Totals ending in 3, 4, 8 or 9 cents could be rounded up.
Transactions not completed with cash, such as those done with credit and debit cards, would not be affected.
All rounding would be applied only after discounts and taxes have been calculated.
HB 2819 sponsor Rep. Brenda Shields, R-St.Joseph, calls the bill a “must pass” due to the clarity it provides to businesses.
“It’s become necessary that we pass this piece of legislation so that our retailers and our businesses can know exactly how they need to handle cash transactions,” she said.
Shields noted that a lack of anything statutory regarding the issue has led several retailers to reach out to ensure they were rounding correctly.
“(The retailers) were looking for guidance for the Department of Revenue so they would round correctly, and we were not able to give that advice because we had nothing in statute,” she said. “It’s nearly impossible with our tax laws on sales tax that you’re ever going to come to an exact nickel amount.”
The Department of Revenue expects the bills will have a limited impact on revenue since most transactions are already noncash. The Department of Commerce and Insurance also expects no fiscal impact for its organization.
Missouri joins a growing list of states implementing rounding systems as pennies begin to be phased out. Several states, such as North Carolina, New Jersey, Kentucky and Iowa, have already allowed retailers to round cash transactions.