States Work on Cash Rounding Laws as Penny Shortage Emerges After Trump Halts Minting
Months after the U.S. Mint halted penny production—citing a 2024 cost of about 3.7 cents per coin—the Treasury says roughly 114 billion existing pennies will remain in circulation and must still be accepted even as consumers and retailers report a practical shortage at registers. States are rushing to set cash‑rounding rules (some allowing, others requiring rounding), with Arizona, Florida, Oregon, Tennessee, Virginia and Washington passing bills and Indiana pursuing a two‑step approach to make rounding optional; Tennessee’s measure creates a consumer‑protection safe harbor for symmetrical rounding, some state agencies advise rounding after tax, analysts warn real‑world rounding could skew upward because many prices end in 8 or 9, and a House bill would impose nationwide symmetrical rounding.
📌 Key Facts
- The U.S. Mint has halted new penny production; the Mint said in 2024 each 1-cent coin cost about 3.7 cents to produce.
- The Treasury says roughly 114 billion existing pennies remain in circulation, must still be accepted as payment and will be kept in circulation “as long as possible.”
- Months after the last penny was minted, consumers and retailers are experiencing a practical shortage of pennies at the register, prompting states to move from theoretical planning to active legislation.
- States’ approaches vary: some bills would allow rounding while others would require it; Arizona, Florida, Oregon, Tennessee, Virginia and Washington have passed rounding bills and sent them to governors’ desks.
- Indiana is pursuing a two-step approach: an initial law requiring rounding for cash transactions not ending in 0 or 5, plus a second bill (awaiting the governor’s signature) that would make rounding optional and let businesses choose always-up, always-down, or symmetrical rounding.
- Tennessee’s law creates a consumer-protection ‘safe harbor’ for symmetrical rounding rather than mandating a particular rounding method.
- Some state agencies have issued administrative guidance that cash rounding should occur after tax is applied and that full tax amounts must still be remitted to the state.
- A Federal Reserve Bank of Richmond analysis of 2023 survey data found retail prices disproportionately end in 8 or 9, meaning real-world rounding is likely to skew upward and could shift millions of dollars from consumers to businesses.
- At the federal level, Rep. Lisa McClain (R‑Mich.) sponsored a bill that has passed out of the House Financial Services Committee to impose nationwide symmetrical rounding, but it has not yet received a House floor vote or any Senate action.
📊 Relevant Data
In 2024, consumers in households earning less than $25,000 per year relied on cash for 24 percent of their payments, compared to 10 percent for those earning $100,000 or more.
Latest Trends in Cash and Other Consumer Payments | Richmond Fed — Richmond Fed
President Trump directed the Treasury Department in February 2025 to halt penny production to reduce government spending, citing that producing the coin was wasteful and too expensive.
Trump wants to stop minting pennies. How would that work? - NPR — NPR
Rounding cash transactions to the nearest nickel due to the penny phase-out is estimated to cost U.S. consumers about $6.06 million annually, assuming current transaction patterns.
Rounding Up: The Impact of Phasing Out the Penny | Richmond Fed — Richmond Fed
In 2024, 22 percent of adults with household income below $25,000 were unbanked, compared to 1 percent of adults with income of $100,000 or more.
Report on the Economic Well-Being of U.S. Households in 2024 — Federal Reserve
📰 Source Timeline (4)
Follow how coverage of this story developed over time
- CBS reports that 'months after the U.S. minted its last penny,' Americans are now experiencing a practical shortage of the one‑cent coin in everyday transactions.
- The segment underscores that some states are in early stages of 'working on legislation' to address cash rounding, indicating the issue has moved from theoretical policy planning to an active consumer problem.
- The report frames the shortage as a lived reality at the register, rather than just a forward‑looking policy debate, sharpening the consumer‑impact angle.
- Confirms that in 2024 each penny cost 3.7 cents to produce, as cited by the U.S. Mint.
- Clarifies that the Treasury Department intends to keep approximately 114 billion existing pennies in circulation "as long as possible" and that they must still be accepted as payment.
- Details the House‑level federal response: a bill, sponsored by Rep. Lisa McClain, R‑Mich., has passed out of the House Financial Services Committee and would impose nationwide symmetrical rounding rules, though it has not yet received a House floor vote or Senate action.
- Lists specific states where rounding bills have passed both chambers and are on governors’ desks: Arizona, Florida, Oregon, Tennessee, Virginia and Washington.
- Provides more granular detail on Indiana’s approach: an initial law requiring rounding for any cash transaction not ending in 0 or 5, followed by a second bill making rounding optional and allowing businesses to adopt different rounding strategies (always up, always down, or symmetrical), pending the governor’s signature.
- Explains that Tennessee’s bill creates a safe harbor by exempting symmetrical rounding from state consumer‑protection claims rather than mandating rounding.
- Confirms specific 2024 U.S. Mint cost figure of 3.7 cents to produce each 1‑cent coin, cited as justification for halting production.
- Clarifies that roughly 114 billion existing pennies remain in circulation and must still be accepted as payment, per Treasury, even as production has stopped.
- Details Indiana’s two‑step legislative process: an initial law requiring rounding for all cash transactions where totals do not end in 0 or 5, followed by a second bill (awaiting the governor’s signature) that would make rounding optional and allow businesses to choose always‑up, always‑down, or symmetrical rounding.
- Adds that some states’ bills would merely allow rounding, while others would require it, and that Tennessee’s bill specifically provides a consumer‑protection ‘safe harbor’ for symmetrical rounding rather than mandating it.
- Reports that some state agencies have already issued administrative guidance specifying that rounding should occur after tax is applied and that full tax amounts must still be remitted to the state.
- Cites a Federal Reserve Bank of Richmond analysis of 2023 survey data showing that prices not ending in 0 or 5 disproportionately end in 8 or 9, implying that real‑world rounding would skew toward rounding up and thus net millions of dollars from consumers to businesses.