Lack of Cents Brings Rounding Laws
Production may have stopped, but the future of the penny remains uncertain as states begin adopting their own cash-rounding rules.
Production of our 1-cent coin may have ceased, but the legal tender status of the denomination continues. Since there hasn’t been any federal legislation through which the cent is officially defunct, it is possible that at some later date its production might be resurrected, likely in some very inexpensive base metal.
The problem remaining is that the administration only dropped one shoe. No one knows if they will drop the other, which is the official Federal rules on rounding cash transactions. What is called Swedish Rounding has been done in other countries, but so far, it appears to be a free-for-all in the United States. Swedish Rounding only impacts cash transactions. You can still make purchases right to the cent if you pay by check, debit card, credit card, or any other form of payment. Swedish rounding involves adjusting the price to the nearest available coin denomination.
A transaction involving pricing to one or two cents would be rounded down to zero. Should the transaction end in eight or nine, the price would be rounded up to 10 cents. On May 12, Maryland took the initiative, imposing a state law through which if a total ends in 1, 2, 6, or 7 cents, the amount is rounded down. Totals ending in 3, 4, 8, or 9 cents are rounded up. The rounding is still optional if businesses have sufficient 1-cent coins on hand and choose to continue using them.
As might be expected, the Comptroller’s Office said, “The rounding law does not change the taxable price of a product or service.” It now appears we have nine states that have adopted their own rounding laws. If the federal government doesn’t follow the opportunity to resurrect minting the cent remains a possibility.
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