Full Breakdown
Arizona Implements Penny Rounding Law Amid National Currency Changes
3/14/2026, 10:03:14 PM
Overview of the New Law
Arizona Governor Katie Hobbs has signed House Bill 2938, which mandates that businesses round cash transactions to the nearest five cents when pennies are unavailable. This law addresses the growing issue of penny shortages following the cessation of penny production announced by former President Donald Trump, who deemed it wasteful due to the cost of producing each penny exceeding its face value. The U.S. Mint reported that it costs 3.7 cents to produce a single penny as of 2024.
Details of the Rounding System
Under the new law, cash totals ending in 1 or 2 cents will be rounded down to the nearest five cents, while totals ending in 3 or 4 cents will round up. Amounts that end in 0 or 5 cents will remain unchanged. The Greater Phoenix Chamber has endorsed this legislation, stating it provides clarity for both consumers and businesses, facilitating smoother cash transactions in light of the declining availability of pennies.
Broader Context and Legislative Trends
The Arizona law is part of a broader trend, with similar legislation being considered or enacted in several states, including Florida, Indiana, Oregon, Tennessee, Virginia, and Washington. In Florida, for instance, a recent measure allows retailers to round cash transactions to the nearest nickel, reflecting a growing consensus on the need for a standardized approach to handling cash transactions without pennies. U.S. Rep. Lisa McClain, R-Mich., has introduced a federal bill aimed at establishing symmetrical rounding practices nationwide to prevent a "confusing patchwork of state policies." However, this bill has yet to be voted on in Congress.
Economic Implications and Consumer Reactions
The Treasury Department has indicated that it will continue to circulate the existing 114 billion pennies for as long as possible, despite the production halt. While the elimination of pennies is projected to save the U.S. government approximately $56 million annually, there are concerns about the potential impact on consumer prices. Research from the Federal Reserve Bank of Richmond suggests that rounding practices could lead to businesses benefiting financially at the expense of consumers, particularly as prices that do not end in zero or five are more likely to round up.
Consumer reactions have been mixed. Some individuals express frustration over losing even small amounts of money due to rounding, while others, like Nikki Capozzo-Hennessy from Connecticut, acknowledge the practicality of a consistent rounding rule. Capozzo-Hennessy noted that while it may seem trivial, the cumulative effect of rounding could be significant over time.
Official Statements & Responses
The Greater Phoenix Chamber stated, “With pennies no longer being produced and federal policy not yet in place, Arizona needed a commonsense solution that keeps everyday transactions running smoothly.” Meanwhile, Rep. Lisa McClain emphasized the importance of federal legislation to avoid confusion among states, highlighting the need for uniformity in rounding practices.
What's Next
As states continue to grapple with the implications of penny shortages, the proposed federal legislation remains pending in Congress. The outcomes of these discussions will likely shape the future of cash transactions across the United States, as businesses and consumers adapt to a currency landscape increasingly devoid of the one-cent coin.
