US Treasury Stops Minting Pennies: Sales Tax Guidance for Retailers
Summary
The U.S. Treasury has halted penny production, potentially limiting retailers' ability to provide exact change in cash transactions. South Dakota DOR advises that sales tax calculations remain unchanged — retailers must continue computing tax by multiplying the taxable price by the applicable rate and rounding to the nearest cent using standard rounding rules. For cash transactions where exact change is unavailable, retailers may round the total cash amount to the nearest nickel, though this rounding does not affect the sales tax amount itself.
“If exact change cannot be made, retailers may round the total cash amount to the nearest nickel, but this does not affect the sales tax amount itself.”
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GovPing monitors SD DOR Newsroom for new tax regulatory changes. Every update since tracking began is archived, classified, and available as free RSS or email alerts — 5 changes logged to date.
What changed
The U.S. Treasury has discontinued penny minting, which may create cash-change shortages during retail transactions. South Dakota DOR has issued guidance clarifying that sales tax calculations remain unaffected by this monetary change. Retailers must continue to compute sales tax on the full taxable amount and round to the nearest cent using standard rules.
Retailers accepting cash should note that when exact change cannot be given, they may round the total cash payment to the nearest nickel. This rounding allowance applies only to the cash payment amount and does not modify the calculated sales tax. Electronic payments are unaffected since exact change is not required. The Streamlined Sales Tax webpage provides additional guidance on penny elimination policies.
Archived snapshot
Apr 25, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Penny Elimination
The U.S. Treasury has stopped minting pennies, leading to potential shortages that may prevent retailers from giving exact change during cash transactions.
This change does not affect how sales tax is calculated. Retailers must continue to compute sales tax by multiplying the taxable price—the total amount of all taxable items in a single transaction—by the applicable tax rate, then rounding the tax to the nearest cent using standard rounding rules. If exact change cannot be made, retailers may round the total cash amount to the nearest nickel, but this does not affect the sales tax amount itself. Electronic payments such as credit, debit, or digital methods are not affected, since exact change is not required.
The Streamlined Sales Tax webpage offers additional guidance. Retailers should also be aware that other state or federal laws may affect their rounding policies, and they should consult legal counsel to determine any compliance requirements.
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