Maryland Enacts ‘Penny Rounding’ Law Amid Coin Shortage — What Consumers Need To Know
As excerpted from TheBayNet.com:
ANNAPOLIS, Md. — A new Maryland law allowing retailers to round cash transactions to the nearest nickel took effect immediately last week following its signing by Gov. Wes Moore as an emergency measure.
The legislation, backed by the Maryland Retailers Alliance, is designed to address a growing shortage of pennies that has made it increasingly difficult for businesses to provide exact change in cash transactions.
According to a May 2026 tax alert issued by the Maryland Comptroller’s Office, the cessation of penny production “has created a penny shortage, making providing change for cash transactions difficult in some cases.”
How The Rounding Works
Under the law, retailers conducting cash transactions may round either the final price or the change due — but not both — to the nearest 5 cents when exact change is unavailable.
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 policy applies only to cash payments and does not affect credit, debit or digital transactions. It also does not apply when customers provide exact change.
Tax Calculations Unchanged
Officials stressed that the rounding law does not impact how sales tax is calculated. Taxes must still be applied to the original, unrounded price.
“The rounding law does not change the taxable price of a product or service,” the Comptroller’s Office noted, adding that sales tax must be calculated before any rounding occurs.
Optional For Businesses
Participation in the rounding practice is optional. Businesses that still have sufficient pennies may continue to provide exact change, and the law does not require rounding in any transaction.
The measure took effect May 12 after being passed by the Maryland General Assembly as companion bills — House Bill 1026 and Senate Bill 893 — and signed into law the same day.
