New cash-rounding law lets Maryland businesses adjust change by five cents
As published by WBALTV11:
BALTIMORE —Maryland has a new law on the books that impacts cash payments at checkout.
The emergency bill gives businesses the option of rounding up or down the amount of change to the nearest cent divisible by five.
Will all businesses have to do this? How does it impact sales taxes?
WBAL-TV 11 News has the answers.
This is just an option for business, as stores that use pennies to make exact change may still do so. This does not impact sales taxes that will be applied to the original unrounded price.
A new penny rounding law was a popular topic for callers, who gave their "two cents" on WBAL Radio's C4 & Brian Nehman morning radio show.
"I (kind of) like it," a caller said. "Those of us who have these jugs of pennies, be a good Samaritan (and) go to the Dollar Tree, pay your entire bill in pennies so they have enough pennies to give everyone change."
Gov. Wes Moore signed the emergency legislation last week. It's in response to the federal decision last year to stop making pennies. The new law gives retailers conducting cash transactions the option of rounding either the final price or the change due, but not both, to the nearest five cents when exact change is not available.
"I think it is (kind of) stupid. I don't think they should have stopped making the penny. It's going to screw over a lot of people who rely on pinching pennies," Ronan, a visitor to Baltimore, said.
"I hate pennies. I have so many of them. So, it's just convenient," Cathy from Baltimore said.
"I'm not liking it. You are nickel-and-dimed everywhere for tips and for all this and that. So, giving up a few cents here and there. Not loving it," Diana Castleberry from Baltimore said.
Here's how it works. If the price ends in 1, 2, 6 or 7 cents, the change in cash-only transactions may be rounded down to the nearest cent divisible by 5. If the price ends in 3, 4, 8, or 9 cents, the price can be rounded up to the nearest cent divisible by five. The owner of Melrose Place on The Avenue said she hadn't heard about the penny rounding option.
"Definitely one more thing to do. Definitely have to let my staff know. Definitely have to prepare for future transactions," Vishau Paysour, the owner of Melrose Place, said.
Shoppers should know the law only applies to cash payments, and exact change is still accepted. It is optional for businesses, and some may not do it. Sales tax stays the same and will be calculated on the original price.
"I'm OK with rounding. I'm not a big penny fan. So, I would say as long as it is consistent," Debbie Yare from Baltimore said.
The new law is widely supported by business groups, including the Maryland Retailers Alliance. Businesses are encouraged to make their rounding policies known to customers at the point of sale.
