As pennies quietly disappear from Michigan cash drawers, lawmakers in Lansing are hustling to give shoppers a little breathing room. Yesterday, state Sen. Jeff Irwin introduced a bill that would require retailers to round final totals down to the nearest nickel for cash payments after sales tax is applied. The proposal is pitched as a consumer-friendly stopgap while businesses and banks adjust.
Senate Bill 1014, introduced in Lansing yesterday, would force businesses to round cash prices down to the nearest five cents, so a $1.04 bill becomes $1.00, and $1.06 becomes $1.05, as reported by ClickOnDetroit. The outlet notes the bill was sent to the committee the same day. Backers say the rule is meant to keep retailers from quietly pocketing small rounding gains while registers and supply chains catch up to the new reality.
What the bill would do
According to the Michigan Legislature, the bill would apply rounding only after sales tax is calculated and only to in-person cash transactions. Card, debit, and digital payments would still be charged to the exact cent, so most purchases would be unaffected on paper, but the change could matter most to shoppers who rely on cash. If the measure passes, retailers and point-of-sale vendors would need to update receipts to show the rounded total and train staff on how and when to apply the new rule.
Why pennies are disappearing
The scramble in Lansing follows the federal decision to stop making new pennies. President Donald Trump directed the Treasury to halt penny production in 2025, and the Mint produced its last regular circulating pennies later that year, according to the Washington Post. The Treasury now estimates that about 114 billion pennies exist, but says a large share is sitting in jars and drawers instead of circulating. The department has issued rounding guidance and is urging the public to spend or deposit coins to help ease the strain on cash transactions, per the U.S. Department of the Treasury.
How states and stores are reacting
States and trade groups have been racing to put out rules and recommendations so merchants are not left guessing at the register. The National Conference of State Legislatures recommends what it calls "symmetrical rounding" as the fairest approach: totals ending in 1, 2, 6, or 7 cents would be rounded down, and those ending in 3, 4, 8, or 9 cents would be rounded up, according to the NCSL. Reporting on state responses points to a patchwork of nonbinding guidance and bills around the country as regulators try to head off wildly different cash totals for the same purchases, per Stateline.
What shoppers should know
The Treasury says pennies are still legal tender and advises businesses to calculate sales tax first and then apply whatever rounding rule their state adopts. That order of operations is meant to avoid surprise shifts in sales tax liability, according to the U.S. Department of the Treasury. For anyone who wants totals down to the cent, paying with cards or digital wallets will still generate penny-accurate receipts. Cash customers, meanwhile, will need to keep an eye out for posted rounding policies at the register.
Legal note
Because sales tax is usually computed to the penny, states may have to tweak statutes or issue formal guidance so rounding is administratively clean and holds up in court, a point underscored in the NCSL report. Retailers are being advised to track committee hearings and state revenue guidance, and consumers who rely on cash, often lower-income households, may want to monitor how any changes could affect day-to-day purchases.
Senate Bill 1014 remains in committee. If it moves forward, lawmakers will hold hearings that retailers will be watching closely for implementation specifics. We will continue to follow the bill and any official word from Lansing and the Treasury that clarifies how cash transactions are supposed to work in a post-penny world.
