End of Penny Production

The U.S. government has ended production of the penny. This will result in penny shortages affecting taxpayers making cash payments and calculating sales tax. For additional details, see State Tax Automated Research (STAR) Accession No. 202512001M.

Cash Payments to the Comptroller's office

• Our agency will continue to accept pennies while they are legal tender. Exact change will continue to be accepted.
• We will make change if the office accepting payment has pennies available.
• If necessary, we will round cash payments down to the nickel. If the payment is for multiple tax periods or tax types rounding is applied to the total amount due.

Example: A taxpayer owes $3,000.04. The taxpayer does not have exact change and the office accepting the payment does not have pennies available. We will accept $3,000 as payment in full.

Rounding will not apply to any payments to the Comptroller's office using a different method, such as electronic payments or check payments. Those payments will still be handled to the penny.

Calculating Sales Tax on Cash Transactions

Sales tax on electronic transactions will continue to be calculated under current practice. Tax amounts of $0.005 or higher should be collected and remitted as $0.01 and amounts less than $0.005 should not be collected or remitted.

The tax calculated and remitted on cash transactions should be the same as the tax calculated and remitted on electronic payments. Retailers collecting and remitting sales tax on cash transactions should follow these guidelines:

• Taxpayers must calculate the sales tax on a transaction on the sales price of the item, before any rounding. This amount must be remitted to the Comptroller's office.
• If the total of the sales price and the tax due cannot be collected due to the penny shortage, the retailer may round the total collected from the customer.
  • If this rounding rounds by $0.04 or less, we will not assess any additional tax due from the change in sales price.
  • If a retailer rounds by more than $0.04, we will assess any additional tax due from the change in sales price.

Example: A retailer charges $299.99 for a taxable item and the applicable tax rate is 8.25 percent. The tax due on the item is $24.75 and the total due is $324.74. The customer pays in cash.

If the retailer collects $324.70 or $324.75 from the customer, the Comptroller's office will not adjust the sales price.

If the retailer collects any amount less than $324.70 or greater than $324.75, the Comptroller's office will adjust the sales price.