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Cash Transaction Rounding for Pennies

State Controller Policy

Effective Date: 03/01/2026
Approved by: Robert Jaros, CPA, MBA, JD, Colorado State Controller

1. Authority

  • a. §24-30-201(1), C.R.S. (Accounts and control – controller)
  • b. Pending S.1525 Common Cents Act and companion bill H.R. 3074.

2. Definitions

  • a. Cash – money in a tangible form of currency such as dollar bills and coins.
  • b. Penny – The United States one-cent coin.

3. Background

  • a. In April 2025, Congress introduced the “Common Cents Act.”  The Act directs the Secretary of the Treasury to stop minting the penny, and to require cash transactions to be rounded up or down to the nearest 5 cent.
  • b. In late 2025, the Mint halted the production of pennies for circulation. The penny continues to circulate and remains legal tender.  Eventually, there will not be pennies in circulation. 

4. Applicability

  • a. State agencies selling goods or services in a cash transaction, entering into any other transaction that results in a payment or transfer of cash between the parties to the transaction, may refer to this policy.

5. Policy

  • a. Notwithstanding any other provision of law, any person selling goods or services in a cash transaction, entering into any other transaction that results in a payment or transfer of cash between the parties to the transaction, or paying cash wages to an employee as compensation shall round the payment in the following manner:
    • i. Rounding Down —In any case in which the total transaction amount, including any taxes, ends with 1 cent, 2 cents, 6 cents, or 7 cents as the final digit, the amount of cents in the sum shall be rounded down to the nearest amount divisible by 5 for any person seeking to make payment with legal tender.
    • ii. Rounding Up – In any case in which the total transaction amount, including any taxes, ends with 3 cents, 4 cents, 8 cents, or 9 cents as the final digit, the amount of cents in the sum shall be rounded up to the nearest amount divisible by 5 for any person seeking to make payment with legal tender
  • b. Exception - Subsection (a) shall not apply to a transaction:
    • i. in which the total transaction amount, including any taxes, totals $0.01 or $0.02, in which case that transaction amount shall be rounded up to $.05 for any person seeking to make payment with legal tender; or
    • ii. for which payment is made by any demand or negotiable instrument, electronic fund transfer, check, gift card, money order, credit card, or other similar instrument or method.

State agencies shall provide guidance on rounding for pennies to their customers, retailers, and others who transact in cash with the agency.  An agency policy may comply with this policy depending on the agency’s situation.