The North Carolina Department of Revenue (DOR) has issued guidance to retailers that round cash transactions due to the suspension of penny production by the U.S. Mint. On November 12, 2025, the U.S. Mint announced that it produced its last penny for circulation. The DOR has subsequently been notified that retailers are encountering a shortage of pennies and rounding cash transactions after the calculation of sales and use tax as a result.
The DOR has been made aware of two rounding methods that are being used by retailers. The first is symmetrical rounding, in which cash transactions are rounded up or down to the nearest five-cent increment. The second is the rounding of all cash transactions down to the nearest five-cent increment.
Retailers must calculate sales and use tax on the sales price of or gross receipts derived from taxable sales. If a retailer does after-tax rounding, it will not impact the calculation of sales and use tax due. The retailer calculates the sales price or gross receipts from the transaction before rounding.
If a retailer rounds a cash transaction down to the nearest five-cent increment after calculating tax, the rounding does not reduce the tax due. If a retailer rounds a cash transaction up to the nearest five-cent increment after calculating tax, the rounding does not increase the sales price or gross receipts from the sale.
Note that this guidance does not impact any non-cash transactions or transactions when retailers accept exact change.
The DOR notes that North Carolina continues to require sales and use tax to be calculated to the third decimal place on the final sales price of taxable items and rounded to the nearest cent. A retailer may elect to compute the tax due on a transaction on an item or invoice basis, and the rounding of tax is applied to the aggregate tax due. All sales and use tax charged to customers must be reported and remitted to the DOR.
Finally, North Carolina requires taxpayers to keep records that establish their sales and use tax liability. Retailers that round cash transactions must keep records that document the rounding of cash transactions. The DOR states that a retailer may update its point-of-sale system to record rounding transactions on customer receipts and in its internal accounting systems. (Directive No. SD-26-1, North Carolina Department of Revenue, January 22, 2026)