Washington has enacted Substitute House Bill 2334, allowing businesses and government agencies to round cash transactions to the nearest five cents (nickel) when pennies are not available. The law applies only to in-person cash payments and does not affect transactions paid by credit card, debit card, or electronic payment methods. Under the new rules, transactions with final amounts ending in 1, 2, 6, or 7 cents, the amount may be rounded down to the nearest nickel. Amounts ending in 3, 4, 8, or 9 cents may be rounded up to the nearest nickel. Amounts ending in 0 or 5 cents remain unchanged. Customers who have the exact amount due may still pay the exact amount without rounding.
For sales and use tax purposes, the legislation makes it clear that rounding does not change the taxable amount of the transaction. Businesses must continue to calculate and remit sales tax and use tax based on the original transaction amount before any cash rounding occurs. The rounding adjustment only affects the final cash amount exchanged between the customer and the seller. The legislation also provides protection for businesses that follow the new rounding rules. Lawful rounding practices cannot be treated as a violation of state or local laws and local governments are prohibited from adopting conflicting regulations. Additionally, differences between an advertised price and a rounded cash payment amount cannot be used as the basis for a consumer protection claim.
Washington businesses that accept cash payments should review their point-of-sale systems and cash handling procedures to determine whether they will implement cash rounding. Any implementation should ensure that tax calculations remain based on the original sales price, receipts accurately reflect transaction totals, cashiers understand when rounding is permitted and existing tax reporting procedures remain unchanged. Businesses should remember that any rounding adjustment applies only to the final cash payment amount. Sales tax, use tax and any other applicable fees must continue to be calculated and reported using the original transaction amount.
(Washington Substitute House Bill 2334, Relating to Adjusting the Price of a Cash Transaction to Eliminate the Need for Pennies, signed March 23, 2026)