Maryland businesses can now round specified cash transactions to the nearest five cents following legislation responding to the growing national penny shortage.

The change follows the US Treasury’s November 2025 decision to stop producing new pennies for circulation, creating increasing difficulty for businesses trying to provide exact change during cash transactions.

While pennies remain legal tender and continue circulating through the Federal Reserve system, the shortage prompted lawmakers to authorize limited rounding flexibility for merchants accepting cash.

HB 1026 and SB 893 took effect immediately on May 12, 2026, after Governor Wes Moore signed the bills as emergency legislation.

According to guidance from the Maryland Comptroller, under the new law, merchants may either round the final purchase price or round the customer’s change, but not both. Businesses must round down when totals end in 1, 2, 6, or 7 cents and round up when totals end in 3, 4, 8, or 9 cents.

The law applies only to cash transactions, including in-person purchases and certain phone, mail, or internet transactions paid in cash. Customers paying with exact change still receive exact pricing. Gift cards and electronic payments do not qualify as cash under the law.

Importantly, the legislation does not change how Maryland calculates sales tax.

Businesses must still calculate sales and use taxes based on the original taxable price before any rounding occurs. The law specifically prohibits merchants from using rounding to alter taxes or fees associated with a transaction.

Visit the Comptroller of Maryland website to read the detailed guidance explaining how the law works, including examples involving discounts, coupons, taxes, and customer change calculations.