On Tuesday, the Alabama House Financial Services Committee passed House Bill 545, legislation that would allow cash transactions in the state to be rounded to the nearest five cents.
The bill’s sponsor, State Representative Norman Crow, R-Tuscaloosa, explained that he introduced the legislation as a means of addressing the nationwide penny shortage brought about after President Donald Trump ordered the U.S. Mint to cease production of new pennies in 2025.
“The genesis of this was in February of 2025, President Trump directed the U.S. Treasury to halt production of pennies, and by the end of last year, more than half of the Federal Reserve’s vaults suspended penny orders or deposits due to depleted stocks,” Crow told the committee. “As banks receive fewer pennies, retailers are facing a growing challenge in providing exact change to their customers.”
Crow noted that a bill to address the elimination of the penny and provide for cash rounding has been introduced in both the U.S. Senate and House of Representatives, but stressed the need for Alabama to pass its own legislation in the meantime.
“Congress has introduced the Common Cents Act, which would address federal penny production and rounding,” Crow explained. “However, the timing and ultimate passage still remains uncertain. HB545 does not conflict or would not contradict the proposed federal law or federal measure.”
HB545 specifically dictates that the total amount of any in-person cash transaction may be rounded to the nearest five cents after the calculation of sales tax. If the final total of a cash transaction ends in one, two, eight or nine, then the final digit may be rounded to zero. If the final digit is a three, four, six or seven, then it may be rounded to five. The bill’s provisions would not apply to any non-cash transaction.
“The purpose of this legislation is three-fold,” Crow said. “One is to provide a clear, uniform standard for rounding cash transactions; to protect consumers and protect merchants through predictable, transparent rules; and thirdly to align Alabama with neighboring states like Georgia and Florida, who have already adopted similar policies.”
Crow added that the legislation has the backing of the Alabama Department of Finance and the Alabama Department of Revenue as well as a “broad coalition of retail and business supporters.”
The committee went on to pass a friendly amendment to the bill which provided small technical changes and a carve-out that would prevent the bill’s provisions from applying to payments to government entities in the state.
Following the amendment’s adoption, the committee voted to pass HB545, sending it to the House floor for further consideration.
