Maryland Cash Transaction Rounding Authorization Bill

Maryland – Comptroller Releases Guidance on New Law Addressing Penny Shortage and Rounding in Cash Transactions

Maryland has issued guidance on rounding cash transactions to the nearest five cents due to the federal government ending penny production, as per new legislation (H.B. 1026 / S.B. 893).
Merchants should apply rounding after all discounts, deductions, taxes, and fees have been calculated for both the final price and any change given to the customer.
Crucially, Maryland’s rounding law does not alter the taxable price of a product; sales and use tax must still be calculated based on the original taxable price before any rounding is applied to the final cash transaction amount.

Maryland Cash Transaction Rounding Authorization Bill

HB 1026 allows Maryland merchants to round cash transaction prices or change due to the nearest 5-cent increment, with specific rounding rules for amounts ending in certain cents.
It applies to in-person, phone, mail, and Internet transactions paid with cash, but not to exact-change payments.
The bill preempts conflicting local rules and lets the Secretary of Labor issue regulations.
It also excludes up to 2 cents collected through rounding from the State sales and use tax “taxable price.”
Fiscal impact is expected to be minimal for the State, local governments, and small businesses.

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.