On March 12, 2026, we published a blog post discussing the implications of the U.S. Mint ceasing penny production and the various legal and tax implications for multistate businesses. As discussed, each state has legislative discretion on how to address these issues.
Virginia recently passed legislation [H.B. 954, enacted 04/13/26] on rounding procedures in cash transactions. This new law is effective July 1, 2026 and permits sellers to round cash transactions to the nearest five cents in response to the U.S. Mint’s cessation of penny production.
The law amends the Virginia Code to establish a framework for handling cash transactions when pennies may no longer be available, while making clear that the rounding applies only to the cash amount (including any taxes) paid by the customer. Importantly, the law requires all taxes and fees to be calculated and remitted based on the non-rounded transaction amount or stated service fee, helping preserve consistency in tax administration.
The law also protects sellers from regulatory violations when they follow the statute’s rounding procedures. In addition, the law also permits localities to adopt temporary procedures for adjusting tax bills and account balances due to the cessation of penny production. However, these locality procedures must expire no later than July 1, 2027, and the Virginia Department of Taxation must recommend uniform statewide procedures for adjusting tax bills and account balances due to the cessation of penny production by November 1, 2026.
