Alabama penny rounding law
Optional symmetric rounding of in-person cash transactions to the nearest 5¢. Payments to government excluded.
Alabama cash rounding calculator
Enter a cash total, or item prices plus your sales tax rate. The result updates as you type.
The rounding rule
An in-person cash transaction may be rounded to the nearest five cents: amounts ending in 1 or 2 cents round down to 0, 3 or 4 up to 5, 6 or 7 down to 5, and 8 or 9 up to the next 10. Amounts ending in 0 or 5 are not rounded. The merchant can apply the rounding to the transaction total or to the change it hands back.
Who it applies to
Any in-person cash transaction between private parties. The law does not require pennies to be unavailable first.
Customer notice
No customer sign is required by the statute. (The Department of Revenue was directed to post a notice on its own website, which it did.)
Make a printable Alabama cash rounding sign.
Sales tax
Rounding does not change the sales price, the sales tax due under Ala. Code § 40-23-26, or any surcharge or fee. Collect and remit tax on the unrounded price. More on sales tax and cash rounding.
What is not rounded
- Payments by electronic funds transfer, check, gift card, money order or credit card are not rounded.
- Mixed tender: only the cash portion is rounded.
- Payments to any state or local government agency are excluded: pay those to the exact cent.
Pennies, enforcement and safe harbors
The act does not say whether merchants must accept pennies or require a customer to accept rounding.
No penalty or enforcement provision.
The law
| Law | HB 545, Act 2026-548 |
|---|---|
| Signed | April 2026 |
| Effective | April 17, 2026 (effective immediately on signing; the Alabama Department of Revenue gives April 17, 2026) |
| Status | Law in effect |