Indiana penny rounding law

Businesses may round cash totals down, up, or to the nearest 5¢. From 2027, cash payments of state and local taxes and fees round down.

Updated October 30, 2026 · Based on official sources listed below

Optional

Businesses may round cash totals

March 15, 2026

In effect since

Customer sign required by law

Unrounded

Sales tax is figured on the pre-rounding price

Indiana cash rounding calculator

Enter a cash total, or item prices plus your sales tax rate. The result updates as you type.

State

What do you have?

The cash total Item prices + tax rate

Total due, including tax

Transaction

Cash sale Cash refund Card / EBT / check

Rounding methodOnly the methods the state allows are listed.

Cash handed over (optional)

Shows the change due.

Turn on JavaScript to use the calculator. The rule: totals ending in 1, 2, 6 or 7 cents round down to the nearest nickel; 3, 4, 8 or 9 cents round up.

How each ending cent rounds under this rule

…0¢…0¢same
…1¢…0¢−1¢
…2¢…0¢−2¢
…3¢…5¢+2¢
…4¢…5¢+1¢
…5¢…5¢same
…6¢…5¢−1¢
…7¢…5¢−2¢
…8¢…0¢+2¢
…9¢…0¢+1¢

The rounding rule

A business entity may round the total cash transaction amount, including tax, by one of three methods: always down to the nearest five cents, always up to the nearest five cents, or to the nearest five cents (1, 2, 6, 7 down; 3, 4, 8, 9 up). A total under five cents may be rounded to $0.00 or $0.05. Separately, for cash transactions after December 31, 2026, a cash payment of a state or local tax, fine or fee (including interest and penalties) must be rounded down to the next five cents, and amounts under five cents go to $0.00.

Who it applies to

Business entities broadly, including banks, hospitals and health providers, trusts and estates, and state or local units when they sell property or services. The original SEA 243 made business rounding mandatory after December 31, 2026; HEA 1406 changed “must” to “may” and moved the start date to March 15, 2026.

Customer notice

No customer sign is required.

Make a printable Indiana cash rounding sign.

Sales tax

Sales tax is computed on the unrounded amount. Amounts a seller adds or subtracts by rounding are not gross retail income (IC 6-2.5-1-5(f)). The Department of Revenue says taxes must be paid to the state in full. More on sales tax and cash rounding.

What is not rounded

Both chapters apply only to cash transactions. Card and electronic payments are charged the exact amount.

Pennies, enforcement and safe harbors

The law does not address accepting pennies.

No penalty provision.

The law

Law	SEA 243 (P.L. 128-2026) as amended by HEA 1406 (P.L. 162-2026); IC 23-15-13 and IC 5-36.5
Signed	March 5, 2026 (SEA 243); March 12, 2026 (HEA 1406)
Effective	March 15, 2026 (business rounding applies to cash transactions after March 14, 2026; the government-payment rule applies after December 31, 2026)
Status	Law in effect

Checked against the sources below as of October 30, 2026. Compare other states in the state-by-state tracker.

Frequently asked questions

Is cash rounding mandatory in Indiana?

Not for businesses. SEA 243 originally required it, but HEA 1406 (P.L. 162-2026) changed the rule to optional. What is mandatory, from January 1, 2027, is rounding down cash payments of state and local taxes, fines and fees.

Can an Indiana store always round up?

Yes. Indiana is unusual: IC 23-15-13 lets a business choose to round down, round up, or round to the nearest five cents.

Does Indiana's rounding apply to card payments?

No. Both chapters apply only to cash transactions. Card and electronic payments are charged the exact amount. Only cash is rounded.