NEW JERSEY — New Jersey consumer and tax officials are advising businesses on how to handle cash transactions as a shortage of pennies continues following the federal government’s decision to stop minting the one-cent coin in 2025.
The New Jersey Division of Consumer Affairs said businesses may choose to round cash transactions up or down to the nearest nickel when exact change is not available, but such a policy is not required. Any rounding policy must be clearly and conspicuously disclosed before a consumer incurs a charge, the division said.
The guidance applies only to cash payments and not to transactions made using credit cards, debit cards or other electronic payment methods.
State officials said rounding should be applied only to the final total of a transaction after all applicable taxes and fees have been added. For tax purposes, businesses must still calculate and remit New Jersey sales tax based on the exact purchase price, regardless of whether the final amount paid in cash is rounded.
For example, if a taxable item costs $39.99, sales tax must be calculated and paid to the state based on $39.99, even if the final cash total is rounded up or down, officials said.
The state also reminded businesses that for Corporation Business Tax and Gross Income Tax purposes, gross receipts and income must be determined using exact accounting. Any amount gained by rounding up a transaction is considered additional income, while rounding down reduces the reported gross receipt or total income.
Businesses with questions about their tax obligations related to cash rounding were advised to contact the Division of Taxation at 609-292-6400.
The Division of Consumer Affairs said businesses that choose to implement a rounding policy should follow the Consumer and Business Advisory issued by the agency to ensure compliance with state law.
