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Massachusetts businesses may round final cash totals to the nearest five cents as pennies become harder to find, but state officials say sales tax still has to be calculated on the exact purchase price.
The Department of Revenue and Division of Standards issued guidance May 5 after the U.S. Treasury stopped minting pennies on November 12, 2025. Pennies remain legal currency and can still be used in cash transactions.
Sales Tax Comes First
Under the Department of Revenue guidance, sales tax must be calculated before any rounding is applied. Rounding may be used only on the final cash total, not on individual item prices, and displayed prices must match the prices charged at checkout.
“We know the rounding required by the discontinuation of the penny has created questions about how to calculate and collect sales tax,” said Commissioner of Revenue Geoffrey Snyder. “Our hope is that this guidance provides the clarity businesses need to ensure they remain compliant with the laws.”
Rules for Cash Rounding
The Division of Standards said rounding is permitted under Massachusetts law if it is applied to the total transaction. Businesses that choose to round should clearly post their policy at entrances and points of sale, including in multiple languages where appropriate.
Before completing a rounded transaction, DOS also recommends that businesses offer customers another payment option, such as a card payment or exact change.
“The Division of Standards received several questions about how this federal policy will impact Massachusetts businesses,” said Commissioner of Standards Dave Rodrigues. “We developed this guidance to provide clarity on how state law applies, with a focus on both our business community and consumer protection.”
Where to Read the Guidance
The Department of Revenue guidance is available at mass.gov. The Division of Standards bulletin is also available through mass.gov.
Source: Massachusetts Executive Office for Administration and Finance media release, May 5, 2026. Featured image supplied by Greylock Glass.








