Florida Sales Tax Rounding After the Penny: What TIP 25A01-18 Means for Dealers in 2026

Florida Sales Tax After the Penny: How TIP 25A01-18 Changes Cash Transactions in 2026

As the U.S. Treasury has officially ended production of pennies, a new compliance issue has quietly emerged for Florida businesses that accept cash: how to handle sales tax when exact change is no longer possible. In response, the Florida Department of Revenue issued Tax Information Publication (TIP) 25A01-18 on December 19, 2025, clarifying how dealers may round cash transaction totals without altering the underlying sales tax calculation.

Why This Guidance Matters

Pennies remain legal tender, but their disappearance from circulation has created real-world problems at the point of sale. Dealers increasingly face situations where they cannot provide exact change for taxable purchases. Without guidance, inconsistent rounding practices could lead to under-collection, over-collection, or audit exposure.

TIP 25A01-18 addresses this gap by allowing limited rounding flexibility for cash payments—while preserving Florida’s requirement that sales tax be calculated exactly on the taxable sales price.

Sales Tax Must Still Be Calculated Exactly

The most important rule in TIP 25A01-18 is what does not change. Dealers must continue to calculate Florida sales tax and any applicable discretionary surtax on the full, exact sales price. The rounding guidance applies only to the final cash amount paid by the customer.

In other words, penny scarcity does not change the tax base, the tax rate, or the amount of tax owed to the state. Dealers must remit the full tax due, even if the amount collected from the customer is rounded for cash convenience.

Permitted Rounding Methods for Cash Transactions

When a customer pays with cash and exact change cannot be made because pennies are unavailable, TIP 25A01-18 allows dealers to round the total amount due (sales price plus tax):

• down to the next lowest nickel,
• up to the next highest nickel, or
• to the nearest nickel.

The chosen rounding method must be applied consistently and clearly disclosed to customers.

Rounding Examples

Example – Rounding Down:
A taxable item sells for $9.84. At a combined state and local tax rate of 7%, the total amount due is $10.53. If pennies are unavailable, the dealer may round the cash total down to $10.50. The sales tax due remains $0.69 and must be remitted in full.

Example – Rounding Up:
Using the same transaction, the dealer may instead round the cash total up to $10.55. Again, the sales tax due remains $0.69, calculated on the original sales price.

Disclosure and Signage Requirements

The Department requires dealers to clearly and conspicuously disclose their rounding policy. This disclosure should be visible at the point of sale so customers understand how cash totals are handled.

From a compliance standpoint, this disclosure is critical. It provides transparency to customers and creates documentation that can be helpful during audits or disputes.

System and Recordkeeping Considerations

Rounding cash transactions introduces practical challenges beyond the cash drawer.

Point-of-sale systems should distinguish between cash and non-cash transactions, ensuring that tax reports reflect the exact tax calculated—not the rounded amount collected. Receipts should ideally show the unrounded sales price, the calculated tax, and the rounded cash total.

Failure to properly configure systems or document rounding practices can lead to reconciliation issues and audit risk.

Common Pitfalls to Avoid

• Applying rounding to credit or debit card transactions.
• Adjusting the tax calculation itself rather than only the final cash total.
• Using inconsistent rounding methods without a documented policy.
• Failing to post clear signage explaining the rounding practice.

Looking Ahead

TIP 25A01-18 reflects the Department’s current interpretation of Florida law in response to a changing monetary environment. As penny circulation continues to decline, further guidance or legislative changes may follow. For now, dealers should ensure that rounding practices are limited, transparent, and carefully documented.

Final Takeaways

• Sales tax must always be calculated on the full sales price.
• Rounding applies only to the final cash amount paid.
• Dealers may round up, down, or to the nearest nickel.
• Clear disclosure and consistent application are essential.

Handled correctly, cash rounding under TIP 25A01-18 can simplify transactions without creating unintended tax exposure.