Florida businesses that accept cash now operate under a mandatory rounding formula for in-person cash transactions, following the enactment of Senate Bill 1074 and the Florida Department of Revenue’s issuance of Tax Information Publication 26A01-03 on June 10, 2026. The TIP formally replaces TIP 25A01-18, issued just six months earlier, and reflects the practical reality that the United States Treasury ceased producing the penny in November 2025. It establishes a uniform, statute-based method for rounding cash totals to the nearest nickel.

For tax practitioners advising retail, restaurant, hospitality, and service clients, this shift moves Florida from a discretionary rounding practice to a fixed statutory formula, with direct implications for point-of-sale systems, signage, sales tax calculation workflows, and audit defense.

From Discretionary Guidance to Statutory Mandate

When the Treasury halted penny production in late 2025, the Department of Revenue responded with TIP 25A01-18, issued December 19, 2025. That earlier guidance was permissive rather than prescriptive. Dealers facing a literal shortage of pennies were permitted to round the total amount due on a cash transaction to the next lowest, next highest, or nearest nickel, provided the dealer disclosed its chosen method through signage. The dealer had discretion over which of the three rounding conventions to apply, so long as the customer was on notice.

Governor Ron DeSantis signed Senate Bill 1074 on May 11, 2026, codifying a single, mandatory rounding methodology into Section 212.12(10)(c), Florida Statutes, through Chapter 2026-68, Laws of Florida. TIP 26A01-03 implements that statute and supersedes the discretionary framework of TIP 25A01-18. Businesses no longer choose among rounding conventions. The statute dictates the result based on the final digit of the transaction total.

The Required Rounding Formula

Under the new rule, in-person cash transactions may be rounded to the nearest nickel using the following formula, applied only after the combined state sales tax and any applicable discretionary sales surtax has been calculated under existing law.

If the final cent digit of the total, meaning the sales price plus sales tax, is 1 or 2, the total rounds down, dropping the cents to zero.

If the final digit is 3 or 4, the total rounds up to end in five cents.

If the final digit is 6 or 7, the total rounds down to end in five cents.

If the final digit is 8 or 9, the total rounds up to the next ten-cent increment.

If the final digit is already 0 or 5, no rounding occurs.

The rounding step is the last action in the transaction, not a substitute for proper tax computation. The Department’s guidance is explicit that the combined sales tax and surtax must still be calculated pursuant to current law before the rounding formula is applied to the final total.

What Rounding Does Not Change

Practitioners should flag two limitations for clients. First, the rounding mechanism applies exclusively to in-person cash transactions. It does not extend to electronic funds transfers, checks, gift cards, money orders, credit cards, or mixed-tender transactions, except to the extent that a portion of a mixed-tender sale is actually disbursed to the purchaser in cash. A client running a hybrid payment environment, common in restaurants and retail, needs point-of-sale logic that isolates the cash-tendered portion of a transaction before applying the rounding rule.

Second, and most important for audit purposes, rounding does not alter the sales price, the sales tax, the surtax, or any other surcharge, assessment, or fee imposed on the sale. Sales tax remains due on the actual, unrounded sales price. The rounding adjustment affects only the cash collected or change disbursed at the register. It has no bearing on the dealer’s tax base or remittance obligation.

The TIP’s two worked examples illustrate this distinction. A nine dollar and eighty-four cent item sold with a combined seven percent tax produces a total of ten dollars and fifty-three cents, which rounds up to ten dollars and fifty-five cents at the register. The dealer’s sales tax liability remains the actual sixty-nine cents computed on the underlying sales price. Likewise, a seven dollar and fifty-five cent item taxed at seven and a half percent produces a total of eight dollars and twelve cents, rounded down to eight dollars and ten cents, with the dealer’s remittance obligation unchanged at fifty-seven cents. In both cases, the rounding is a point-of-sale cash-handling adjustment, not a tax recalculation.

Compliance Considerations for Practitioners

For lawyers and CPAs advising businesses on Florida sales tax compliance, several action items follow directly from TIP 26A01-03.

Point-of-sale and accounting systems should be updated to apply the statutory rounding formula automatically to cash transactions, while continuing to record the unrounded sales price and tax for general ledger and DR-15 reporting purposes.

Clients still operating under the discretionary rounding signage required by the now-superseded TIP 25A01-18 should update their disclosures, since the new rule no longer permits dealer discretion over which rounding convention to apply.

Businesses under audit, or anticipating one, should be prepared to demonstrate that any cash-register rounding differences reconcile against the actual sales price and tax due, since auditors will look to the underlying transaction record rather than the rounded cash total.

Multi-location or franchise operators should confirm that point-of-sale vendors have updated their systems to reflect the statutory formula in Section 212.12(10)(c), Florida Statutes, rather than relying on a generic round-to-nickel setting that may not match the digit-specific formula the Department has prescribed.

As the Department itself acknowledged in its earlier guidance, the transition away from the penny is an evolving issue at both the federal and state level. Practitioners should treat TIP 26A01-03 as the current, controlling guidance until the Department issues further notice.