The House concurred in the Senate amendments to the bill addressing the elimination of the penny.

HB 2334 allows rounding of cash transactions to the nearest 5 cents when exact change is not available and clarifies how taxes are applied. The bill is now awaiting signature by the Governor.

Tax guidance released on elimination of penny as related bill advances

March 6, 2026

The bill preparing for the elimination of the penny passed the Senate before the cutoff with some amendments. It now needs to go back to the House for agreement.

The Senate version of HB 2334:

• Makes rounding for cash transactions permissive;
• Clarifies that state and local taxes are calculated and due on the original amount before rounding;
• Clarifies that cash amounts must be credited first in hybrid transactions; and
• Makes state and local provisions that are inconsistent with the rounding authority, such as local regulations prohibiting differences in pricing for cash and credit transactions, unenforceable for transactions in compliance with the rounding authority.

Until changes take effect, the Department of Revenue has released interim guidance regarding the elimination of the penny for businesses that must round cash transactions due to the shortage of pennies now that the U.S. Department of the Treasury has stopping minting them.

Legislation to prepare for the elimination of the penny passes House

February 20, 2026

A bill preparing for the elimination of the penny by rounding cash transactions to the nearest 5 cents passed the House before the floor cutoff.

HB 2334 passed out of the House on February 12, was heard in the Senate Business, Trade, & Economic Development Committee on February 18, and is now scheduled for a committee vote. The current version of the bill makes rounding for cash transactions permissive and clarifies that taxes are calculated and due on the original amount before rounding. The bill also preempts state and local provisions that are inconsistent with the rounding authority, such as local regulations prohibiting differences in pricing for cash and credit transactions.

The Senate companion SB 6230 did not pass before the cutoff.

Date to remember

HB 2334 is scheduled for executive session in the Senate Business, Trade, & Economic Development Committee on Wednesday, February 25, at 8 am.

Legislation to prepare for the elimination of the penny keeps moving

February 6, 2026

Two bills rounding cash transactions to the nearest five cents had hearings in fiscal committees and continue to move through the process.

SB 6230 detoured to the Senate Transportation Committee on February 5 for discussions around implications for cash transactions for gas and potential impacts to gas tax calculations. It is scheduled to be voted out of the committee on February 9.

HB 2334 passed out of the House Finance Committee on February 6 with amendments that make the rounding for cash transactions permissive and preempt state and local provisions that are inconsistent with the rounding authority. The amended bill also clarifies that taxes are calculated and due on the original amount before rounding.

Dates to remember

SB 6230 is scheduled for executive session in the Senate Transportation Committee on Monday, February 9, at 4 pm.

State preparing for the elimination of the penny

January 26, 2026

Legislation rounding cash transactions to the nearest 5 cents has been introduced to address the elimination of the penny. The U.S. Department of the Treasury announced that it will stop minting the penny in early 2026.

The sales and use tax is currently required to be rounded to the nearest penny for cash transactions. HB 2334, sponsored by Rep. April Berg (D–Mill Creek), and SB 6230, sponsored by Sen. Noel Frame (D–Seattle), give retailers the ability to round cash transactions to the nearest 5 cents. Electronic and card payments would not be impacted and would still be rounded to the nearest penny.

HB 2334 was heard in the House Finance Committee on January 22.

AWC would be interested in hearing from cities if they think there would be any barriers in financial systems for cash transactions that would make these updated calculations difficult or if there are other taxes for which the state needs to provide this flexibility for cash transactions in cities.

Dates to remember

SB 6230 is scheduled for a public hearing in the Senate Business, Trade, & Economic Development Committee on Wednesday, January 28, at 8 am.