If you're a retailer in North Carolina, you've probably noticed pennies becoming harder to find. Following the U.S. Mint’s announcement in November 2025 that it has stopped producing pennies for circulation, the North Carolina Department of Revenue (NCDOR) has issued guidance on how this change affects sales tax calculations and cash-rounding practices.
The Bottom Line
Rounding cash transactions does not change the sales tax you owe. Whether you round up or down to the nearest nickel, your sales tax liability remains the same.
What North Carolina Retailers Need to Know
The NCDOR has observed two common cash-rounding methods currently being used by retailers:
- Symmetrical rounding – rounding up or down to the nearest five cents
- Rounding down – always rounding down to the nearest five cents
Both methods are acceptable under current guidance, and neither affects the amount of sales tax due.
How Cash Rounding Works in Practice
Here’s a simple example: A customer purchases a $25 meal in Johnston County. Sales tax is calculated at 6.75%, resulting in $1.69 of tax. The total sale comes to $26.69.
If the customer pays cash and the total is rounded up to $26.70, the sales tax owed is still $1.69 — not a penny more.
The same holds true if the total is rounded down. The few-cent difference is strictly a cash-handling adjustment, not a change to the taxable sale.
Important Reminders for NC Sales Tax Compliance
- Cash transactions only: Credit cards, debit cards, checks, and electronic payments are not affected by rounding.
- Document your process: North Carolina law requires retailers to document rounding methods in their point-of-sale systems and accounting records.
- Tax calculation rules remain unchanged: Sales tax must still be calculated to the third decimal place and rounded to the nearest cent before any cash-rounding adjustment is applied.
What This Means for Your Business
This guidance confirms what many North Carolina retailers hoped: you can adapt to the penny phase-out without added sales tax complexity. As long as your systems properly track rounding adjustments, you can remain compliant while simplifying cash transactions.
For full details, see Sales and Use Tax Directive SD-26-1 on the North Carolina Department of Revenue website.
Changes like the penny phase-out are a good reminder that small operational shifts can have broader accounting and compliance implications. As part of our advisory services, we help businesses stay ahead of regulatory changes and ensure their systems, processes, and reporting stay aligned. If you want a proactive review that fits into your overall tax or accounting strategy, we’re happy to help.
