Rounding is for cash transactions only after the federal phaseout of the penny.
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INDIANAPOLIS – A new Indiana law covers the federal phaseout of the penny and the resulting penny shortage, providing Hoosier retailers with procedures for rounding cash transactions.
- Rounding is for cash transactions only.
- Rounding must take place on the total price including tax.
- Retailers can choose either to round up or down to the next nickel.
- Note: Any gain or loss from the rounding is added to or taken away from the retailer’s income.
- Taxes must be paid in full to the State.
Example: If the total price plus tax is $6.42, the retailer has the option to round up to $6.45 or down to $6.40 in a cash transaction. The 3-cent gain or 2-cent loss would be added to or taken away from the retailer’s income, respectively.
However, the tax of 42 cents is remitted to the State regardless of rounding…