California Enacted Cash Rounding Legislation
Governor Gavin Newsom signed the California Common Cents Act to mandate rounding for cash transactions.
Updated on Oct. 1, 2026 in Retail
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California Governor Gavin Newsom has signed AB 1793, a new law that mandates retail rounding for cash payments to the nearest nickel. The legislation addresses lingering penny shortages following the cessation of US Mint production.
Why it matters
The measure provides a standardized approach for merchants to handle cash payments after the federal government halted the minting of pennies. It clarifies retail accounting practices in a post-penny landscape.
The California Common Cents Act establishes a 5-cent rounding increment for all cash-based retail transactions. Payments ending in 1, 2, 6, or 7 cents round down, while those ending in 3, 4, 8, or 9 cents round up.
The players
Gavin Newsom
He is the Governor of California who signed the legislation establishing new cash rounding requirements.
The details
Under AB 1793, merchants are required to round the final total of cash transactions to the nearest nickel. This law specifically targets retail transactions to accommodate the lack of one-cent coins in circulation.
Timeline
The US Mint officially stopped producing pennies in November 2025.
Governor Newsom signed the California Common Cents Act on September 30, 2026.
Market Landscape
This legislation aligns California with other jurisdictions that have modernized their currency handling due to the obsolescence of low-denomination coins. It represents a significant shift in retail operational standards for the state's economy.
Consumers in California should expect their final cash totals to be adjusted to the nearest nickel at checkout. Shoppers may see slight variations in their total cash payments depending on whether the final digit rounds up or down.
The takeaway
This change simplifies cash handling by eliminating the need for pennies in daily retail exchanges. Residents should become familiar with the new rounding rules to better anticipate their final costs during cash transactions.
Further reading
For more information on the evolving retail environment, visit our Retail section.
Source note: This article includes information reported by Bloombergtax.
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