Senate Bill Report SHB 2334 — Adjusting the price of a cash transaction to eliminate the need for pennies

Summary

This is the Senate Bill Report on SHB 2334, as of February 16, 2026, for the Senate Committee on Business, Trade & Economic Development. The title is an act relating to adjusting the price of a cash transaction to eliminate the need for pennies, and the report states the bill passed the House on 2/12/26, 89-6. The brief summary says the bill authorizes sellers to round the total price of an in-person cash transaction to the nearest $0.05 increment and specifies the application of taxes and preemption over local laws. The background says the U.S. Treasury announced in 2025 that it would cease manufacturing new pennies.

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SENATE BILL REPORT
SHB 2334

As of February 16, 2026

Title: An act relating to adjusting the price of a cash transaction to eliminate the need for
pennies.

Brief Description: Adjusting the price of a cash transaction to eliminate the need for pennies.

Sponsors: House Committee on Finance (originally sponsored by Representatives Berg, Street,
Parshley, Ryu, Ramel, Reed, Fitzgibbon, Zahn, Wylie, Morgan, Thomas, Ormsby, Stearns,
Macri, Hill and Thai).

Brief History: Passed House: 2/12/26, 89-6.
Committee Activity: Business, Trade & Economic Development: 2/18/26.

Brief Summary of Bill
• Authorizes sellers to round the total price of an in-person cash
transaction to the nearest $0.05 increment.
• Specifies the application of taxes and preemption over local laws.

SENATE COMMITTEE ON BUSINESS, TRADE & ECONOMIC DEVELOPMENT

Staff: John Kim (786-7453)

Background: In 2025, the United States Department of the Treasury (U.S. Treasury)
announced it would cease manufacturing new pennies and that the Federal Reserve will
continue to recirculate the approximately 114 billion pennies currently in existence, but how
long existing pennies will remain in circulation would depend largely on consumer
behavior.

The U.S. Treasury advised that retailers should continue accepting pennies and providing
penny change for cash transactions while the coin remains in circulation. When penny

This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.

Senate Bill Report -1- SHB 2334
change is not available, businesses may round the final amount of a cash transaction to the
nearest $0.05 increment. The U.S. Treasury stated how states and localities will ultimately
amend their sales tax laws is the right and responsibility of those jurisdictions.

Summary of Bill: Permissible Rounding. The total price of any in-person cash transaction
may be rounded to the nearest $0.05 increment as follows:
• if the final digit of a cash transaction ends in $0.01, $0.02, $0.06, or $0.07, the final
digit may be rounded down to the nearest amount divisible by $0.05.
• if the final digit of a cash transaction ends in $0.03, $0.04, $0.08, or $0.09, the final
digit may be rounded up to the nearest amount divisible by $0.05.
• if the final digit of a cash transaction ends in $0.00 or $0.05, the final digit may not be
rounded up or down.

For example, for cash transactions with a total price ranging from $1.00 to $1.10:

Total price Rounded price to nearest $0.05
$1.00 $1.00 (not rounded)

$1.01 $1.00

$1.02 $1.00

$1.03 $1.05

$1.04 $1.05

$1.05 $1.05 (not rounded)

$1.06 $1.05

$1.07 $1.05

$1.08 $1.10

$1.09 $1.10

$1.10 $1.10 (not rounded)

The following apply to rounding:
• it applies only to in-person payments made by legal tender and does not apply to
payments made by demand or negotiable instrument, electronic funds transfer, money
order, credit card, debit card, electronic payment, or other like instrument;
• for mixed-tender transactions, any amount paid by a customer in cash must first be
applied to the sales price of the goods or services, and any remaining balance may be

Senate Bill Report -2- SHB 2334
paid through electronic or noncash methods, such that rounding is not applied to any
portion of the transaction paid by noncash methods; and
• when pennies are not available, state and local agencies may apply the above
rounding if any tax, fee, or similar charge included in or applicable to the transaction
is remitted to the state on the pre-rounded amount.

Sales and Use Tax Calculation and Remittance. Any person selling goods or services must
calculate and remit all taxes and fees imposed by state or municipal taxing authorities based
on the sales price before any transaction rounding.

Rounding applies solely to the payment amount tendered and does not alter the sales price,
the amount of tax owed or collected, or any surcharges, assessments, or applicable fees
imposed on the sale.

Sales and use tax must be calculated on the selling price of goods, services, or other
products subject to sales tax without regard to any rounding.

Business and Occupation Tax Not Applicable. Business and occupation tax does not apply
to amounts received from rounding-up adjustments and no deduction is allowed for
rounding-down adjustments.

Preemption. The act preempts and supersedes any ordinance, regulation, or rule adopted by
a local government that prohibits, restricts, penalizes, or otherwise regulates any seller's or
government's ability to round cash transactions as authorized by the act.

A local government may not enforce any law that treats lawful rounding under this section
as a surcharge, penalty, or unlawful price differential based on the method of payment.

Immunity. The rounding of a total price in accordance with the act that creates an
inconsistency with any displayed or advertised price is not actionable under the Consumer
Protection Act.

Rounding in compliance with the act by any person selling goods or services does not
constitute a violation of any state or municipal requirements, laws, regulations, or standards.

Definitions. The following are defined:
• legal tender means all coins and currencies of the United States;
• total price means the final amount due and payable by the buyer for the purchase of
any good, service, or other product, or combination thereof, after all applicable taxes
and fees are applied, as well as any discounts or other adjustments that are made by
the seller; and
• transaction means the entire purchase by a buyer from a seller for all goods, services,
and other products, at that date and time as is shown on an invoice or receipt. A
transaction may include one item or multiple items.

Senate Bill Report -3- SHB 2334
Tax Preference Requirements Not Applicable. Requirements for tax preferences do not
apply to the act.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Senate Bill Report -4- SHB 2334

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