Indiana Just Changed What Happens To Your Change At Stores

A new Indiana law is preparing businesses for the nationwide phaseout of the penny and the changes it will bring to cash transactions.

Governor Mike Braun recently signed Senate Bill 243, which took effect immediately. While the legislation covers a wide range of tax-related changes, one section specifically addresses how retailers should handle transactions as pennies disappear from circulation.

Indiana Law Explains How Cash Purchases Will Be Rounded

The law allows retailers to round cash transaction totals to the nearest nickel or dime when pennies are no longer available.

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According to guidance shared by the Indiana Department of Revenue, several rules apply:

• Rounding applies only to cash transactions
• Rounding must occur on the total price, including sales tax
• Retailers may round up or down to the nearest nickel
• Any gain or loss from rounding becomes part of the retailer’s income
• Sales tax must still be paid in full, regardless of rounding

The Bill Also Includes Several Other Tax Changes

While the penny-rounding provision is drawing the most attention from consumers, Senate Bill 243 also makes numerous updates to Indiana tax laws.

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The legislation includes changes related to gambling withholding rules, ABLE account tax credits, electronic communications with the Indiana Department of Revenue, enforcement rules involving vehicle and aircraft sales taxes, and several updates to excise tax programs.

You can read the full text of Senate Bill 243 for yourself here.