HB545 • 2026

Legal tender; authorizing the rounding of in-person cash transactions to the nearest five cents

Education Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Crow
Last action: 2026-04-17
Official status: Enacted
Effective date: 2026-04-16

Plain English Breakdown

The source text specifies that if a transaction uses both cash and another form of payment, rounding applies only to the portion paid with cash.

Rounding Cash Transactions to the Nearest Five Cents

This law allows businesses in Alabama to round in-person cash payments up or down to the nearest five cents, but it does not change sale prices and excludes government transactions.

What This Bill Does

Allows rounding of in-person cash transactions to the nearest five cents using specific rules based on the final digit of the amount.
States that rounding changes only the payment or change given, not the actual sale price, tax collected, or fees.
Excludes all non-cash payments like credit cards, checks, gift cards, money orders, and electronic transfers from this rule.
Prohibits rounding for any transaction where payment is made to a state or local government agency.
Requires the Department of Revenue to post a notice on its website about this new authority.

Who It Names or Affects

Businesses that accept in-person cash payments
Customers who pay with physical cash for goods and services
The Alabama Department of Revenue

Terms To Know

In-person cash transaction: A purchase where the buyer pays using physical money while present at the location.
Governmental entity: Any state or local agency, department, office, or instrumentality located in Alabama.

Limits and Unknowns

The law does not apply to payments made with credit cards, checks, gift cards, money orders, electronic transfers, or any non-cash method.
Rounding is strictly forbidden for transactions where payment goes directly to a state or local government agency.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

MS3I61H-1

R 1018

Adopted

Plain English: This amendment allows businesses in Alabama to round the total cost of cash-only purchases up or down to the nearest five cents using a specific set of rules.

Cash transactions ending in 1 or 2 are rounded down, while those ending in 3 or 4 are rounded up to end in 5.
Transactions ending in 6 or 7 are rounded down to 5, and those ending in 8 or 9 are rounded up to the next whole dollar amount (ending in 0).
The rounding rule only applies when paying with cash; it does not change prices for credit cards, checks, gift cards, or other non-cash payment methods.
Businesses cannot use this rounding method if they are selling items directly to state or local government agencies.

The amendment states that the official sales price and tax amounts do not change; only the final cash amount paid is adjusted.
This law will take effect immediately after being passed, but businesses must wait for a notice on the Department of Revenue website before starting to round transactions.

PSDNNRG-1

R 1178 • Hovey

Adopted

Plain English: This amendment requires stores that round cash transactions up by five cents to send that extra money to a school fund, while letting them keep the savings from rounding down.

Stores must put any extra money collected from rounding prices up into the Education Trust Fund once every month.
When a store rounds a price down and collects less cash than the exact amount, that difference counts as a tax credit for the business.

The text does not explain how stores should calculate or report these amounts to the state government.
It is unclear if this rule applies to all types of businesses or only specific ones selling goods in person.

Bill History

2026-04-17 House
Enacted
2026-04-07 Senate
Motion to Read a Third Time and Pass - Adopted Roll Call 1179 (Yeas 31, Nays 1)
2026-04-07 Senate
Hovey motion to Table - Adopted Roll Call 1178 (Yeas 25, Nays 8)
2026-04-07 Senate
Third Reading in Second House (Yeas 31, Nays 0)
2026-04-07 House
Delivered to Governor
2026-04-07 Senate
Signature Requested
2026-04-07 House
Enrolled
2026-04-07 House
Ready to Enroll
2026-04-07 Senate
Figures 1st Amendment Offered
2026-04-01 Senate
Read for the Second Time and placed on the Calendar
2026-04-01 Senate
Reported Out of Committee Second House
2026-03-31 Senate
Pending Committee Action in Second House
2026-03-31 Senate
Read for the first time and referred to the Senate Committee on Banking and Insurance
2026-03-19 House
Motion to Read a Third Time and Pass as Amended - Adopted Roll Call 1019 (Yeas 100, Nays 1)
2026-03-19 House
Motion to Adopt - Adopted Roll Call 1018 (Yeas 101, Nays 1)
2026-03-19 House
Third Reading in House of Origin (Yeas 101, Nays 1)
2026-03-19 House
Engrossed
2026-03-19 House
Financial Services Engrossed Substitute Offered
2026-03-10 House
Read for the Second Time and placed on the Calendar
2026-03-10 House
Reported Out of Committee House of Origin
2026-03-03 House
Pending Committee Action in House of Origin
2026-03-03 House
Read for the first time and referred to the House Committee on Financial Services

Official Summary Text

This act: (1) authorizes the rounding of in-person, cash transactions to the nearest five cents, except payment to state or local governmental entities; (2) provides that rounding a transaction does not affect the sale price or sales tax collected; and (3) authorizes rounding to be applied to the amount of the transaction or the amount of change tendered to customers.

Current Bill Text

Read the full stored bill text

HB545 ENROLLED
Page 0
HB545
MS3I61H-3
By Representatives Crow, Whitt, Crawford, Paramore, Lomax,
DuBose, Nelson, Allbright, Rigsby, Brown, Sorrells
RFD: Financial Services
First Read: 03-Mar-26
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HB545 Enrolled
Page 1
First Read: 03-Mar-26
Enrolled, An Act,
Related to legal tender; to authorize the rounding of
the total amount of any in-person cash transaction to the
nearest five cents.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) The amount of an in-person cash
transaction may be rounded to the nearest five cents using the
following methodology:
(1) If the final digit of the amount in the transaction
is one or two, the final digit must be rounded down to zero.
(2) If the final digit is three or four, the final
digit must be rounded up to five.
(3) If the final digit is six or seven, the final digit
must be rounded down to five.
(4) If the final digit is eight or nine, the final
digit must be rounded up to zero.
(5) If the final digit is five or zero, the final digit
must not be rounded.
(b) Subsection (a) does not alter the sales price, the
amount of tax collected under Section 40-23-26, Code of
Alabama 1975, or any other authority providing for the
collection of sales tax, or any surcharges, assessments, or
fees imposed on the sale.
(c)(1) Subsection (a) may apply to the amount of the
transaction or to the amount of change tendered to the
purchaser.
(2) Subsection (a) shall not apply to any transaction
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HB545 Enrolled
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(2) Subsection (a) shall not apply to any transaction
for which payment is made by a method other than cash,
including electronic funds transfer, check, gift card, money
order, or credit card. If the transaction is made using both
cash and another form of payment, subsection (a) shall apply
to the portion of the transaction amount that is paid for
using cash.
(3) Subsection (a) shall not alter or affect any
payment amount authorized, cleared, or settled through any
payment system that does not use cash.
(4) Subsection (a) shall not apply to any transaction
where payment is made to a governmental entity. For purposes
of this subdivision, "governmental entity" means any state or
local agency or instrumentality thereof located in the state.
(d) The Department of Revenue shall post a notice on
the department's website stating the authorization to begin
rounding transactions pursuant to this section.
Section 2. This act shall become effective immediately.
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HB545 Enrolled
Page 3
Section 2. This act shall become effective immediately.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 19-Mar-26.
John Treadwell
Clerk
Senate 07-Apr-26 Amended and Passed
House Concurred in Senate
Amendment
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