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SB365 • 2026

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

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

Taxes
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Hovey
Last action
2026-04-07
Official status
Indefinitely Postponed in House of Origin
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Rounding Cash Transactions

This bill allows businesses to round cash payments for in-person transactions to the nearest five cents.

What This Bill Does

  • Allows rounding of cash transaction amounts to the nearest five cents.
  • Specifies rules for rounding: down if ending in 1 or 2, up if ending in 3 or 4, and so on.
  • Does not change sales prices or tax amounts collected.
  • Applies only to transactions paid entirely in cash, excluding other payment methods like credit cards.
  • Requires the Department of Revenue to post a notice about rounding rules.

Who It Names or Affects

  • Businesses that accept cash payments for goods and services.
  • Customers who pay with cash for in-person purchases.

Terms To Know

Legal tender
Money that is officially accepted as payment for debts or taxes by a government.
Sales tax
A tax added to the price of goods and services, collected by sellers from buyers.

Limits and Unknowns

  • The bill's status is currently indefinitely postponed as of April 7, 2026.
  • It does not specify when the rounding rules will be effective or enforced.

Bill History

  1. 2026-04-07 Senate

    Currently Indefinitely Postponed

  2. 2026-03-19 Senate

    Read for the Second Time and placed on the Calendar

  3. 2026-03-19 Senate

    Reported Out of Committee House of Origin

  4. 2026-03-11 Senate

    Pending Committee Action in House of Origin

  5. 2026-03-11 Senate

    Read for the first time and referred to the Senate Committee on Banking and Insurance

Official Summary Text

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

Current Bill Text

Read the full stored bill text 
SB365 INTRODUCED
Page 0
SB365
84B6922-1
By Senator Hovey
RFD: Banking and Insurance
First Read: 11-Mar-26
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84B6922-1 03/10/2026 JWB (L)JWB 2026-1286
Page 1
First Read: 11-Mar-26
SYNOPSIS:
This bill would authorize the rounding of the
total amount of any in-person cash transaction to the
nearest five cents.
A BILL
TO BE ENTITLED
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.
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SB365 INTRODUCED
Page 2
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
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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