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SB1108 • 2026

cash transactions; mandatory rounding method

SB1108 - cash transactions; mandatory rounding method

Agriculture Taxes
Passed Legislature

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

Sponsor
John Kavanagh
Last action
2026-03-02
Official status
Senate committee of the whole
Effective date
Not listed

Plain English Breakdown

The official text confirms the law was signed by the Governor on March 12, 2026, and includes an emergency clause making it effective immediately.

SB1108: Rules for Rounding Cash Payments

This emergency measure requires sellers in Arizona to round cash totals to the nearest five cents using a specific method if they do not use one-cent coins.

What This Bill Does

  • Requires sellers without pennies at checkout to round total cash amounts up or down based on the last digit of the price.
  • Applies rounding only after taxes, fees, and other charges are added to the final bill.
  • Exempts all non-cash payments like credit cards, debit cards, electronic transfers, and mobile apps from these rules.
  • Mandates that sellers post a visible sign at checkout stating cash transactions will be rounded by state law.
  • Requires taxes to be calculated on the original price before any rounding takes place.

Who It Names or Affects

  • Sellers who do not have or use one-cent coins for sales
  • Customers making purchases with physical cash
  • The Weights and Measures Services Division of the Arizona Department of Agriculture

Terms To Know

Swedish rounding
A method that rounds prices to the nearest five cents: down for amounts ending in 1 or 2, up for 3 or 4, down for 6 or 7, and up for 8 or 9.
Point of sale
The place where a customer pays for goods or services, such as a checkout counter.

Limits and Unknowns

  • This law only applies to cash transactions and does not change how digital payments are handled.
  • Sellers cannot choose their own rounding method; they must follow the specific rules in this bill or face penalties.
  • The effective date is March 12, 2026.

Amendments

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

Plain English: This amendment adds a rule requiring stores to round cash transactions to the nearest five cents using 'Swedish rounding' if one-cent coins are not used, and makes the law take effect immediately.

  • Stores must use Swedish rounding for cash totals when pennies are unavailable or unused, rounding amounts ending in 1-2 or 6-7 down to the nearest five cents, and amounts ending in 3-4 or 8-9 up.
  • Rounding only applies to the final total of a cash transaction after taxes and fees are added, not to individual item prices or non-cash payments like credit cards.
  • Sellers must post a visible sign at checkout stating that cash transactions are rounded by state law and cannot use any rounding method other than Swedish rounding.
  • The Arizona Department of Agriculture is given the power to enforce this rule with warnings, orders, and civil penalties.
  • The amendment text includes a change to a chapter heading about mask mandates that seems unrelated to cash transactions, which may be an error in the provided document.
  • Some sections of the original bill regarding tax calculations were removed by this amendment, but the full context of those changes is not clear from the summary alone.

Plain English: This amendment creates a new state law requiring businesses to round cash-only transactions to the nearest five cents using specific rules when one-cent coins are not used.

  • Businesses must use 'Swedish rounding' for final cash totals, which rounds amounts ending in 1 or 2 cents down and those ending in 3 or 4 cents up to the nearest nickel.
  • The same rounding rules apply downward for amounts ending in 6 or 7 cents and upward for amounts ending in 8 or 9 cents.
  • Sellers must post a visible sign at checkout stating that cash transactions are rounded by state law, and they cannot use any other rounding method.
  • This rule only applies to the final total of cash payments after taxes; it does not apply to individual item prices or non-cash payment methods like credit cards.
  • The amendment text includes conflicting bracketed instructions that make some sections about tax calculation and legal immunity unclear.
  • It is uncertain if the removed section protecting businesses from other laws will be part of the final version due to editing conflicts in the document.

Plain English: This amendment creates a new state law requiring businesses to round cash transaction totals to the nearest five cents using specific rules when one-cent coins are not used.

  • Businesses must use 'Swedish rounding' for cash payments, which rounds amounts ending in 1 or 2 cents down and those ending in 3 or 4 cents up to the nearest nickel.
  • The same rounding rules apply downward for amounts ending in 6 or 7 cents and upward for amounts ending in 8 or 9 cents.
  • Rounding only happens on the final total after taxes are added, not on individual item prices, and it does not apply to credit card or digital payments.
  • Sellers must post a sign at checkout stating that cash transactions are rounded by state law.
  • The text removes specific instructions about how taxes should be calculated before rounding, which makes the exact tax calculation process unclear in this version of the amendment.
  • Some sections regarding legal protections for sellers and federal coinage laws were renumbered or removed during editing, so their final status is not fully clear from this draft.

Bill History

  1. 2026-03-02 Senate

    Senate committee of the whole

  2. 2026-02-17 Senate

    Senate minority caucus

  3. 2026-02-17 Senate

    Senate majority caucus

  4. 2026-01-20 Senate

    Senate second read

  5. 2026-01-15 Senate

    Senate Rules: PFC

  6. 2026-01-15 Senate

    Senate Regulatory Affairs and Government Efficiency: DPA

  7. 2026-01-15 Senate

    Senate first read

Official Summary Text

SB1108 - 572R - Senate Fact Sheet

Assigned to
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ENACTED

ARIZONA STATE SENATE

Fifty-Seventh
Legislature, Second Regular Session

ENACTED

AMENDED

FACT SHEET FOR
H.B. 2938/S.B. 1108

cash transactions; mandatory rounding method

Purpose

An emergency measure effective March 12, 2026, that requires sellers to
apply the Swedish rounding method in cash transactions if one-cent coins are
not available or utilized at a point of sale.

Background

The U.S. penny, officially known as the cent, was created by the U.S.
Mint shortly after its establishment in 1792. The penny is the lowest
face-value physical unit of U.S. currency currently in circulation. Under
federal law, the U.S. Secretary of the Treasury has the authority to mint and
issue pennies in amounts necessary to meet the needs of the United States. In
2025, the U.S. Mint was instructed to stop making pennies and on November 12,
2025, the last penny was produced for general circulation (
U.S.
Mint
; 31 U.S.C. ��
5111

and
5112
).

The Weights and Measures Division of the Arizona Department of
Agriculture (Division) is established to promote fairness in Arizona commerce
involving weighing or measuring for commercial purposes. Duties of the Division
include: 1) maintaining Arizona's standards of weight and measure based on
national standards maintained by the federal government; 2) licensing weighing
and measuring devices used in Arizona; 3) conducting a wide variety of
inspection programs to protect the marketplace; 4) auditing measuring devices; and
5) enforcing related statutes, rules, and regulations (
A.R.S. Title 3, Chapter 19
).

Statute outlines trade and commerce practices in general and for
particular industries and transactions, including practices that are deemed
unlawful (
A.R.S. Title 44
).

There is no anticipated fiscal impact to the state General Fund
associated with this legislation.

Provisions

1.

Requires
a seller, if one-cent coins are not available or are not used by the seller at
a point of sale, to apply Swedish rounding to the total transaction amount to
the nearest five-cent increment as follows:

a)

rounded down if the amount ends in one or two cents;

b)

rounded up if the amount ends in three or four cents;

c)

rounded down if the amount ends in six or seven cents or

d)

rounded
up if the amount ends in eight or nine cents.

2.

Applies Swedish rounding to a final total transaction amount of a cash
transaction after taxes, fees and other charges are calculated.

3.

Exempts, from Swedish rounding, a transaction that is paid by credit
card, debit card, electronic funds transfer, mobile payment application or
other non-cash payment.

4.

Requires a seller that is subject to Swedish rounding to post a notice
that is visible to customers at the point of sale stating:
cash transactions
are rounded to the nearest five-cent increment pursuant to state law
.

5.

Prohibits a seller from applying a rounding method other than Swedish
rounding.

6.

Requires a seller to calculate and remit all taxes and fees that are
imposed by a state or municipal taxing authority based on the sales price
before the cash transaction was rounded.

7.

Requires the Swedish rounding requirement to be enforced by the
Division.

8.

Allows the Division to issue warnings and orders and impose civil
penalties relating to the Swedish rounding requirement.

9.

States that a seller is not in violation of any other state or municipal
requirement, law, regulation or standard if the action is based in compliance
with rounding requirements.

10.

States
that the Swedish rounding requirement is intended to operate consistently with
federal law that governs U.S. coinage and legal tender.

11.

States that the Swedish
rounding requirement does not:

a)

declare any coin or currency invalid as legal tender;

b)

require acceptance or refusal of any specific denomination of U.S. coin
or currency; or

c)

preempt,
conflict with or supersede any provision of federal law regulation.

12.

Contains
a statement of legislative intent.

13.

Makes
conforming changes.

14.

Becomes
effective on March 12, 2026.

Amendments Adopted by
Committee

1.

Removes the exemption of the sale of an individual item from Swedish
rounding.

2.

Requires a seller to calculate and remit all taxes and fees that are
imposed by a state or municipal taxing authority based on the sales price
before the cash transaction was rounded.

3.

States that a seller is not in violation of any other state or municipal
requirement, law, regulation or standard if the action is based in compliance
with rounding requirements.

4.

Adds
a statement of legislative intent.

5.

Makes
conforming changes.

Amendments
Adopted by Committee of the Whole

�

Adds an emergency clause.

House Action
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Senate
Action

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2938 was substituted for S.B. 1108 on 3
rd
Read)

Signed by the
Governor 3/12/26

Chapter 5

Prepared by Senate Research

March 30, 2026

JT/HD/ci

Current Bill Text

Read the full stored bill text
SB1108 - 572R - S Ver

Senate Engrossed

cash transactions;
mandatory rounding method

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SENATE BILL 1108

AN
ACT

amending title 44, chapter 38, article 1,
arizona revised statutes, by adding section 44-7952; relating to cash
transactions.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1.
Heading change

The chapter heading of title 44,
chapter 38, Arizona Revised Statutes, is changed from "BUSINESSES EXEMPT
FROM MASK MANDATE" to "BUSINESSES GENERALLY".

Sec. 2. Title 44, chapter 38, article 1,
Arizona Revised Statutes, is amended by adding section 44-7952, to read:

START_STATUTE
44-7952.

Cash transactions; mandatory rounding of transaction totals;
notice; enforcement

A. If one-cent coins are not
available or are not used by a seller at a point of sale, the seller shall
apply swedish rounding to a total transaction amount that rounds the total
transaction amount to the nearest five-cent increment.� If a total
transaction amount ends:

1. In one or two cents, the total
TRANSACTION amount is rounded down to the nearest multiple of five cents.

2. In three or four cents, the total
TRANSACTION amount is rounded up to the nearest multiple of five cents.

3. In six or seven cents, the total
TRANSACTION amount is rounded down to the nearest multiple of five cents.

4. In eight or nine cents, the total
TRANSACTION amount is rounded up to the nearest multiple of five cents.�

B. Swedish rounding applies to a
final total TRANSACTION amount of a cash transaction after taxes, fees and
other charges are calculated.

C. Swedish rounding does not apply to

a transaction that is paid by a credit card, debit card,
electronic funds transfer, mobile payment application or other non-cash
payment method.

D. A seller that is subject to this
section shall post a notice that is visible to customers at the point of sale
stating "cash transactions are rounded to the nearest five-cent
increment pursuant to state law".

E. A seller may not apply a rounding
method other than swedish rounding.

F. A seller shall calculate and remit
all taxes and fees that are imposed by a state or municipal taxing authority
based on the sales price before the cash transaction was rounded.

G. This section shall be enforced by
the weights and measures services division of the arizona department of
agriculture pursuant to title 3, chapter 19. the division may issue
warnings and orders and impose civil penalties in addition to other enforcement
measures.

H. A seller is not in violation of
any state or municipal requirement, law, regulation or standard if the action
is based on compliance with this section.

I. This section is intended to
operate consistently with federal law that governs united states coinage and
legal tender.

J. This
section does not:

1. Declare
any coin or currency invalid as legal tender.

2. Require acceptance or refusal of
any specific denomination of the united states coin or currency.

3. Preempt, conflict with or
supersede any provision of federal law regulation.

END_STATUTE

Sec. 3.
Legislative intent

The legislature intends that section
44-7952, Arizona Revised Statutes, as added by this act, protects
businesses and governmental agencies in this state.

Sec.
4.

Emergency

This act is an
emergency measure that is necessary to preserve the public peace, health or
safety and is operative immediately as provided by law.