(The Center Square) – On the heels of the federal government’s decision to stop making pennies, the Florida Legislature has passed a bill to address the impacts.
Senate Bill 1074 cleared both chambers. It authorizes retailers to round to the nearest nickel if there is a shortage of pennies. The bill only applies to cash transactions and sales tax must still be paid on the stickered amount. Merchants can choose whether to round up or down.
Rep. Angela Nixon, D-Jacksonville, who voted against the bill on Tuesday, said she would have preferred it to require retailers to always round in the customer’s favor.
“I do own a store, and I do go to other stores, and I see people getting upset about business owners rounding up. I just wanted to put that out there,” Nixon said.
Rep. Fiona McFarland, R-Sarasota, who sponsored the bill in the House, responded to questions on whether such a bill is warranted.
“There’s a potential scenario out there where a lot of consumers, perhaps as Rep. Nixon outlined, could be very upset that the retailer was choosing to round in the retailer’s own favor and could perhaps gather together to bring a lawsuit against that retailer. In places I shop, I like to say the customer is always right, so maybe if a retailer is not rounding in my favor I can choose to take my business elsewhere if I transact in cash. So you can start to understand why a law of this measure is necessary as pennies leave our currency and our exchange,” McFarland said.
The government stopped making pennies in November, citing production cost. Over the past decade, total production cost rose from 1.3 cents to 3.69 cents per penny, according to the U.S. Department of Treasury. It estimated an immediate annual savings of $56 million in reduced material costs.
“Given the increasing number of non-cash transactions and the very low purchasing power of a single penny, the Department of the Treasury does not believe continued production is fiscally responsible or necessary to meet the needs of commerce in the United States,” the U.S. Department of Treasury said on its website.
States and municipalities were left to determine how the decision impacted sales tax laws.
While penny manufacturing has ceased, the Federal Reserve will continue to recirculate pennies. There are an estimated 114 billion pennies currently in existence, according to the U.S. Department of Treasury.
