Georgia DOR Issues New Guidance on Penny Rounding for Cash Transactions (SUT 2025-02)
The Georgia Department of Revenue has issued Policy Bulletin SUT 2025-02 explaining how retailers should handle cash transactions now that the federal government has stopped producing pennies. Learn how rounding works, how to calculate sales tax correctly, and what dealers must do to remain compliant.
Introduction
With the federal government discontinuing production of the penny, many retailers and tax professionals have been left wondering how to properly handle cash transactions that traditionally relied on one-cent denominations.
On December 5, 2025, the Georgia Department of Revenue (DOR) issued Policy Bulletin SUT 2025-02, providing long-awaited guidance on how dealers should round transactions without violating Georgia sales tax laws.
This bulletin affects all Georgia retailers who accept cash—including convenience stores, restaurants, service providers, and any business that processes point-of-sale transactions requiring coins.
Key Takeaways From the Georgia DOR Bulletin
1. Retailers May Round to the Nearest Nickel
When a cash transaction results in an amount requiring pennies, Georgia dealers are now permitted to round the final amount due (cash only) to the nearest $0.05.
Examples:
- $10.01 → $10.00
- $10.02 → $10.00
- $10.03 → $10.05
- $10.04 → $10.05
This simplifies cash handling and prevents retailers from needing to keep pennies on hand.
**2. Sales Tax Must NOT Be Recalculated After Rounding
This is the most important compliance requirement:
➡️ Sales tax must be calculated based on the original transaction amount before rounding.
The rounding adjustment applies only to the final cash amount received from the customer—not to taxable sales price and not to the amount of tax ultimately remitted to the state.
Actual Language From the Georgia DOR Policy Bulletin (SUT 2025-02)
“The Georgia Department of Revenue (DOR) published a policy bulletin providing guidance on how to handle cash transactions requiring pennies, given the federal government’s decision to end production of the penny. The bulletin allows dealers to round the total amount due to the nearest nickel when pennies are needed for exact change, without recalculating the sales tax, which should be remitted based on the initial sales price before rounding.”
— Ga. Dep’t of Revenue, SUT 2025-02 (Dec. 5, 2025)
This quoted directive represents the authoritative instruction dealers must follow.
Why the Tax Must Be Calculated Before Rounding
Sales tax in Georgia is based on the actual sales price of the good or service—not on the amount of cash exchanged.
The DOR’s position preserves:
- Accuracy in tax remittance
- Uniformity across transactions
- Protection of state revenue
Failure to follow the rule could result in under-remittance or over-remittance, creating audit exposure.
Does This Apply to Card or Digital Payments?
No.
Rounding is permitted only for cash transactions, because cash is constrained by physical denominations. Electronic transactions still process exact cents and should not be rounded.
Compliance Steps for Georgia Retailers
1. Update POS (Point-of-Sale) Systems
Ensure your system:
- Calculates sales tax on the pre-rounding sales price;
- Rounds only the cash amount due;
- Records both the original price and the rounded amount.
2. Train Employees
Front-line workers should understand:
- When rounding applies;
- How to explain it to customers;
- That this change is state-authorized.
3. Maintain Accurate Records
Auditors will expect to see:
- Sales receipts showing original taxable sales price;
- Tax calculated correctly;
- Rounded total applied at the cash-transaction level.
Best Practices to Avoid Audit Issues
- Document your rounding policy in your compliance manual.
- Test POS configurations after updates.
- Review monthly tax remittances to confirm that rounding has no effect on tax totals.
- Retain copies of Georgia DOR Bulletin SUT 2025-02 for audit defense.
Conclusion
Georgia’s new penny-rounding policy provides a practical solution for cash transactions following the elimination of the penny, but it also introduces new compliance responsibilities for retailers.
Dealers must remember:
➡️ Round the total due, not the sales tax.
➡️ Tax is always calculated on the original transaction total.
If you need help updating your POS system, training staff, or ensuring your tax remittances comply with Georgia Policy Bulletin SUT 2025-02, our firm can assist.
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