Arizona has a plan for the penny problem — and Governor Katie Hobbs just made it law.
Hobbs signed HB 2938 on Friday, establishing a standardized method for rounding cash transactions now that the U.S. Mint has stopped producing pennies. The bill passed through the state legislature with near-unanimous support, drawing just a single opposing vote in each chamber.
The law adopts what is known as Swedish rounding, a system already used in several other countries that have phased out their lowest-denomination coins. Under the new rules, cash totals ending in one or two cents will round down to the nearest nickel, while totals ending in three or four cents will round up. The same logic applies to amounts ending in six, seven, eight or nine cents respectively. The rounding is applied to the final transaction total — after taxes and fees are factored in — and does not affect credit card or other non-cash payments. Businesses are also still required to calculate and remit state and local taxes based on the pre-rounded amount.
The need for legislation stems from a decision set in motion by President Trump, who directed the Mint to halt penny production in an effort to cut costs. Each one-cent coin cost 3.7 cents to manufacture, and ending production was projected to save the federal government roughly $56 million annually. The Mint issued its last pennies in November 2025.
While approximately 114 billion pennies remain in circulation and must still be accepted as legal tender, the supply in cash registers has been dwindling, leaving businesses and consumers uncertain about how to handle transactions that can’t be settled to the cent. Congress has been working on a national rounding standard that would override state laws, but no federal legislation has cleared either chamber yet.
The Greater Phoenix Chamber of Commerce praised the bill as a practical stopgap that protects both consumers and businesses while the federal government catches up.
