House committee reviews bill to allow 'nickel rounding' of cash transactions

The House Committee on Commerce & Economic Development on March 31 heard testimony on House Bill 837, which would authorize the rounding of cash transactions to the nearest five cents when pennies are unavailable.

Cameron Wood, legislative counsel in the Office of Legislative Council, told the committee the bill — titled the "nickel rounding for cash transactions act" in its short title — would add a new section to Title 9 to define cash transactions and permit symmetrical rounding after taxes and fees. "The purpose of this act is to authorize the rounding of cash transactions to the nearest 5 cents where one-cent coins are unavailable or impractical," Wood said, describing the statutory formula for rounding and noting the proposal applies only to cash, not electronic payments.

Retail representatives said clarity for merchants is the central aim. "Members are asking if they can or cannot round up or down," said Maggie Lens of the Vermont Retail Grocers Association, who described working with Rep. Casey to develop the draft. Lens said the association favors an optional approach that allows businesses to adopt rounding on their own timeline while following a uniform method when they do.

Consumer advocates warned the policy has small distributional effects and urged safeguards. "Research suggests symmetrical rounding generally transfers a modest amount to businesses — on the order of millions nationally — but it is not zero," said Zack Tomelli, consumer-protection advocate, who recommended point-of-sale notice and making the statutory formula the standard when rounding is used.

Banking and credit-union witnesses described practical reasons for the bill. Cristilia, president of the Vermont Bankers Association, said the Federal Reserve reduced penny distribution at many cash centers, contributing to shortages that have hindered merchants' access to pennies. Allen of the Association of Vermont Credit Unions said credit unions have redistributed coin to meet demand but sometimes must limit rolls for retailers.

Witnesses and counsel discussed implementation details: the bill requires notice (point-of-sale or receipt), taxes calculated on pre-rounding amounts, that refunds be issued in the exact amount paid, and exclusions for wages and federal programs. Thomas Weiss asked the committee to remove a subsection that would allow businesses to post a policy that they do not accept cash; he said such language could be interpreted as condoning refusal of legal tender.

Wood cautioned that authorizing rounding in statute could create new legal questions if businesses adopt a different rounding method than the one prescribed. He recommended consultation with the Attorney General's office and the Department of Financial Regulation before finalizing language. The committee agreed to invite the Deputy Commissioner of Banking and an AG representative to a later session and to revisit the bill at the end of the week.

No formal vote was taken at the hearing. The committee scheduled follow-up briefings with regulators to address federal preemption questions and operational details before further action.