The purpose of this article is to provide guidance to retailers about the calculation of Wisconsin sales and use taxes on cash transactions impacted by penny shortages due to the United States Treasury no longer minting or producing new pennies for circulation.
The penny shortage does not impact how sales tax is calculated on a retail sale. Retailers multiply the sales price of taxable items by the Wisconsin sales tax rates and round that amount to the nearest cent ($0.01), as provided in sec. 77.61(3m), Wis. Stats., and sec. Tax 11.32(5), Wis. Adm. Code. If a retailer chooses to round the cash transaction to the nearest nickel, such rounding should occur after the sales tax is calculated.
Other Non-Tax Considerations
This guidance applies only to Wisconsin sales and use tax; rounding cash transactions may present other issues and businesses should consult with their legal advisor before changing any business practices. Also see the additional guidance issued by the Wisconsin Department of Agriculture, Trade and Consumer Protection.
Example of Sales Tax Calculated on a Rounded Cash Transaction
The sales tax due on the receipt below is $0.56 and must be remitted to the department even though the retailer reduced the total transaction amount due by $0.02 to facilitate rounding for a cash payment.
| Receipt #12345 |
| Items Sold | Price |
| Taxable Item 1* | $7.79 |
| Taxable Item 2* | $2.39 |
| Nontaxable Item 3 | $4.99 |
| Nontaxable Item 4 | $3.99 |
| Subtotal | $19.16 |
| *Sales Tax Due ($10.18 x 5.5%) | $0.56 |
| Total | $19.72 |
| Rounded for Cash Payment | ($0.02) |
| Cash Paid | ($20.00) |
| Cash Returned | $0.30 |
| Balance Due | $0.00 |
Guidance Document Number: 100324