Tennessee Comptroller Offers Guidance on Penny Discontinuation

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The Tennessee Comptroller of the Treasury has released guidance for local governments on handling cash payments following the federal government's discontinuation of the penny. The guidance outlines options such as rounding rates, fees, and charges to multiples of five cents, as well as potentially declining non-exact cash payments altogether. The recommendations are intended to help local governments navigate the practical challenges while maintaining fairness and compliance with the law.

Why it matters

The discontinuation of the penny has created logistical challenges for local governments that rely on cash payments for various fees and charges. The Comptroller's guidance aims to provide a framework for how municipalities can adapt their policies and procedures to address this change effectively.

The details

The Comptroller's guidance includes several key recommendations for local governments to consider, such as rounding rates, fees, and charges to multiples of five cents, which could have the effect of raising or lowering all government-issued payments by a few cents. The Comptroller also suggested that local governments could consider declining non-exact cash payments altogether. The guidance also outlines implementation guidelines, such as consulting with legal counsel, ensuring policies are reasonable and applied uniformly, and training staff as necessary.

• In late 2025, production of the penny was halted amid rising costs of the materials used to create the coin.
• In 2024, a single penny cost $3.69 to make, resulting in an annual net loss of $85 million for the U.S. Department of the Treasury.

What they’re saying

What’s next

The guidance provided by the Tennessee Comptroller's Office is not legally binding, and local governments will need to carefully consider the recommendations and implement policies that make the most sense for their respective communities.