California Enacts Mandatory Cash Rounding — Newsom Signs AB 1793, Effective July 2027

California — the nation's largest state economy — has adopted a mandatory cash-rounding rule. On September 30, 2026, Gov. Gavin Newsom signed AB 1793, the California Common Cents Act by Assemblymember Christopher Ward (D-San Diego), which was chaptered as Chapter 896, Statutes of 2026. It makes California the second state, after Arizona, to require retail rounding of cash transactions — and the first large state to do so.

What the Law Requires

AB 1793 adds a new title to the Civil Code (§§ 1789.60–1789.67). Under it, a merchant doing business at a physical location in California "shall" determine the total price of a cash purchase by rounding to the nearest nickel:

• Totals ending in 1, 2, 6, or 7 cents round down; totals ending in 3, 4, 8, or 9 cents round up.
• It applies to payments made entirely in cash and to the cash portion of a split-tender payment. Cash refunds are rounded the same way.
• Totals of 2 cents or less are exempt, as are payments made entirely by card, check, electronic transfer, money order, electronic payment, or cryptocurrency.
• Taxes, fees, and surcharges are computed on the unrounded price; the state's tax agency may adopt regulations on that point.
• Using rounding to overcharge customers is enforceable under the same remedies as existing price-overcharge law.
• The state and local governments are not covered.

The law becomes operative July 1, 2027, giving retailers roughly nine months to update registers and train staff.

How It Passed

The bill passed the Assembly 62-1 on May 21, 2026 and the Senate 30-5 on August 20; the Assembly concurred in Senate amendments 68-1 on August 24, and the bill was presented to the Governor on August 28. Newsom listed it among the bills he signed in his September 30 legislative update.

A Second California Penny Law

Separately, on September 18, 2026, Newsom signed SB 1005, the PENNIES Act by Sen. Anna Caballero (D-Merced) (Chapter 321). As an urgency statute, it took effect immediately. It lets a local agency round cash payments it receives — and cash refunds it pays — to the nearest five cents, but only after its governing body adopts an authorizing resolution by majority vote.

Why It Matters

Most state rounding laws enacted since penny production ended in November 2025 are permissive: they let businesses round but don't require it. California's choice of a mandate — following Arizona's — means one uniform rule at every register in the state. It also arrives as Congress has passed the federal Common Cents Act (H.R. 10167), which would permit but not require rounding nationwide and would shield businesses that round in line with its terms from conflicting state rules.

Sources

• Asm. Chris Ward: Governor Signs the California Common Cents Act (Sep 30, 2026)
• Governor Newsom legislative update — September 30, 2026
• Governor Newsom legislative update — September 18, 2026 (SB 1005)
• AB 1793 bill history and text (CalMatters Digital Democracy)
• AB 1793 (California Legislative Information)