America’s oldest coin had been around since 1793. Now that Trump has stopped the minting of new pennies, will promotional 99 cent pricing disappear? And what about sales taxes?
It ended with a button press. On November 12, 2025, U.S. Treasurer Brandon Beach stepped up to a steel control panel in the penny room of the Philadelphia Mint and sent the final batch of one-cent coins clinking into a tray. With that, the penny was officially on its death bed. No new pennies will be minted, and the supply will dwindle, as old ones get disappear into forgotten piggy banks, sofa cushions and junk drawers.
Beach, a President Trump appointee from May 2025, credited Trump’s “commonsense agenda” for eliminating the penny. It was, he said, a historic moment—the first time since 1857 that the U.S. had retired a circulating coin.
It was also a made-for-the-cameras moment. In reality, staffers noted, the last pennies destined for public use had left the Mint in July. But like so much of politics these days, it was about staging a show.
(Those final pennies minted? They’ll be auctioned off and will not go into circulation.)
A History of the Penny
The penny has been around for nearly as long as the country. Just a few years after the U.S. Constitution was officially ratified, the new government went to work hammering out the details for the new country. That included passing the Coinage Act of 1792 which ordered the minting of gold, silver, and copper coins. The new coins included eagles (ten dollars), half eagles (five dollars), quarter eagles (two dollars and a half dollars), dollars, half dollars, quarter dollars, dismes (not a typo, that’s the original spelling for the ten cent piece which was changed to dimes in 1837), half dismes (now called nickels), cents, and half cents.
The first pennies, struck in 1793, were made of pure copper (a cheap metal at the time) and featured a woman with flowing hair symbolizing liberty. Lady Liberty stayed on the penny for more than 60 years.
In 1857, the penny coin got smaller and cheaper to make, with a composition of 88% copper and 12% nickel. The design also changed, featured a flying eagle on the obverse (heads) and a wreath on the reverse (tails) from 1857 and 1858 and the “Indian Head” design from 1859 to 1909.
In 1909, Abraham Lincoln became the first president featured on a U.S. coin, done so in honor of what would have been his 100th birthday. The penny continued to be made of a mix of copper and nickel throughout the 20th century, with one exception: In 1943, pennies were made of zinc-coated steel because copper was needed during World War II (the Mint switched back to copper and nickel after the war).
From 2010 to the last penny struck in 2025, the design featured the “Union Shield” theme, with the obverse featuring Lincoln and a shield on the reverse. The amount of copper in the penny had shrunk yet again—modern pennies were made of 97.5% zinc with a 2.5% copper plating.
The Costs Didn’t Make Cents
Even with less copper used in the penny, the economics weren’t making much sense. Rising metal prices and other costs meant the Mint was losing money on every penny produced—about 3.69 cents per coin.
At the same time, demand for small change was decreasing. Americans weren’t reaching into their pockets to pay with coins anymore, instead they were swiping, clicking, and tapping their way through purchases—even slots and laundry machines went cashless.
“Each penny costs more to make than it’s worth,” Beach said in Philadelphia. “Ending production saves taxpayers an estimated $56 million a year.”
Treasury Secretary Scott Bessent had already formally ordered the Philadelphia and Denver Mints to stop production, following an order from President Trump. “For far too long the United States has minted pennies which literally cost us more than 2 cents,” Trump wrote in a post on Truth Social in February. “This is so wasteful! I have instructed my Secretary of the U.S. Treasury to stop producing new pennies.”
By that time, the total U.S. coin output had already dropped from a 2021 peak of 15 billion pieces to fewer than six billion last year. The U.S. Mint’s workforce had shrunk, too—down from about 400 to 300 employees—as automation increased and hiring slowed.
The U.S. Mint reported losing $85.3 million on making nearly 3.2 billion pennies in fiscal year 2024, according to the Mint’s annual report to Congress. Every penny cost nearly $0.037, up from $0.031 the year before.
(The Mint also loses money on the nickel, with each of the $0.05 coins costing nearly $0.14 to make. However, it costs less than six cents to make a dime, about 15 cents to make a quarter, and nearly 34 cents for a half-dollar.)
How Coin Circulation Works
Most consumers end up with coins as the result of change from a retail transaction. And, anyone who has ever worked retail knows, the excess coins at the retailer are routinely deposited in banks. Those banks or financial institutions are referred to by the Mint as FIs.
Since FIs aren’t handing out coins every day at the bank, they deposit their excess coins in one of the 28 Reserve Bank cash offices and offsite locations. Those deposits represent about half of the coins coming into the Reserve Banks. Another 40% comes from coin aggregators and the remainder—just about 10%—is composed of new coins from the Mint.
At the same time, the Reserve Banks are taking orders for coins for distribution. The coins are then distributed to approximately 11,000 FIs across the country depending on the needs of the local market. The Reserve Banks pay out 50 – 70 billion coins into circulation, valued at about $4 – $7 billion each year.
If there’s a gap, the Mint will boost production—but that hasn’t been the case. From 2008 through 2012, the combined inventory for pennies, nickels, dimes, and quarters decreased 43%, and coin orders from FIs have also decreased.
Rounding Up Sales
The penny’s demise may have you scratching your head and wondering: What happens now at the cash register?
It feels like it would be simple. For cash sales, totals should now be rounded to the nearest five cents, either up (if the purchase ends in .03 or .04) or down (if the purchase ends in .01 or .02). Of course, that’s for cash only. For card and digital transactions, nothing changes and amounts remain exact to the cent.
But it may not be that easy. At least 10 states and localities have cash laws intended to ensure cash customers are not disadvantaged compared to those using electronic payment methods, which would essentially prevent businesses from rounding cash transactions up or down. Earlier this year, the National Association of Convenience Stores sent a letter to the Senate Banking and House Financial Services Committees calling on lawmakers to establish a national law to allow rounding so that businesses aren’t breaking laws. That hasn’t happened.
And it’s not just state and local laws that could be problematic—the NACS also suggested that rounding for cash customers could violate the terms of the Supplemental Nutrition Assistance Program (SNAP).
(You can read more about the history of SNAP here.)
How Does It Impact Consumers?
In practice, economists say the effect will be negligible on consumers. They suggest that consumers will pay slightly more on some transactions and slightly less on others, with no measurable inflation, a welcome result for spend-weary Americans.
Studies from Canada, which retired its penny in 2012, show that rounding evens out over time. But a study published with the Federal Reserve Bank of Richmond earlier this year said those studies rely on simulated transaction values based on price information from individual retailers and assumptions on purchasing bundles and sales taxes, leading to mixed conclusions. Using data from the 2023 DCPC, a Federal Reserve-sponsored survey that tracks real payments from a nationally representative sample of consumers, they estimated that a “rounding tax” (round cash transactions to the nearest five cents) could cost U.S. consumers approximately $6 million annually.
(Eliminating the nickel in addition to the penny would push it to $56 million per year for consumers.)
The psychology of pricing may also shift. For decades, retailers have relied on the “99 cent trick”—the idea that a $4.99 burger or a $19.99 shirt that feels considerably cheaper than a $5 burger or a $20 shirt. With rounding, those tricks may lose some power, especially in cash purchases that now end with a nice round number.
What About Sales Taxes?
Importantly for cities and states, which had no say in the move to quash the penny, sales taxes should still be calculated before rounding the final cash total. However, the move does introduce uncertainty into sales tax calculations—we haven’t really seen this before. The elimination of the half-penny nearly 225 years ago preceded sales taxes, since Mississippi was the first state to implement a general sales tax beginning in 1930.
Rounding up prices for cash but not credit could cause confusion at the register for sales tax, and potentially spur some litigation. Consumers may question whether it’s fair to pay more sales tax for cash purchases—especially when many consumers are considering using more cash now that credit card fees are on the way up.
Retailers may wonder whether there will be any kind of transition relief for calculations. Do you err on the side of collecting too much or too little?
Currently, there’s no “rounding rule” focused on the elimination of the penny—state and local governments, some of which have fractional sales taxes (like Massachusetts’ 6.25% sales tax or Nebraska’s 5.5% sales tax), should eventually provide additional guidance.
What’s Next?
It is unclear whether Trump had the power to unilaterally eliminate the penny, since currency specifications, including the size and metal content of coins, are dictated by Congress. In 1857, when the half-cent coin was discontinued, it was done so by Congress. It may not matter—it’s unlikely that anyone in Congress will argue to bring it back.
And while the penny may be gone from the production lines, it will stay put—at least for a little while. There are still an estimated 250 billion pennies in circulation according to the American Bankers Association. Because there are so many pennies in circulation (and they remain legal tender) it will take years for them to completely disappear.