They sit next to cash registers in stores across America, little cardboard boxes or styrofoam cups or old plastic ashtrays.
"Take a penny, leave a penny," they say, or some variation -- a penny exchange that makes it easier for clerks to make change and for customers to avoid burdening their pockets with excess coins.
But at the end of the day (literally), where do those pennies fit on a store's bottom line? Cristi Gleason, an accounting professor at University of Iowa's Tippie College of Business, guesses that thousands of stores across the country have bowls filled with thousands of dollars in pennies that may or may not be properly accounted for.
"If the store sweeps them into the till, it counts as income," said Gleason, an expert in tax accounting. "As far as the IRS is concerned, it's taxable."
Although the penny bowls have become commonplace in stores across the country, Gleason doesn't believe any attempts have been made to figure out exactly how much money sits in them. Nor have any rules been issued that would require they be treated differently on an accounting or tax basis than any other income. On a store-by-store, day-to-day basis, she said the sums are so small that a handful of pennies will make little if any difference in a merchant's profit or tax bill.
"Realistically, the IRS won't care," she said. "They're not going to go looking for 10 or 12 cents in pennies."
But she said that if it's 10 or 12 cents everyday for a year, and it's at a few dozen or a few hundred stores under the same ownership, then someone might notice.
She said that's one reason why stores that are much larger than the mom-and-pop variety don't have countertop bowls full of pennies. And especially not in stores that are part of publicly traded companies and subject to the SEC's strict internal control and financial reporting rules requiring they maintain good cash management practices.
"You won't see them at McDonald's or Wal-Mart because those companies have extremely tight cash management procedures and they don't like to see pennies on the counter," she said.
Gleason said the penny jars have their benefits. They provide a service to customers who don't want to drag around a lot of low-value metal. They also limit the amount of change clerks have to make, reducing the risk of a change-making error that messes up the stores accounting.
She recommends, though, that stores keep the money from the bowls out of the register, and hope that as many people take a penny as leave a penny.
"In that case, the pennies are treated by the IRS to be a gift from one customer to another and the store isn't involved in the transaction at all," Gleason said.
Tom Snee | Newswise Science News
How Strong Brands Translate into Money
15.11.2016 | Kühne Logistics University - Wissenschaftliche Hochschule für Logistik und Unternehmensführung
Demographic change depresses tax revenues
04.11.2016 | Fraunhofer-Institut für Angewandte Informationstechnik FIT
Have you ever wondered how you see the world? Vision is about photons of light, which are packets of energy, interacting with the atoms or molecules in what...
A multi-institutional research collaboration has created a novel approach for fabricating three-dimensional micro-optics through the shape-defined formation of porous silicon (PSi), with broad impacts in integrated optoelectronics, imaging, and photovoltaics.
Working with colleagues at Stanford and The Dow Chemical Company, researchers at the University of Illinois at Urbana-Champaign fabricated 3-D birefringent...
In experiments with magnetic atoms conducted at extremely low temperatures, scientists have demonstrated a unique phase of matter: The atoms form a new type of quantum liquid or quantum droplet state. These so called quantum droplets may preserve their form in absence of external confinement because of quantum effects. The joint team of experimental physicists from Innsbruck and theoretical physicists from Hannover report on their findings in the journal Physical Review X.
“Our Quantum droplets are in the gas phase but they still drop like a rock,” explains experimental physicist Francesca Ferlaino when talking about the...
The Max Planck Institute for Physics (MPP) is opening up a new research field. A workshop from November 21 - 22, 2016 will mark the start of activities for an innovative axion experiment. Axions are still only purely hypothetical particles. Their detection could solve two fundamental problems in particle physics: What dark matter consists of and why it has not yet been possible to directly observe a CP violation for the strong interaction.
The “MADMAX” project is the MPP’s commitment to axion research. Axions are so far only a theoretical prediction and are difficult to detect: on the one hand,...
Broadband rotational spectroscopy unravels structural reshaping of isolated molecules in the gas phase to accommodate water
In two recent publications in the Journal of Chemical Physics and in the Journal of Physical Chemistry Letters, researchers around Melanie Schnell from the Max...
16.11.2016 | Event News
01.11.2016 | Event News
14.10.2016 | Event News
05.12.2016 | Power and Electrical Engineering
05.12.2016 | Materials Sciences
05.12.2016 | Power and Electrical Engineering