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
Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
A new manufacturing technique uses a process similar to newspaper printing to form smoother and more flexible metals for making ultrafast electronic devices.
The low-cost process, developed by Purdue University researchers, combines tools already used in industry for manufacturing metals on a large scale, but uses...
For the first time ever, scientists have determined the cosmic origin of highest-energy neutrinos. A research group led by IceCube scientist Elisa Resconi, spokesperson of the Collaborative Research Center SFB1258 at the Technical University of Munich (TUM), provides an important piece of evidence that the particles detected by the IceCube neutrino telescope at the South Pole originate from a galaxy four billion light-years away from Earth.
To rule out other origins with certainty, the team led by neutrino physicist Elisa Resconi from the Technical University of Munich and multi-wavelength...
For the first time a team of researchers have discovered two different phases of magnetic skyrmions in a single material. Physicists of the Technical Universities of Munich and Dresden and the University of Cologne can now better study and understand the properties of these magnetic structures, which are important for both basic research and applications.
Whirlpools are an everyday experience in a bath tub: When the water is drained a circular vortex is formed. Typically, such whirls are rather stable. Similar...
Physicists working with Roland Wester at the University of Innsbruck have investigated if and how chemical reactions can be influenced by targeted vibrational excitation of the reactants. They were able to demonstrate that excitation with a laser beam does not affect the efficiency of a chemical exchange reaction and that the excited molecular group acts only as a spectator in the reaction.
A frequently used reaction in organic chemistry is nucleophilic substitution. It plays, for example, an important role in in the synthesis of new chemical...
Optical spectroscopy allows investigating the energy structure and dynamic properties of complex quantum systems. Researchers from the University of Würzburg present two new approaches of coherent two-dimensional spectroscopy.
"Put an excitation into the system and observe how it evolves." According to physicist Professor Tobias Brixner, this is the credo of optical spectroscopy....
13.07.2018 | Event News
12.07.2018 | Event News
03.07.2018 | Event News
23.07.2018 | Science Education
23.07.2018 | Health and Medicine
23.07.2018 | Life Sciences