I think there is some kind of ruling that pennies are not legal tender."
Pennies are just as much legal tender as any other US Mint issued items, either paper or coin.
>>>Pennies are just as much legal tender as any other US Mint issued items, either paper or coin.
True, but businesses are not obligated to accept pennies as the sole form of payment.
From the Department of the Treasury Website:
FAQs: Currency
Legal Tender Status
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
What are Federal Reserve notes and how are they different from United States notes?
What are United States Notes and how are they diferent from Federal Reserve notes?
Question I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
Answer The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.
http://www.treas.gov/education/faq/currency/legal-tender.shtml#q1