> They should solve this problem by using the federal sales tax to round up/down. $1.25 + 5% = 5¢ of tax instead of 6.25¢. I see nothing but confusion there.

> They should solve this problem by using the federal sales tax to round up/down. $1.25 + 5% = 5¢ of tax instead of 6.25¢. I see nothing but confusion there. $1.25 + $0.05 = $1.30. After rounding, $1.30. $1.25 + $0.0625 = $1.3125. After rounding, $1.30. > It would be a tiny incentive to use cash rather than credit cards (which cost the merchant 2-4%) Dealing with cash instead of credit cards is also a similarly percentaged inconvenience - that's why they're getting rid of the penny in the first place!