> State and local taxes make this infeasible

I don’t see why that would be the case? In my country, most prices with VAT (which is what you’re charged) are nice, round numbers, but not the price without VAT.

I suppose the stores set a target price, and then adjust it a bit to make the price + VAT a “nice” number.

Is there a reason that couldn’t be done to make all prices + VAT multiples of 5c?

Several reasons, it really is a mess.

The local tax is set by multiple independent tax authorities that change their taxes independently, the tax you see is the aggregate of those independent authorities computed separately, which do not coordinate with each other.

Some of these taxes are conditional at point-of-sale, late-binding the taxes, such that different customers are subject to different rates across these tax authorities such that it is unlikely to round to exactly 5c.

It is widely illegal to not display the true price and taxes paid separately. Trying to retcon a price and taxes for rounding purposes that is also strictly consistent across customers so as to not violate the law is not trivial.

And on top of all of this, the Federal government does not have the authority to regulate the way States and various locales structure their sales taxes. It is a herding cats problem.

I think that's what has to happen here. Things will be priced in such a way that the final price is a multiple of 5. That's a pretty easy thing for an inventory pricing system can figure out. We already do it for fractions of a penny, not sure why it would be a big deal for a fraction of a nickel

Lots of localities total taxes aren't whole percentages so it potentially gets tricky making prices work in those systems such that you can make whole 5 cent tax included prices with whole cent base prices. Do most POS systems support arbitrary precision item prices?