"Is this legal?"
I can't believe everyone who answered this question with the exception of NA thought this was perfectly legal to do. Sales tax laws vary from state to state.
Depends entirely on the state & state sales tax laws vary from state. It also depends on how you do it. AS NA said - in general, in most states it has to be itemized on the receipt.
"The vast majority of states have a consumer sales tax, where the buyer bears the legal burden of the tax and the seller is **required** to collect and remit the tax to the state."
""In some states, the tax is imposed on sellers, who then have the option of passing the tax along to their purchasers. In other states, the tax is imposed on the purchaser, with the seller being responsible for collecting the tax and remitting it to the state. And then there are other states where the liability for the tax is shared by sellers and purchasers"
"If you are registered for purposes of New York State's sales tax you are a trustee of New York State and you have a responsibility to collect the proper amount of sales tax from your customers and to remit the tax you have collected with your timely filed sales tax return. If you are registered for purposes of New York State’s sales tax you are a trustee of New York State and you have a responsibility to collect the proper amount of sales tax from your customers and to remit the tax you have collected with your timely filed sales tax return." There are some states like NY which don't require a receipt but if you give one you **must** itemize & state the sales tax separately. If you don't give a receipt than you may use the alternate unit price method where the sales tax is included in the purchase price. If you use this method - you have to have to have a notice or sign stating this is what you are doing. You have to inform the customer.
IN Kentucky,
" although the sales tax is generally imposed on a retailer's gross receipts, shifting of the tax to the purchaser is **mandatory**. Sales tax must be separately stated and the tax becomes a debt from the retailer to the state of Kentucky. **Absorbing** the tax is not permitted."
In the state of Maryland
"A vendor may assume or **absorb** all or any part of the sales and use tax on a retail sale and pay that tax on behalf of the buyer. The vendor must, however, continue to separately state the tax from the sales price at the time of the sale to the purchaser. If the vendor absorbs all or any part of the tax on the sale, the vendor shall pay the tax with the return that covers the period in which the vendor makes the sale."
In the state of IA (see IA sales & use tax pub)
In IA, it's illegal to tell the customer the seller is **absorbing** the tax. The seller **must** add the tax to price & collect from the customer. The seller may include the sales tax in the price of the item & this is typically done. The seller either has to post a notice or include a statement on the invoice the tax is included in the purchase price. It does NOT have to be itemized.
In WI, the retailer is responsible for the taxes & they can pass the tax onto the customers or the seller can pay it all. They don't have to charge or collect; but if they do they have to give an itemized invoice to the customer. The tax due is the total taxable sales multiplied by the tax rate regardless of how much they collect from the customer.
"There are the three general types of sales taxes:
Seller (vendor) privilege taxes. These taxes are imposed on retailers for the privilege of making retail sales in the state. Retailers usually have the option of absorbing the tax (that is, paying the tax out of their own pockets) or passing it along to their purchasers.
Consumer excise (sales) taxes. A consumer sales tax is are imposed on the person who makes retail purchases in the state. In the states that impose this type of tax, sellers serve purely as agents who must collect the tax on the state's behalf. Because the tax is primarily the purchaser's responsibility, sellers don't have the option of absorbing the tax and usually must separately state the tax on the receipts or invoices they provide their purchasers.
Retail transaction taxes. These taxes are imposed on the retail sale transaction itself, with the primary liability for paying the tax falling upon both the sellers and the purchasers. Sellers are responsible for collecting and paying the tax, and purchasers are responsible for paying the tax that the sellers must collect and pay. In essence, this type of sales tax is a hybrid of the other two types. Operationally, however, it's closer to a consumer excise tax because sellers are not given the option to absorb the tax."
AZ has a transaction tax
http://www.bizfilings.com/toolkit/sbg/tax-info/sales-taxes/understanding-sales-tax-obligations.aspx
I'm certainly NO expert on state sales tax laws in all the states which have sales tax; but if you want to know the law in your state- read the sales tax pub for your state.