I mentioned the reason in another comment, it's an important govt transparency principle that the tax burden be separate and visible.

Yes, but much like cigarette lobbying, you want to look at who's paying for the given outcome. We have cigarette minimum prices because it increases profits for tobacco companies, and we have this fraudulent price reporting nonsense because lower advertised prices result in more sales. Transparency could just as easily be achieved via a tax breakdown on the receipts merchants are already required to provide on request, while correctly advertising what the consumer will actually pay.

Do you mean states of the USA or states as in "country"? Which ones?

I meant states of the USA. It looks like it's not as bad as it used to be (time for me to read a few more laws I guess). A decade ago WA prohibited the practice. I'm not sure where it might currently be illegal.