For example, usually a bag of chips at Target or Walmart or a convenience store will say eg $3.99 printed on the bag. Some stores will slap their own dominant label on there, others choose not to.
Vendors often stock the shelves at stores, especially for certain categories of products, and store types. The chip delivery guy will stock the convenience store, Walmart, etc.
Chip production (eg Doritos) and delivery is limited to just a few factories, but they distribute to every state. For convenience, for decades, the companies have typically pre-stamped prices on chip bags.
So why not do it with hotels? Because no other segment of the economy tends to do it, and for the other reason mentioned: it cuts into price rounding advertising methods (or you have to raise prices to the next rounding).
If you want taxes built into the pricing on consumer goods, either they have to stop price labeling before delivery, or customize for every state. At this point, nobody really wants to change, because the system works fine as is. Ie it's good enough, but not perfect.
This is a bit of a cheat, first because high lodging taxes are often created at the request of local hotel owners: it typically feeds a tourism-advertising slush fund. Also, we're now overrun by TIF, a scheme by which government loan guarantees for development are theoretically repaid by higher "taxes" on business in the developed area. In that case hotel guests are directly paying the bills for hotel investors.
I think your system sucks donkey ass. :)
The actual reason is a lack of sufficient pressure to change this practice.
:)
In most cases it's because local lodging taxes are insanely high. I regularly see e.g. $65 rooms bumped up to close to $100. (I haven't stayed in SF, but it would surprise me if it's an exception.)
Are European taxes set at a national level? In USA the relevant taxes are set by each city and county, so by hiding the tax, highly-taxed hotels can better compete with those in the next town over.
EDIT: don't expect anything to be good for the consumer!
Your answer doesn't make sense though. Laws around price display need to be consumer-centric, not provider-centric. Why should a place in a high-tax location be able to compete with a place in a low-tax location by fooling the customer?