> if you're handling cash you still have to deal with 1c and 2c coins because of that.
I don't think so. The same way you don't have to handle sub-1-penny tax amounts, you won't have to handle sub-nickle tax amounts later. There'll be some sort of rounding mechanism just like you described.
Well, yes. That's why I mentioned the rounding mechanism later. However, US-style sales taxes make the process of applying that more difficult because you can end up with weird numbers, whereas with VAT, you can pre-round things to minimise the disruption.
I don't think so. The same way you don't have to handle sub-1-penny tax amounts, you won't have to handle sub-nickle tax amounts later. There'll be some sort of rounding mechanism just like you described.