1) for $740 all-inclusive; 2) for $699 with choice of color, plus 6% sales tax; 3) for $699 with choice of color, plus $42 sales tax; 4) for $699, tax included, with 6% mandatory surcharge for choice of color; or 5) for $699, tax included, with $42 mandatory surcharge for choice of color.

In all conditions, the total cost was the same, about $740. 

Nearly one third of subjects paid little to no attention to the effect that the percentage sales tax had on price, and even among those who did, only 25 percent correctly estimated the total cost. 

"[R]esults suggest that demand is higher when the add-on component is a sales tax as compared to an excise tax that is embedded into the total price. The effects on demand are even more pronounced and people recall lower prices when the add-on sales tax is presented as a percentage of the base price-as is generally the case in the U.S.-rather than as an additional currency component," said the abstract. 

The study also found that while consumers discount or ignore sales taxes when making a purchase, turning that sales tax into just a surcharged levied by the company did actually make people less likely to buy.