No good for working people

Typically you spend no more than 50% of your gross income on items with sales taxes (after all kinds of taxes, IRA, etc, I doubt anybody has more than 50% to spend on anything). So your sales tax rate has to be more than twice the average state tax rate that applies to your income to make this option attractive. This almost never happens in any state with state taxes.

For states without income taxes, the vast majority of us should select standard deduction anyway ($14000 for joint returns in 2003). Say with a sale tax rate of 8%, you have to spend 175k to exceed that amount. That would be a very expensive new car!