My merchant processor charges me a fee plus a percentage of the total sale, which is why most vendors don't want to deal with smaller purchases. If you buy a $5 item and use your card, I'm out at least 10-15% of that sale. It's not really worth it. For a big purchase, say $300, it's ridiculous for me NOT to take a credit card. However, it's a lot slower as I have to process the payment over the phone, and I'm more likely to haggle when cash is involved.
As for sales tax, I believe the rate is around 9.5% in San Jose? To save time and hassling with loose change, I typically add the local sales tax in to my prices at the show so I don't have to calculate it later. As a business I have to pay my pound of flesh to the state later in the year, and I calculate that from my sales receipts.