When customers use paypal they are charged tax

-- HikaShop version -- : 2.4
-- Joomla version -- : 3.4.8
-- PHP version -- : 5.3.29
-- Browser(s) name and version -- : Chrome latest

After lots of testing I have discovered that PayPal users who use a credit card (not users who pay using their PayPal account) are being charged tax, regardless of where they live. We have only one tax zone which is the state we are doing business. When customers checkout without using PayPal, and when they checkout using their PayPal account, everything works as it should. If they live in our state they are charged tax accordingly, if they don't, no tax is charged. But when they click the PayPal checkout and then opt to pay using a credit card, they are charged the 6% tax no matter where they live.

Here are a couple of clues. These customers have an abbreviated State field on their order. All others are spelled out. So it seems that the address info coming back from PayPal is different or is processed differently, which then cause the tax lookup to charge tax when it shouldn't. The other odd thing is that on the order page (admin), each product shows the tax that was charges as "+$0.66 of VAT" below the product charge.

I have tried to figure out where I am going wrong, but I can't find any solution.

I left out the fact that it is when visitors use PayPal express that this occurs. It is when they use the PayPal button in the cart, so they have not entered any address info in Hikashop. So Hikashop must be getting the address info from PayPal (when it collects CC info). I think that is why the State field is abbreviated. My question right now is could that abbreviated form of the State field impact how the tax, or the VAT is figured? Also what config settings should I use if we don't ever deal with any VAT since we only do business in the US? Could you tell me where the "+$0.66 of VAT" line on the order breakdown comes from? If I click on the edit icon for the line item, it is listed as VAT and shows the tax category as well, which again is the State tax even though they are not in the correct State..

Here's another discovery. If I add something to the cart and checkout, on the initial screen, before any addresses are entered, the cart shows state tax being charged (as if it's by default). If the PayPal button is clicked (PayPal Express), an order is created and I'm taken to the PayPal site to login or pay by credit card. At this point, there are no addresses in the order. I'm assuming that the address is collected by PayPal and returned to Hikashop so that tax and shipping can be determined. After I enter my credit card info I am returned to the site and the order is completed. I entered a different shipping address in PayPal, and it was recorded as both the billing and shipping address in Hikashop! The tax was still charged, even though the addresses are in a different state.

OK. It's getting better. I followed your directions and have most of the problems resolved. However, when the state tax is applied, there is a blank line with a no label and a price of 0.00. Maybe because I have two default tax categories, one for the state tax (6%0 and one for the zero tax that is the default in the main tax zone?

I'm also having some strange behavior still with PayPal express checkout. I have the button active in the cart and everything works fine if the visitor has not entered their address. But if they have entered an address and saved it, when they click on the Paypal Express button, they never get redirected to PayPal, instead they are redirected to this url: index.php?option=com_hikashop&ctrl=checkout&task=notify¬if_payment=paypalexpress&tmpl=component&setExpressCheckout=1 which generates a "requested page cannot be found" error with the explanation: Invalid address. It is probable something I have done, but could you lead me in a good direction to troubleshoot?

Thanks. It turns out that autoupdate was enabled on the host. I didn't even know such a thing existed ... what a bad idea! I do have 3.5.1 now and that explains allot. I'll apply the patch.

In terms of having the extra tax rule: I can't seem to empty the "main tax zone" field in the tax config. That is why I created the 0% rule. So how can I accomplish this without it?