I am at my wits end on this.

The Zone is there for my state (Texas - the location of my store).

Under Zone definitions I inserted/added the zone name of Texas and I deleted the Florida Zone definition that was already there

In Admin>Configuration>My Store I made sure Basis of Product Tax was set to Shipping and Basis of Shippign Tax was set to Shipping also.

Under Admin>Locations/Taxes>Tax Rates I inserted:
-Tax Class Title: Taxable Goods
-Zone: Texas
-Tax Rate (%): 7.25
-Description: TX TAX 7.25%
-Priority 1

I have a Taxcable Goods class already set up in the default zin installation and have set all of my products as Taxable Goods.

But entering sample orders for states other than Texas it keeps adding Texas sales tax. When I look back under Zone Definitions I see Texas there but the Status is red (not configured).

I did install the USPS shipping module after I signed up for a Web Tools Kit and I entered my username assigned by the USPS. But I am offering flat rate shipping on my site so I disabled it after signing up for it. I signed up for it because I wanted to see if it would affect the problem here and it didn't.

Any help greatly appreciated...I am using Zen 1.3.9h.