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Already answered in your other post on the same topic: http://www.zen-cart.com/showthread.php?201697-Paypal-Express-checkout-and-local-taxes

Yes. That's the only way it works.

It sounds like you've not gone through a complete checkout yet.

A - The customer adds to their cart.

B - Then has two choices:
1. Normal checkout, which...

Zen Cart can only assess taxes when it knows the customer's address. So, that either happens as a result of the customer first creating an account on your store, or after they've logged in to PayPal...