I think I managed to fix my problem. It might not have been the right way, but the calculation is working properly now. I commented out line 109 on the ot_local_sales_taxes.php file (I'm using version 2.5.1 which I guess never actually got posted to the repository for download but it's available earlier in this thread. Posting the function below in case it helps someone else - or in case someone sees a flaw in my very rudimentary attempt.

//update order info totals
$apply_tax_to_shipping = check_tax_on_shipping($taxrec['tax_shipping']);

if($apply_tax_to_shipping){

$shipping_tax = zen_calculate_tax($order->info['shipping_cost'], $taxrec['tax']);
//commented out line below to fix addition of shipping tax twice into order total
//$order->info['shipping_tax'] += $shipping_tax;
$tax_total_for_class += $shipping_tax;
} // end if apply to shipping