In a clean installation of Zen Cart, USA "zones" match against "state" only. So by default Zen Cart does not include a "San Francisco" zone... Not sure why this was added, but the zone probably matches NOTHING. I would recommend removing the "San Francisco" zone to avoid future confusion unless there is a valid business reason this zone was added to Zen Cart (and it actually does something).

You should be using the "California" zone as the zone where the "San Francisco" local tax rule should be applied. Once you "fix" this setting on your rule, if all else is correct, the two rates should be applied (CA and SF).

Quote Originally Posted by noyloza View Post
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What is the "Tax Class" of the product? Does it match the "Tax Class" selected in the configured rule? how can i check this?
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In the admin open up "Catalog" > "Categories / Products". Find the product you testing with. Select and edit the product. On the edit page what is selected for the "Tax Class:"? Does it match the "Tax Class" selected in the local sales tax rule?

Quote Originally Posted by noyloza View Post
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Are there any "debug" files in "/logs" or "/cache" (if so please provide here using "CODE" blocks)? not sure...
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See Step 2a on this page. It should help guide you when looking for these files.

Quote Originally Posted by noyloza View Post
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should my local sales tax be .5% then instead of the complete 8.75%?
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Yes.