Hi Rod,
Appreciate your time looking into this. I thought about this yesterday and came to the same conclusion you did that it would be better off just disabling display of tax if value is 0% to avoid confusion. This works if the website is just for retail business.
However we do have another one which does business for retail and wholesale. Resellers are tax exempt if they show us their resale certificate. So for purposes of record we need to show an invoice that says Texas Sales Tax= 0% even if ship address is within Texas.
Having said that. These are the results of the settings as you outlined:
SETTING
Tax Class-Taxable Goods
Tax Rate- Texas Sales Tax 8 %
New Tax Rate - Shipping Tax 0% (or valid %)
Shipping Module - UPS Tax Class = Taxable Goods (shipping tax)
Sales Tax display status - 1 (display even when 0)
Split Tax - on
RESULT CUSTOMER IS TAX EXEMPT:
Sales Tax = 0.00% (Texas Sales Tax =0.00% does not appear)
RESULT CUSTOMER IS TAXED:
United Parcel Service (1 x 1.25lbs) (Ground): $12.81
Sales Tax: 0.00% <--this is the 0.00% tax
Texas Sales Tax (8%): $1.38 <--tax for the item
Sales Tax + Texas Sales Tax (8%): $1.02 <--tax on shipping
This may not work as it would cause some confusion I think.
I will check to see if this occurs on a fresh install of zencart with the tax exempt module installed.



but since they don't apply to this customer they should not show:
