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Hi All
after some more reading about the wonderful subject of tax (especially lots on the tax in the many states and counties of the US) I have decided that the merchant charges per his country/state/city and it is the purchaser's responsibility to pay whatever taxes that are due in their own geographic location - sorry this may have been obvious to some people but some of the stuff I have read just doesn't make it clear :)
I'm hoping to work on Tax soon but looks like it will have to be after the next release as I'm sure it will take a bit of testing to get the basic principals right for Google and Paypal.