I was sure I understood this but we are having issues.  In AR customer entry, the Taxable lookup is to the "Tax Group" record.  In the AP vendor entry, I thought the lookup was to the "Tax Code" record.  
 We have a tax group CART with 7.25% and CA with 0% in the "Tax GRoup" record.  Customers with CART have tax added to sales orders, those with CA do not.  (The fact that we still have CA in groups is a legacy issue from when we first set up accounting in DBA that has never been fixed.)
 We have a tax code CA with 7.25% in the "Tax Code" record, and vendors with CA in the tax field have tax added to the PO.  But when I do a lookup in the vendor entry for " tax group" it does go to the "TAx Group " record which has 0 for CA.
Have I confused everyone yet?  
Can anyone clarify this for me? ???