I have supplied a screenshot of the issue I am running into.

I have states selected that I can charge tax in, as shown.

They should feed from the tax tables then after that for only the states I have selected. I had a post a while back that had a similar question

http://www.smith-consulting.com/Forums/forumid/1/postid/5393/scope/posts.aspx#5393

I beleieve I have this setup correctly. The user I am testing it with is NOT in the Tax Exempt Customers role (verified)

When checking out, I created a new user with a ship to of somewhere in one of my taxable states list. They are not being charged tax. Sales tax says 0%