Yes, that is correct, that rule looks like it should work
the tax rule is case sensitive.
you could edit the code to set the session variable on the confirm page:
<?php
if (!session_id()) session_start();
if($_SERVER["REQUEST_METHOD"] == "POST") {
$_SESSION["eCartCheckoutForm_shipping_city"] = "".((isset($_POST["shipping_city"]))?$_POST["shipping_city"]:"") ."";
}
?>
to convert the string to lower case:
<?php
if (!session_id()) session_start();
if($_SERVER["REQUEST_METHOD"] == "POST") {
$_SESSION["eCartCheckoutForm_shipping_city"] = "".((isset($_POST["shipping_city"]))?strtolower($_POST["shipping_city"]):"") ."";
}
?>
and use lower case in the tax rules to work around it.