There are no tax rules set up in paypal. The only tax rule was the one I set up in powerstore. No tax was showing on any items in the cart after I set up the tax rule. One of the items was taxable and the other was not. The nontaxable item was taxed when the person went to paypal to pay. I double checked to make sure that the checkbox for non taxable was ticked for the item that was taxed.