It turns out the FedEx fees were being incorrectly calculated because the Shipping FROM settings were a ZIP code in California. I changed the shipping state and ZIP code to Colorado and a specific ZIP in Colorado. Now the tax is not being charged at all! I would guess it's because in the TAX Calculation Settings in Admin it says:
Tax Calculation Based On: Shipping Origin
What is the best way to set up tax charging everyone the same tax percentage?
When I change the:
Tax Calculation Based On: to either of the options (Shipping Address, Billing Address, Shipping origin) - it never charges tax anymore.
I remember in the old Magento I just put in the percentage somewhere (like 8.5%) and that took care of things...