Technically, we only calculate a tax amount to add to each buyer's cart total. You collect payment in full for those order totals, so it's still up to you to determine your actual tax liability and pay that to the relevant authorities. This help page explains our tax calculation settings:
http://www.e-junkie.com/ej/help.tax.htm
Tax calculated in our cart should override any tax settings in your PayPal account, as the latter only apply to purchase buttons and payment links provided directly by PayPal.
