Prior to Store 2.0 there was the option to have a product be tax free by selecting the option in the channel entries product details field. Why has this been removed and what is the best way to accomplish this task now?
This has been removed from Store 2 in favour of category based taxes, which are much more flexible.
If you haven't already done so, I recommend reading the Store 2.0 Upgrade Notes, which covers this topic (as well as many other important points when upgrading from 1.6 to 2.0):
Store 2 now allows for multiple taxes per order, and individual taxes may be applied to specific categories of products (using the built-in ExpressionEngine entry categories). Because of this more powerful tax system, the old “tax exempt” option has been removed from the publish page. If you have previously configured “tax exempt” products, you must create a new category for them which does not have any taxes applied to it instead.
In the Store settings, you can now define tax settings by category, so you can set up a new native EE category group for your products and define which categories will trigger which tax rate.
I found this a little confusing at first, but it makes it more flexible than simply taxable and non-taxable.
Does the category listing choose for applying tax choose to apply it on an 'or' basis? For example, I choose two categories for my product; 'scotland' and 'kids' and if both are checked in the category list, it should apply a certain tax %.
What is happening now is that if either category is ticked, it applies the %, which is no good to me based on the limitations I have in my product listing. Unless I am missing something?