we have an issue with our store and tax rates. We've created a taxable category for products that need sales tax, and this works well. However, when a non-taxable product is added to the cart, it is still charging tax on the shipping on these non-taxable items, which is incorrect. Is there a fix for this?
First you should make sure that you don't have the apply taxes to shipping box checked unless you need to charge taxes on shipping.
Store will apply a tax on the shipping of all the items based upon your rules for both shipping and taxes. I could be wrong but I don't think the tax calculator for shipping can separate the items based on taxable or not. I know for the clients where I have enabled taxes on shipping in the past that they were required to collect shipping tax on both taxed and non-taxed items when sent together. This of course varies from tax locale to tax locale.
You could probably try to create a new Tax Rate for the non taxable item categories with a value of 0% and make sure to check Apply to shipping box and that it is enabled.
Then after you have submitted the new tax rules you will want to grab the little pancake on the left of the main tax settings page to move your new rule above all your other rules but I am not sure if that works.