rhino - if you check your site now it will calculate taxes for California. The cause for his is a known bug. In the tax rates page the ‘*’ is used as a wild card for any states or any zip-codes.
The bug is that when you edit the tax rate the value for the zip-codes has to be empty instead of the’*’ to set any zip-code, but as soon as you save the rate it puts the ‘*’ back there. The work around for now is to leave the zip code empty instead of the ‘*’ to set any zip code. we will fix this in future releases.
Thank you for testing Magento and please keep the questions coming.