How to disable tax being charged on shipping in WooCommerce?

Question

I have configured my Woo-based shop to NOT charge any taxes on shipping:

I do have a table for Zero Tax rate configured:

however it still does during the checkout:

as is apparent in the following order breakdown:

Am I doing something wrong?

Given some users also complained about similar behavior, is this a known WooCommerce issue?

How does one overcome it?

Or is this inability to configure really a feature, as is explained here, for example, and as such is something that we have to agree and live with?

For reference, here's my system report:

`
### WordPress Environment ###

WordPress address (URL): https://example.com
Site address (URL): https://example.com
WC Version: 4.8.0
REST API Version: ✔ 4.8.0
WC Blocks Version: ✔ 3.8.1
Action Scheduler Version: ✔ 3.1.6
WC Admin Version: ✔ 1.7.3
Log Directory Writable: ✔
WP Version: 5.6
WP Multisite: –
WP Memory Limit: 256 MB
WP Debug Mode: –
WP Cron: ✔
Language: en_US
External object cache: ✔

### Server Environment ###

Server Info: LiteSpeed
PHP Version: 7.4.12
PHP Post Max Size: 8 MB
PHP Time Limit: 30
PHP Max Input Vars: 1000
cURL Version: 7.61.1
OpenSSL/1.1.1c

SUHOSIN Installed: –
MySQL Version: 5.5.5-10.3.17-MariaDB
Max Upload Size: 8 MB
Default Timezone is UTC: ✔
fsockopen/cURL: ✔
SoapClient: ✔
DOMDocument: ✔
GZip: ✔
Multibyte String: ✔
Remote Post: ✔
Remote Get: ✔

### Database ###

WC Database Version: 4.8.0
WC Database Prefix: wp_
Total Database Size: 15.10MB
Database Data Size: 12.63MB
Database Index Size: 2.47MB
wp_woocommerce_sessions: Data: 0.06MB + Index: 0.02MB + Engine InnoDB
wp_woocommerce_api_keys: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_woocommerce_attribute_taxonomies: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_woocommerce_downloadable_product_permissions: Data: 0.02MB + Index: 0.06MB + Engine InnoDB
wp_woocommerce_order_items: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_woocommerce_order_itemmeta: Data: 0.08MB + Index: 0.09MB + Engine InnoDB
wp_woocommerce_tax_rates: Data: 0.02MB + Index: 0.06MB + Engine InnoDB
wp_woocommerce_tax_rate_locations: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_woocommerce_shipping_zones: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_woocommerce_shipping_zone_locations: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_woocommerce_shipping_zone_methods: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_woocommerce_payment_tokens: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_woocommerce_payment_tokenmeta: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_woocommerce_log: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_actionscheduler_actions: Data: 0.06MB + Index: 0.11MB + Engine InnoDB
wp_actionscheduler_claims: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_actionscheduler_groups: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_actionscheduler_logs: Data: 0.06MB + Index: 0.03MB + Engine InnoDB
wp_aws_index: Data: 0.42MB + Index: 0.27MB + Engine InnoDB
wp_commentmeta: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_comments: Data: 0.05MB + Index: 0.09MB + Engine InnoDB
wp_links: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_mailchimp_carts: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_mailchimp_jobs: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_options: Data: 3.05MB + Index: 0.22MB + Engine InnoDB
wp_postmeta: Data: 4.52MB + Index: 0.47MB + Engine InnoDB
wp_posts: Data: 3.52MB + Index: 0.14MB + Engine InnoDB
wp_termmeta: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_terms: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_term_relationships: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_term_taxonomy: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_usermeta: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_users: Data: 0.02MB + Index: 0.05MB + Engine InnoDB
wp_wc_admin_notes: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_wc_admin_note_actions: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_wc_category_lookup: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_wc_customer_lookup: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_wc_download_log: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_wc_order_coupon_lookup: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_wc_order_product_lookup: Data: 0.02MB + Index: 0.06MB + Engine InnoDB
wp_wc_order_stats: Data: 0.02MB + Index: 0.05MB + Engine InnoDB
wp_wc_order_tax_lookup: Data: 0.02MB + Index: 0.03MB + Engine InnoDB
wp_wc_product_meta_lookup: Data: 0.02MB + Index: 0.09MB + Engine InnoDB
wp_wc_reserved_stock: Data: 0.02MB + Index: 0.00MB + Engine InnoDB
wp_wc_tax_rate_classes: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_wc_webhooks: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_yith_wcwl: Data: 0.02MB + Index: 0.02MB + Engine InnoDB
wp_yith_wcwl_lists: Data: 0.05MB + Index: 0.03MB + Engine InnoDB

### Post Type Counts ###

attachment: 153
custom_css: 1
customize_changeset: 139
nav_menu_item: 4
page: 13
post: 2
postman_sent_mail: 119
product: 38
product_variation: 84
revision: 62
shop_order: 30
shop_order_refund: 1

### Security ###

Secure connection (HTTPS): ✔
Hide errors from visitors: ✔

### Active Plugins (20) ###

AJAX Search for WooCommerce: by Damian Góra – 1.8.1 – Installed version not tested with active version of WooCommerce 4.0
CMB2: by CMB2 team – 2.7.0
Facebook for WooCommerce: by Facebook – 2.2.0 – Installed version not tested with active version of WooCommerce 4.0
Jetpack by WordPress.com: by Automattic – 9.2.1
Kadence WooCommerce Email Designer: by Kadence WP – 1.4.4 – Installed version not tested with active version of WooCommerce 4.0
Kirki Customizer Framework: by David Vongries – 3.1.6
Google Ads & Marketing by Kliken: by Kliken – 1.0.6 – Installed version not tested with active version of WooCommerce 4.0
LiteSpeed Cache: by LiteSpeed Technologies – 3.6
Mailchimp for WooCommerce: by Mailchimp – 2.5.0 – Installed version not tested with active version of WooCommerce 4.0
Post SMTP: by Yehuda Hassine – 2.0.16
Real-Time Find and Replace: by Marios Alexandrou – 4.0.2
Really Simple SSL: by Really Simple Plugins – 4.0.5
Simple Sales Tax: by TaxCloud – 6.3.2 – Installed version not tested with active version of WooCommerce 4.0
TWP Import Export: by Themes4WP – 0.1
TWP Shortcodes: by Themes4WP – 1.0.13 – Installed version not tested with active version of WooCommerce 4.0
Product Image Zoom for WooCommerce: by wpbean – 1.04.2 – Installed version not tested with active version of WooCommerce 4.0
WooCommerce Shortcodes: by WooThemes
Claudio Sanches – 1.0.0 – Installed version not tested with active version of WooCommerce 4.0

WooCommerce: by Automattic – 4.8.0
Woorise: by Woorise – 1.2.2
YITH WooCommerce Wishlist: by YITH – 3.0.17 – Installed version not tested with active version of WooCommerce 4.0

### Inactive Plugins (4) ###

Advanced Woo Search: by ILLID – 2.17 – Installed version not tested with active version of WooCommerce 4.0
Akismet Anti-Spam: by Automattic – 4.1.7
Better Search Replace: by Delicious Brains – 1.3.4
Search By SKU - for Woocommerce: by Unroll Digital – 0.7.1 – Installed version not tested with active version of WooCommerce 4.0

### Dropin Plugins (1) ###

object-cache.php: object-cache.php

### Settings ###

API Enabled: –
Force SSL: –
Currency: USD ($)
Currency Position: left
Thousand Separator: ,
Decimal Separator: .
Number of Decimals: 2
Taxonomies: Product Types: external (external)
grouped (grouped)
simple (simple)
variable (variable)

Taxonomies: Product Visibility: exclude-from-catalog (exclude-from-catalog)
exclude-from-search (exclude-from-search)
featured (featured)
outofstock (outofstock)
rated-1 (rated-1)
rated-2 (rated-2)
rated-3 (rated-3)
rated-4 (rated-4)
rated-5 (rated-5)

Connected to WooCommerce.com: –

### WC Pages ###

Shop base: #7 - /shop/
Cart: #8 - /cart/
Checkout: #9 - /checkout/
My account: #10 - /my-account/
Terms and conditions: #627 - /terms-and-conditions/

### Theme ###

Name: MaxStore Pro Child
Version: 1.0.0
Author URL: http://example.com/
Child Theme: ✔
Parent Theme Name: MaxStore PRO
Parent Theme Version: 2.5.0
Parent Theme Author URL: http://themes4wp.com
WooCommerce Support: ✔

### Templates ###

Archive Template: Your theme has a woocommerce.php file
you will not be able to override the woocommerce/archive-product.php custom template since woocommerce.php has priority over archive-product.php. This is intended to prevent display issues.

Overrides: maxstore-pro-child/woocommerce/emails/email-order-details.php

### Action Scheduler ###

Complete: 161
Oldest: 2020-11-23 15:27:44 -0500
Newest: 2020-12-20 00:28:53 -0500

`

Answer 1

You need to filter the shipping methods and set tax = 0 for the rate you want. (e.g. 'flat_rate:1')

add_filter( 'woocommerce_package_rates', 'custom_shipping_rate', 20, 2 );
function custom_shipping_rate( $rates, $package ) {
    $shipping_methods = WC()->session->get( 'chosen_shipping_methods' );
    $shipping_method = $shipping_methods[0]; 
    if($shipping_method =='flat_rate:1') {
        foreach( $rates as $rate_key => $rate ){
            $rates[$rate_key]->cost = 0;
            $taxes = array();
            foreach ($rates[$rate_key]->taxes as $key => $tax){
                if( $rates[$rate_key]->taxes[$key] > 0 )
                    $taxes[$key] = 0;
            }
            $rates[$rate_key]->taxes = $taxes;
        }
    }
    return $rates;
}