Taxable products on a per State variable

This is what I am trying to accomplish:

6% tax added to all purchases where the delivery address is in the state of Michigan USA

I have 2 country options in class_search.php

[code title=””]$GLOBALS[‘core_country_list’] = array(‘PS’ => ‘Please Select’,’US’ => ‘United States of America’);

$GLOBALS[‘core_state_list’] = array(

‘PS’ => ‘Please Select Country’,
‘US’ => ‘Alabama|Arkansas|Arizona|California|Colorado|Connecticut|Washington, D.C.|Delaware|Federated States of Micronesia|Florida|Guam|Georgia|Iowa|Idaho|Illinois|Indiana|Kansas|Kentucky|Louisiana|Marshall Islands|Massachusetts|Maryland|Maine|Michigan|Minnesota|Missouri|Mississippi|Montana|North Carolina|Northern Mariana Islands|North Dakota|Nebraska|New Hampshire|New Jersey|New Mexico|Nevada|New York|Ohio|Oklahoma|Oregon|Pennsylvania|Palau|Puerto Rico|Rhode Island|South Carolina|Samoa|South Dakota|Tennessee|Texas|Utah|Virginia|Virgin Islands|Vermont|Washington|Wisconsin|West Virginia|Wyoming’,
);[/code]

Currently the tax is added as soon as I choose USA from the Country drop down regardless of state selection.

Here are my settings

Product is taxable (attachment #1)

Tax & Shipping Region set up (attachment #2)
Country USA, state Michigan

Tax Options set up (attachment #3)
Using Country/State tax

As a customer if I choose “Please Select” as a country option tax is removed.
As soon as I select USA the tax is added.
Changing the state selection does nothing.

I have even tried added a NO TAX region and adding all states bar Michigan and setting the tax to 0%.

Can anyone provide some insight?

Thanks you in advance.