Sales tax not added after State tax rate is set

[HarmlessDave]

I have set the California sales tax rate in the settings for our sandbox business account:

State/Zip Code Tax Rate Apply Tax to Shipping ? Status
California 8.700% No Active

The buyer sandbox account has an address in California:  1 Main St, San Jose, CA 95131 United States

The JavaScript SDK code on our web page does not set any tax amount override:

  paypal.Buttons({
    createOrder: function(data, actions) {
      // Set up the transaction
      return actions.order.create({
        purchase_units: [{
          amount: {
            value: price			
          },  
		  invoice_id: invoice_id,
		  description: description
        }]

Despite this, the buyer sees the plain $79 price (the value of the "price" variable) instead of having the 8.7% tax added to the order total.

Am I missing something, like an undocumented "taxable: true" flag?