Hi consolecustoms
Aww brilliant. Have you tested this?
Yes, I have tested and this worked for me. For you it may be different if you actually charge tax on shipping but I think it should still work for you.
You will already see a difference just by starting a paypal checkout (you do not need to complete it). Checkout from your site with paypal and when transferred to paypal you will see before the changes there is not a separate tax line and the shipping and tax are combined into the "shipping/handling" line.
After this change when you get to this point in the checkout there will be a separate "tax" line and the "shipping/handling" line will display only the shipping cost.
I did complete a full paypal checkout with a real account as well just to be sure everything was OK and everything was correct in all locations and I did not receive the Error message as in the past.
I hope it works for you too.