I did talk to support - I found out that it is now tied to the option "I sell this product/service to my customers." If this is checked, the item is set to taxable, otherwise it is set to untaxable. This works, and makes sense. What doesn't make sense is that you took away the ability to set the TAX CLASSIFICATION - the tax classification is very important on services because, for example, SAAS is taxed differently in some places. I believe it is a bug that you have removed the ability to set the tax classification. This is what the box looked like: