How to calculate Tax on employee expense report based on the City, Province

In Oracle Expenses, we have a requirement to have the Per diem policy based on the City, Province, Canada. And our Tax rules are based on the Province. But at Expense entry level if we select the Province with City, tax is not getting calculated. However, if at the Expense entry level if we select only the province and country, tax is getting calculated. Through SR, we came to know that Tax can be calculated only based on the province and cannot be calculated based on the City.

An example for above use case:

Case 1: Expense report is getting created with location as Toronto, ON, Canada as we need to enforce policy control based on the city Toronto. Policy is getting enforced as per expectation. But once this expense is there in AP, Tax is not getting calculated