Expense Reports imported to Payables calcuating tax

We have an expense report for a new employee (employee was created in system after we upgraded to R12) that when it was processed in Accounts Payable the transaction calculated tax.  Are the setups in either Accounts Payable or EBTax that we need to set so that this won't happen in the future.  We do not want the system to be calculating tax on expense reports.  The tax is showing as "non-recoverable tax".