Make sure the calculation is not Default to new employees down in the lower right hand corner of 5-3-1.  Pull up the calculation and remove the checkmark and save.  That should work.

That was the first thing I looked at.

No luck

Have you already removed the calculation from the employee before you took a screenshot? 

It has never been part of the employee calculations.  Some time back - at least a year ago, this started happening after a software update.  Even though it is NOT part of any calculations, it defaults to new employees WITHOUT that selection.

Each pay period I delete the calculation and save it and re-calculate it and it returns.  I repeat this over and over.  After a month or two it seems to finally get the idea this employee should not have State Income and stops, util the next new employee

I suggest you leave their home state income tax on their setup, and just set it to Active?  No.

This is from Sage help:

Although some states do not have state income tax, state income tax calculations must be set up:

• In the 5-3-1 Payroll Calculations window, so that reports based on state wages are accurate and print correctly.
• In the 5-2-1 Employees window for employees, so that payroll calculations compute correctly

You can leave it in there and active. If the state does not use withholding, there will be no tax table for it in the program and it will never calculate on the payroll records for that state.

I well understand this.

I can leave trash sit by my house as it won't get up and walk away.

Or,  I can find a way to eliminate the trash

If there is no reason for State Income Tax to calculate, AND, the calculation is not allocated to an employee

THEN, the computer should not be calculating it

If it is calculating and allocating a tax where it does not belong, along with providing an error message the necessary deductions have not been entered, most people would understand there is a problem.

So far I am to understand I must live with the garbage since it is just an inconvenience to me.  Much better solution that fixing the problem

I have replicated your setup based on the information you posted here and have not been able to duplicate the issue as you have described it. I would recommend you contact Sage Support so they can take a closer look at your setup. 

Ha Ha Ha  Sage Support?  Non-Existent, that's why I try to use the community support.  thanks anyway