Shipping Method is a Microsoft Dynamics GP field. You can refer to the Microsoft Dynamics GP documentation for information on shipping methods. The thing of primary interest in regards to sales and purchase tax is the Shipping Method's Shipping Type: Pickup or Delivery. The shipping type can be used by Microsoft Dynamics GP when assigning a transaction's tax schedule.
NOTE: This article was written with the assumption that the Use Shipping Method When Selecting Default Tax Schedule option is selected.