Selecting this option in the DynamicZip Setup window will cause ZipAddressing to return the USPS Preferred City Name.
Each ZIP Code has only one USPS Preferred City Name. This one USPS city name may be valid for delivery into several different cities. Each of these other cities could have their own sales tax. In the older DynamicZip builds (prior to Build 72 Tax Schedule Selection would select a tax schedule ID for the USPS city, which could result with customers getting an incorrect tax schedule ID, in turn resulting in calculating with the wrong tax rate and/or remitting taxes for the wrong city.
As of Build 72 the Use USPS City Names option will cause the initial Tax Schedule Selection to ignore the city name altogether. If Select Default is not selected for Tax Schedule Selection in the DynamicZip Setup window and the ZIP Code is valid for multiple cities, then DynamicZip can optionally Open Schedule Lookup and/or Show Selection Message so that the user can select the correct Tax Location city's tax schedule ID.
When a tax schedule is selected for a customer address, the tax schedule's Geocode is saved to the DZ Customer Address Supplement table for use in maintaining the Tax Schedule ID for the actual Tax Location city (as opposed to the USPS city). This means that subsequent Tax Schedule Selection will know which city's tax schedule to select based on the saved Geocode.