The purpose of asset allocation is to attain the highest return for the lowest risk.
Taxes effect the return.
It seems to me that you need to make additional and separate return assumptions based on the tax impact of the holdings. Tax free investments will lower taxes but at the cost of return. High growth, low income investments may accomplish even greater tax and risk efficiency. Minimizing taxes should never be the goal in itself otherwise the answer would simply be to impoverish the client. We need to focus on how much the client keeps after taxes and the risk that is required to attain that return.