It is located on the printhead carriage. If the sensor is activated you will see a quick flash near the face of the printhead. It's been awhile and do not recall if US Screen had that feature removed, but I am almost positive that the paper suggestion will work for you. I just do not recall where the machine stops to look for the paper. The distance of the paper to the printhead is also very important. Billy Lazo is a very good tech for the TJet's and scans the forums every so often. Maybe he can jump in and give us his input...
Where are you located? I am in AZ and should be in bed by now, but feel free to call me in late morning and can go over it with you on the phone if you continue to have problems.
Best,
323-679-8179