You can create tax rules based on States or Countries. If you set a tax rule based on a state, visitors to your website from that state will be charged the tax amount that you set. If you set a tax rule based on a Country any visitor to your website from that Country will be charged the tax amount that you set.

1. Click on the 'Tax Rules' icon on the administration home page
2. Click the button on the bottom right side that says 'Add New Tax Class'
3. Description - This is the type of tax that you are creating
4. Click the button on the bottom that says 'Add New Tax Class'
5. Click on the tax class that you have just created
6. Click the button on the right side that says 'Add New Tax Rule'

The first option at the top of the page will set a tax rule for a state.
The second option will set a tax rule for an entire country.
7. Select a state or country from the drop down menu
8. Select the the percentage that you would like the tax rule to charge
9. Click the 'Add Tax Rule' button