If a store owner must collect taxes on any product, you must setup the tax rate. Generally, you should be collecting taxes in any state where the item is shipping from. However, it is up to the you the store owner to know where should be collecting taxes.
Login to the control panel.
Click Online Store.
Click Sales Tax.
Click to Add New Tax Rate.
Select the state you would like to add a sales tax rate for.
Select the Country.
Enter the tax rate (ie.: 8.25)
Turn the Tax Rate ON or OFF using the "Apply Tax for this State". Select YES.
Click Save Changes.
The tax rate has now been added to the store. You can add as many tax rates as needed. To delete a tax rate, just use the DELETE link.
To edit a tax rate, click on the state, make the changes, then click Save Changes.