Follow below rules and guidelines

• If you’re running an online store, then set up the countries you will be shipping to.
• Set up the tax rates in the countries and regions to which you will be selling and shipping your products:
• If you’re in the United States, then choose automatic tax settings or manually specify the rates for state, county, and municipal taxes, including shipping taxes.
• If you’re in Canada and need to charge tax, then enter your tax registrations.
• If you’re not in the United States or Canada, then use the default values or specify the rates for countries and their regions. You also specify whether you will charge taxes on shipping.
• If you sell digital products, then set up the taxes that apply to these items.
• Override tax rates or exempt products from taxes where necessary.

As you set up taxes, you can access and review your settings on the Taxes page in your admin account.