Setting up taxes:

 

1.  Go to 'Edit Taxes' page under 'Cart Settings'.

 

 

2.  Define settings for the tax you are creating under 'Edit Tax Settings' tab. 'Default Tax Country' and 'Default Tax State' are used to calculate taxes on product page(s) before user logs in for VAT.

 

 

3.  After you complete this page, you should now have a working tax scheme setup.