Tax can be automatically applied to local orders. Under Settings > Company Settings > Company Name > Toolbox > Taxes - create tax percentage per state, or even per zip code, by clicking Add New Tax. See the TaxJar page on how to automatically update tax on orders and submit tax filings.
This setting may also affect wholesale orders and website orders. Be aware that this can often lead to a double charge of tax on the order because tax is typically configured on the website. Use the following client settings to control to which order type the tax rate is applied:
Order Management >