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For those of you struggling with PrestaShop's poor documentation about how to set up State Taxes for merchants in the U.S., I hope this will help. It applies to PrestaShop version 1.4.6.2. I'm not positive about other versions. First, if you get freaked out when reading the User Guide about creating new tax rules, ignore that stuff. PrestaShop has created tax rules for each of the states in the U.S. You can use these default rules. The only time you will need to create new, additional rules is if you have specific city, county or other regional taxes or if you need taxes for a group of states (i.e. Arizona, California and Texas). So go into the Payment tab and then the Tax tab. Look down through it and make sure your state is listed and tax enabled. On the bottom of the page enable taxes and you probably want to enable showing them in the cart. Not much else on this page unless you want to go through the whole eco taxes thing with is covered in the user guide. Next click on the Tax Rules tab. Now read carefully. The only thing you have to do here is go down to your state in the list and click to edit only your state (or states). For this example I'm going to edit PA taxes. A new page opens. At the top of that page make sure PA taxes are enabled. Now click on the North America tab, just below that. You will see the United States and a drop down. The drop down will include "No Taxes" and another list of all of the states. By default it probably says "No Taxes". Leave it that way. If you are tempted to click on your own state, in this case PA, then every buyer in the U.S., regardless of their location, will be charged PA tax. As of Feb. 2012 that is not appropriate. All of the drop downs in the North America tab should say "No Taxes". Don't be tempted to make this harder than it is. Now all you have left is in the Catalog tab. Every time you create a new Product, under the Info tab, about half way down the page is an option for "Tax Rule" click on your state in the dropdown menu. That will enable the calculation of taxes for your state, only for residents of your state. Again, as of Feb 2012 that is the way online taxes should be calculated.