This article describes creating sales tax rates in X-Cart.
First create a new zone first, BEFORE you create the tax.
Steps below:
In the X-Cart admin menu, under "Inventory" select the "Destination zones" link.
There you will see the existing zones listed and an "Add new..." button.
Select the "Add new..." button Give the zone a name, select a country and state and save it.
Then go back to the "Taxing system" link create the tax and select the new zone for the tax to apply to.
It's important that you create the zone first, prior to creating the tax or the system won't recognize
the taxing system it needs to use.