Go to Organization Settings > Integration > Tax Setup. To create a new tax rule, click on the "Add Tax Rule" button. Enter the area that the tax rule covers, for example "Texas" (state) or "Canada" (country) and the tax rate in percentage. You may define tax rules down to a city or zip code. If you leave the area blank, the tax rule is considered to apply globally.
Note that the area is NOT the same as the tax jurisdiction. For example, if you are in New Zealand and req...