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https://coolblueweb.com/blog/configuring-shipping-taxes-in-magento/

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This post is specifically intended for store owners who sell taxable items online and ship via one of the common, United States shipping carriers.  Are you looking for additional assistance with your shipping taxes?  Let us help!  Check out our Magento page!

It’s a question frequently asked amongst eCommerce store owners: “Do I include tax on my shipping charges?” Unfortunately, this isn’t a case where there’s a simple yes or no answer. The laws change from state to state.

If you’re shipping within state, then it’s possible you should be paying and charging taxes on your shipping costs. It really depends on the specific tax rules of the state you’re shipping within.

This graphic demonstrates states that do and do not charge tax on shipping. Please be certain to double check your own state for the most current information, because tax laws do change with time.

But, how do you set up your Magento store to charge taxes on shipping if you’re in a state with that requirement? Fortunately, Magento makes it simple for you. (Please note: these instructions are for the Community Edition.)

  • Navigate to STORES > Settings > Configuration then expand the SALES panel and select Tax
    • Expand the Tax Classes panel
      • In the Tax Class for Shipping drop-down menu you will want to select one of the following options:
        • “None”
        • “Taxable Goods”
        • “Shipping”
        • “Tax Exempt” 
      • You’ll see that one of the fields is a Shipping Prices drop-down menu. This is where you can choose whether you would like to charge tax for shipping. 
      • Blog_Post Country
      • Blog_Post State
      • Blog_Post Post Code 
      • Display Product Prices In Catalog:
        • “Excluding Tax”
        • “Including Tax”
        • “Including and Excluding Tax”
      • Display Shipping Prices:
        • “Excluding Tax”
        • “Including Tax”
        • “Including and Excluding Tax” 
    • Display Prices:
      • “Excluding Tax”
      • “Including Tax”
      • “Including and Excluding Tax”
    • Display Subtotal:
      • “Excluding Tax”
      • “Including Tax”
      • “Including and Excluding Tax”
    • Display Shipping Amount:
      • “Excluding Tax”
      • “Including Tax”
      • “Including and Excluding Tax”
    • Include Tax in Order Total: “Yes” or “No”
    • Display Full Tax Summary: “Yes” or “No”
    • Display Zero Tax Subtotal: “Yes” or “No” 
    • Now, make certain to go to the upper right corner and “Save Config”

DONE!