Tax State is an optional Field on Tax Status which can be used to automatically select the correct Tax Status by matching the Shipping State entered on a Quote, Order, or Invoice.
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Big Business 11.18 adds Tax State to the Tax Status for testing. Currently, it only works with TaxJar. This feature can be disabled by clicking the Disable Smart Tax checkbox found on the Advanced tab of the Company card.
This feature may be useful if you do not use Contacts for multiple Ship-To's, which can be assigned their own Tax Status.