If you're doing business in the United States and you have a physical location in a state you need to be collecting sales tax for that state. You can find more information on whether or not you need to be collecting sales tax at the U.S. Small Business Administration site. Different counties have different tax rates. Today we're just covering the taxes statewide.
The taxation rules that come with Drupal Commerce out of the box calculate VAT or sales tax for each line item without any conditions, so every item in the order is taxed. This works for many situations but if you have items which need to be tax exempt you're in trouble. But there is a relatively painless way around it using some rules and fields.
To start with create a new field on your product entity called Tax Exempt. Set it to be a Boolean, single on/off checkbox.