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In my store i set shipping rates for individual states and countries based on zipcodes. Pls guide me what i select in the stage of tax class.

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Product Tax Class is a type of Product that is being purchased. When you create a Product, you will assign a Product Tax Class to that Product.

Magento comes with two Product Tax Classes:Taxable Goods and Shipping.

The class Shipping is applied to shipping charges because some places charge sales tax on shipping. If your customer's sales tax is different for different types of Products, then you will need to create a Product Tax Class for each type of Product.

You can refer below links for more information

  1. link
  2. link

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