How you set up your sales tax and what's required of your business really depends on where you're located.  City, State, County, and Country!  I would recommend calling your local government office to find out what the sales tax rates are for each and where you're required to collect sales tax.  Once you know that, you can set up your sales tax in Square.  Square does keep track of taxes collected (as well as Gross Sales) in reports so that you'll know what to file for next year's tax season.