So how do you collect sales tax for other states or do you have to for tax purposes at all?

First I'm not a tax lawyer but from what I've read here you only need to collect to people in your state.  

Most laws are if you have a presence in that state you must collect taxes for items shipped within the state.

Is there anything special I need to do to set that up? I'm in NC and only need to charge customers who are ordering from me and live in NC. Or is this something Square automatically does for me when a customer enters his/her address in NC?

Hi @etjsinger! It sounds like you're using Square's Online Store. Tax is only applied to orders shipped within your state so if you've set up tax for items, you don't need to do anything else! Tax is (automatically) not applied to Online Store orders shipped out of state. 

thank you

Yes but what about collecting federal tax??

No sales tax will be applied to out-of-state orders, @Soleluna. Outside of confirming that, I can't offer any advice on collecting taxes, so it would be best to consult a tax advisor. You state's Treasury or Dept. of Revenue site should have some resources on the topic as well!