Using the custom tax rule, you can calculate tax rate from a tax table. The tax table can be in CSV or any format you choose. The advantage of using a tax table is it makes editing tax rates quick and easy. 

The following example shows how to calculate the rate by using a sample CSV tax table from Zip2Tax. You can download a sample use table here. 

1. Upload the CSV to a public location on your site or external. Take note of the URL.
2. Under Configuration > Taxes, add a new tax method. Give it a name like "Tax table".
3. Under the Rate tab, choose Custom Rate type and Custom Rule.
4. Paste the following XSL rule in the source view.
   
   
   <xsl:transform xmlns:xsl="http://www.w3.org/1999/XSL/Transform" version="2.0">
     <xsl:template match="/">
       <!--    The following parser assumes the Zip2Tax csv file format with header on the first row. It will parse the csv file into xml that we can use to query    -->
       <xsl:variable name="table" select="unparsed-text('http://www.zip2tax.com/Website/Downloads/Sample_Tables/zip2tax_Use_Sample.csv')"/>
       <xsl:variable name="rows" select="tokenize($table, '\r?\n')"/>
       <xsl:variable name="data">
         <!--     Loop through each row skipping the first header record     -->
         <xsl:for-each select="subsequence($rows, 2)">
           <tax>
             <xsl:for-each select="tokenize(., ',')">
               <xsl:element name="col{position()}">
                 <xsl:value-of select="."/>
               </xsl:element>
             </xsl:for-each>
           </tax>
         </xsl:for-each>
       </xsl:variable>
       <xsl:variable name="city" select="lower-case(/in/salesOrder/billingCity)"/>
       <xsl:variable name="zipCode" select="substring(/in/salesOrder/billingPostalCode, 1, 5)"/>
       <xsl:variable name="taxRate">
         <!--     Try to match by exact city and zip, then by zip only and zero otherwise     -->
         <xsl:choose>
           <xsl:when test="$data/tax[lower-case(col12) = $city and col2 = $zipCode]">
             <xsl:value-of select="$data/tax[lower-case(col12) = $city and col2 = $zipCode][1]/col3 div 100"/>
           </xsl:when>
           <xsl:when test="$data/tax[col2 = $zipCode]">
             <xsl:value-of select="$data/tax[col2 = $zipCode][1]/col3 div 100"/>
           </xsl:when>
           <xsl:otherwise>0.00</xsl:otherwise>
         </xsl:choose>
       </xsl:variable>
       <out>
         <taxAmount1>
           <xsl:value-of select="$taxRate * /in/this/salesOrderDetail/(amount + discountAmount)"/>
         </taxAmount1>
         <taxAmount2>0.00</taxAmount2>
         <taxAmount3>0.00</taxAmount3>
         <taxAmount4>0.00</taxAmount4>
         <taxAmount5>0.00</taxAmount5>
       </out>
     </xsl:template>
   </xsl:transform>
   
   
   
   
   
   
   
5. Modify the XSL rule to replace the example URL with where you actually hosted your CSV file.
6. Save and test.