Special Tax Regime
In version 2.2.35 we take a step forward. In Tax Rules page you will find a new icon next to countries like Spain, Italy, United States, Germany, France etc. that opens a modal from which you can define more specific tax rules based on states/regions.
Not only you can insert Level 1 and Level 2 tax rates but also insert names for such taxes.
In the screenshot below you can see how to set a "VAT Free" state by simply leaving zero. In this case tax name can be left empty.