Admin states page
This is where you will define the states / counties / provinces that will appear on checkout as well as setting their properties for attributes like tax and free shipping. They are also editable and it is possible to add more to the list (version 6.2 minimum required).
You can update all state attributes at one time by selecting the box next to the State Name and entering the details in the "With selected do..." table. Alternatively you can click on the modify button next to each state to make the changes.
This is the name of the state as it will appear on checkout
Only enable those states that you are planning to ship to.
If a state is liable for tax you can set the percentage here.
This stands for Free Shipping Applies and is used in conjunction with the free shipping discount / coupon feature. Although this is a global setting, in Version 6.2 you can make products free shipping exempt through the admin products pages.
This is used in conjunction with weight and price based shipping only (not if you are using UPS, USPS or FedEx online rates) and will only come into play if you have chosen to split your states into separate zones. In the admin zones page you would set up your shipping rules and this is where you assign those zones to the states you ship to.
States for country
From Version 6.2 you can choose to show states / counties / provinces from other countries on checkout as well as being able to edit / add to those entries.
Select the country you want to enable states for and you can then choose if you want the states / counties / provinces to be listed dynamically on checkout when that particular country is selected.
If you don't want the State / county / province field to be required on checkout, choose the option "Not Required" in the Load States drop down.
You can also edit and add to the states available as well as entering a states list for a country that doesn't have a list available by default.