Apply Tax on Shipping

You can apply taxes on shipping in two ways:

Use the "Taxable Goods" tax class that will use the tax rate for your taxable products.
Use a separate shipping tax class

Using the same Tax Class as for Products

If you don't want to show Shipping Tax in a separate line in the cart or upon checkout, you will need to use the same Tax Class as taxable products. In this case the Tax Summary will show the product and shipping tax in the same line:

To enable this go to Set-up > Tax > Tax Settings and under Tax Classes set the class you want to have applied for shipping:

Using a Different Tax Rate

If you want to apply a different tax rate (for example with a higher or lesser percentage) go to Set-up > Tax > Tax Rates and create a new shipping rate following the steps in here.

Make sure to go to Tax Rules and assign the shipping rate to it:

Using a Different Tax Class

If you prefer to display the tax on separate lines you will need to create a new Shipping Tax Class and a new Tax Rule.

Make sure that you assign your Shipping Tax Rates to the correct Shipping Tax Rule and - within your Tax Settings - that you selected the correct Tax Class for Shipping.