Is it a US state?  When you enter the Zip code it should auto fill the state

Yes it is a US State, I did reenter the zip code but the state did not autofill

curious, what is the zip code?

zip code is 15901, Johnstown, PA.

The zip code needs to be valid in Library Master Module --> Setup Menu --> Zip/Postal Code Maintenance.  It is in my demo data.  Try adding it in Zip Code Maintenance.  Country Code, Zip/Postal Code, City and State then accept the transaction. 

Thank you, We have USA and US setup in Sage and this zip code was in USA so I added it for US as well and now the State is populating for that Zip