To use the method you've chosen, you would need to do:
elseif($shipstate == 'AR' || $shipstate == 'IA' || $shipstate == 'IL') {
A way to do a bit less typing is:
elseif(in_array($shipstate, array('AR', 'IA', 'IL')) {
PS: Please make use of the
bbcode tags[/url] when posting code samples here.