Here's the definition of qualified higher-education expenses from Vanguard's 529 website:
These include room and board, books, supplies, tuition, and other costs at any accredited trade or vocational school, college, or graduate school in the United States or abroad. If you use 529 plan money to pay for qualified expenses, you won't owe taxes or penalties.
So, trade schools qualify and the school doesn't need to be in-state. In fact, it can be anywhere in the world as long as it is accredited. However, helping a child start a business will be a non-qualified expense.