Why do I need to track taxable and non-taxable sales?
To do this task
Turn on sales tax.
Go to the Lists menu and click Sales tax Code List.
Click the Sales tax Code button at the bottom of the list and then click New.
In the New Sales Tax Code window, enter a sales tax code you want to use and a description for it.
Examples of non-taxable sales tax codes
Choose whether the code is Taxable or Non-Taxable.
Change sales tax code information
Assign a sales tax code to an item
Assign sales tax information to a customer