Marking items you sell as taxable

You can set up to distinguish between taxable and non-taxable items when you make a sale. When you add an item to your Item list, you can indicate whether you charge tax for the item. QuickBooks remembers this information and automatically shows whether or not an item is taxable when you enter the item on a sales form.

To set up an item as taxable:

  1. Choose Lists > Items.
  2. Select the item you want to mark as taxable and choose Edit from the Action pop-up menu ( image). Or choose New to enter a new item.
  3. Select the Taxable checkbox.

To apply tax to a non-taxable item:

  1. On a sales form, enter the item as you normally would.
  2. Click the Tax column (to the right of the Amount column).

What happens

When you enter a taxable item (or click next to the amount of a non-taxable item), a “T” appears beside the item amount. If the customer is taxable, QuickBooks includes all items marked with a “T” in its tax calculation.