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.
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.