Select this option if sales tax is not calculated for the selected sales tax code for the sales tax group. In some cases, ...

Select this option if sales tax is not calculated for the selected sales tax code for the sales tax group. In some cases, the tax base must be calculated and recorded, although no tax is calculated. To make sure that no tax is calculated for a specific customer or vendor, select this option for the sales tax group that you use for that customer or vendor. If the tax exemption is related to the item (a single occurrence for the customer or vendor), create a sales tax code with 0 entered in the Percentage/Amount field. Then create a sales tax group that contains this sales tax code and an item sales tax group that contains the same zero-tax sales tax code. Use these sales tax groups on the transaction.
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