1. To set item-level tax, including tax-free items, click the Items button on the Items tab of Office.
2. Select the item you’d like to change.
3. On the item screen, click the Turn-on item-level tax button. A blue check will appear.
4. Enter the tax rate in the Item-level tax rate box.

Item-level taxes will override and replace any location taxes set in the system. Set to 0% to make the item tax-free.