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Chapter 14. Collecting and Paying Sales Tax > Taxable Versus Nontaxable Sales

Taxable Versus Nontaxable Sales

If an item you are selling is not subject to sales tax (services such as consulting, legal, or accounting services often are not subject to sales tax), set up this item as nontaxable when it is created (refer to Figure 14.6). In addition, you can double-check your customer invoice to make sure that there is no Tax reference across from the item, thereby ensuring that no tax is charged.

To determine which items are subject to sales tax, contact your taxing authority. Usually this is the department of revenue for the state in which you live. Each state has different rules regarding which items are subject to sales tax, and sometimes different rates apply to different types of items.


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