Item Tax Types
Item Tax Types define the taxability of products and services. Where tax groups attach to people, item tax types attach to the items themselves, deciding whether something is fully taxable, partly exempt or exempt altogether.
Where to find it
Go to Taxes Module > Item Tax Types.
Item Tax Types Inquiry List
| Column | Description |
|---|---|
| Description | The name of the tax category — Regular Taxable, Exempt Goods, Luxury Items. |
| Fully Tax-exempt | Yes or No. Yes means no tax is ever applied to these items, whatever the customer's tax group says. |
Adding or Updating an Item Tax Type
| Field | Description |
|---|---|
| Description | A descriptive name. It appears in the dropdown on the New Item screen. |
| Is Fully Tax-exempt — Yes | A master shortcut for globally tax-free items such as basic groceries or exports. It overrides everything else. |
| Is Fully Tax-exempt — No | The item is generally taxable, but may be exempt from specific individual taxes. |
This screen uses reverse logic compared to Tax Groups. There you tick the taxes to include; here you tick the ones to exclude. Reading it the wrong way round produces exactly the opposite tax treatment.
Managing Specific Exemptions (The Filter Logic)
When an item is not fully exempt, a checklist appears that filters out individual taxes.
| Element | Meaning |
|---|---|
| Tax Name & Rate | Every individual tax component defined in the system. |
| Is Exempt — checked | This tax is not charged on the item. |
| Is Exempt — unchecked | The tax is calculated, provided it is also part of the customer's tax group. |
Management Tools
| Tool | What it does |
|---|---|
| Add New | Creates a classification for items with their own tax requirements. |
| Edit | Changes the description or the exemption checklist. |
| Delete | Blocked while items still use the type. |
| Show Inactive | Reveals retired types. |
Important Note
Both sides have to agree before tax is charged: the customer's tax group must include the component, and the item's tax type must not exempt it. That is how a zero-rated product stays zero-rated on a fully taxable customer's invoice.
Related pages
- Tax Groups — the customer side
- Taxes — the components
- New Item — where a type is assigned