How do I invoice taxable items to tax-exempt customers?

At times, you may need to temporarily mark a taxable item as nontaxable when invoicing a tax‑exempt customer—such as a charitable organization. This topic explains how to change an item’s taxable status on an invoice and how to record a customer’s tax‑exempt status.

Temporarily changing taxable status on an invoice

1. Open the invoice:
   Go to Business > Invoices & Estimates and create or open the relevant invoice.

2. Remove the tax indicator:
   Delete the T in the Tax column for the taxable item. This change applies only to that invoice; the item remains taxable on all other invoices.

3. Confirm the update:
   Verify that the tax amount is no longer calculated on the invoice.

Recording tax‑exempt status note in customer records

For customers that are frequently tax‑exempt, you can add a note in their customer record to help prevent future errors.

1. Open the customer record:
   Navigate to Business > Customers. Locate and open the record for the tax‑exempt customer.

2. Add a note:
   In the Notes field under Miscellaneous, enter details indicating that the customer is tax‑exempt. Include their tax‑exempt ID if available.

3. Save the record:
   Save your changes to update the customer information.

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