Tax Classes are set up through the Item Class record and will group tax rates together through their related Tax Class.
An Item Class can be created for various different categories, and the record displays sections to configure all of these different types of Item Classes. For Taxes, you will only need to populate the Information and Tax Class Configuration sections, as highlighted in the images below.
How to Create a Tax Class:
From the Item Classes tab page, click the New button. The New Item Class modal will open.
In the Information section, type the name of the Item Class in the Name field.
In the Business Group field, select the Business Group that the Item Class will be connected to.
Check the Is Active checkbox.
In the Tax Class Configuration section, check the Is Tax checkbox.
Click the Save button.
Your newly created Tax Class will display on the Item Class record in the Item's related list with the Default Tax Rate following the name. The default Item Price will be 0.00. Each Tax Class can only have one Default Tax Rate. Learn how to configure a Tax Rate for your Tax Class next.