If you do not track taxes in Accounts Receivable, the Tax tab will not be available for contract items. See How do I set up taxes in Accounts Receivable? for information on how to set up taxes in Accounts Receivable.

In the Contracts application, you can specify tax groups for different contract items. Each contract item can have a different tax group and tax exempt status.

Note: For a contract-based contract, only select an exempt status and tax group for the Total Billed section. For a cost-based contract, each cost type can have its own tax exempt status and tax group. Repeat steps 3 and 4 for each cost type.

Follow these steps to add the tax group to your contract items:

1. In the Contracts application, from the File menu, select Open Contract. Select your contract from the list and click [OK].
2. Select the appropriate contract item and select the Tax tab.
3. From the Tax exempt status list, select the appropriate option.
4. Click  for the Tax Group section, and select the appropriate tax group.
5. From the File menu, select Close to close the contract after selecting tax groups for all your contract items.

Note: If you are tracking taxes, a tax group is required on each contract item, even if all items are non-taxable.