Product tax classes can be created and assigned according to the tax requirements of the product. For example, food might not be taxed (or might be taxed at a different rate). If your store charges an additional tax on shipping, you should designate a separate product tax class for shipping.

To define a product tax class:

1.

On the Admin menu, select Sales > Tax > Product Tax Class.

2.

In the upper-right corner, click the Add New button.

3.

Enter a Class Name for this tax class.

The new tax class now appears as a Tax Class option for product prices.

4.

When complete, click the Save Class button.