Create a Taxcode Record to be used for all geographic areas in which you will not be required to collect sales tax. 

Since the Tax Rate Determination system finds the sales tax rate based on the zip code to which merchandise is being shipped, zip codes in which you are not required to collect taxes should be assigned a Taxcode record with a zero rate.  This ensures that all sales order and invoice tax information is present in the system whether the sale is taxable or not.  Cove recommends that you create a Taxcode record such as "NO TAX" for this purpose and that you assign this Taxcode to all zip codes in which you will not be required to collect sales taxes.  If this Taxcode is used properly a RETAIL (normally taxable) customer will not be charged sales tax on shipments delivered inside of locations where they are not required to collect sales tax.

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Assign the correct Taxcode record to each zip code in the Zip Code File.