The Taxable flag (Y/N) is maintained in the Inventory Master file and it determines if each item is taxable or non-taxable. Non-taxable items can be services, miscellaneous charges or specific tax-exempt items such as food. Since the determination of what is taxable sometimes varies based on locality, this item flag can be optionally over-ridden as required. Exception tables can be set up to handle items which are taxable in one location and not in another (see next section).