# US Tax Codes

Tax Codes represent names and associated rates of Tax set by specific Tax Authorities. For this reason, Tax Codes are associated with their related Tax Authority via a drop-down list.

<figure><img src="https://2650739216-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FnVmamp3TnQON29mRg6Hg%2Fuploads%2FgBgdehZS2aBZ2SATGhtd%2Fimage.png?alt=media&#x26;token=69576071-31d4-4c99-adf2-1318ae0ccf52" alt=""><figcaption></figcaption></figure>

There are a few things worth noting:

* The Tax Authority drop-down is mandatory. Each code must be associated with a specific Tax Authority.
* The field 'Only used in Tax Group' requires a bit of explanation. Normally Tax Codes can be assigned directly to Sales Documents, such as Invoices. In some cases, it may be necessary to group Tax Codes together in a Tax Group and apply the collective rate. If this Tax Code is to be used exclusively in a Tax Group i.e. it is never applied in isolation, then ticking this box will remove it from the list of selectable Tax Codes on the Sales Documents. It is simply a method of reducing the number of selectable Tax Codes/Groups.
* The current and historical Tax Rates are entered into the table. If there are no entries the Tax Rate is set to zero.