You can add tax rates on the fly when you create estimates and invoices. You can see the tax rates that you've already added in the settings for Microsoft Invoicing, and you can add new tax rates there as well.
Add a tax rate on an invoice or estimate
Create an invoice or estimate. For more information, see Create an invoice for a new customer.
In the Details section, if the customer is tax liable, choose the AssistEdit icon > next to the Customer tax rate field. This field is already filled in with your default tax rate, but you can choose another.
In the Tax Rates window, choose a tax rate or add a new.
Enter the name and rate for both city and state and close the Tax Rates window.
You can optionally click or tap Set as default tax rate. The default rate is automatically applied to any txable document or item.
Add a tax rate from the settings
In the Business center preview, go to Invoicing and then click the settings gear in the upper right corner.
Scroll to the Tax Rates section. Click Add new tax rate to add a new rate. Click or tap the ellipses to modify an existing tax rate.
Enter the name and rate for both city and state and close the Tax Rate form.
You can optionally click or tap Set as default tax rate. The default rate is automatically applied to any taxable document or item.
If you or your customers are in a country that uses valued added tax (VAT), such as the United Kingdom, read Add value added tax (VAT) to your invoices in Microsoft Invoicing for more information.