What Does Not For Resale do?
A product which is set as Not for Resale will always charge tax, regardless of the Customer Tax Code.This can be found on the Product Information Window below the Tax Code field.
Sales tax is calculated on an order when both the product on the Detail tab of an order and the Tax Code on the Customer tab of an order are both set to use Tax. However, a product which is set as Not for Resale will always charge tax, regardless of the Customer Tax Code.
In the screenshot below, notice that the Button product is using a Tax Code of Tax and is set as Not for Resale. If the Tax Code is set to Non, Not for Resale will not be an available option.
In this screenshot, we can see that the customer tax is set to Non, but because the Button Product on the order is set as Not for Resale, tax is included anyway.