On Cloud, you can mark an account as tax-exempt and exempt all opportunities created for the account from product and labor taxes.
If you want to know more about marking an account as tax-exempt, check out this article.
When an account is marked as tax-exempt, you will see that all quotes created for opportunities (both Project opportunities and Service opportunities) are marked as tax-exempt by default. So, the service calls created for the relevant service contracts will also have the tax-exempt status set to ON.
If you want to enable taxes on the items and labor added to a service call, you can set the tax-exempt status at the top of the service call to OFF. You will see the following in the service call.
All the replacement and additional products included in the service call will include the taxes based on the tax rates set in the catalog.
The labor added to the service call will include taxes based on the tax rates set under Settings.
The drive time and truck roll fee options will allow you to set tax rates.
If you have enabled the tax-exempt functionality under "Settings > CRM" and want to disable it, you will need to set the tax-exempt status of all service calls for which the invoices have not yet been sent to OFF.