Product Tax Code
Product taxability rules are applied by PTC (Product Tax Codes) and are specific to jurisdictions, as outlined in the Amazon Product Tax Code list. Note: a PTC can be assigned at the item or default level.
Default level: The default PTC is set in your Tax Settings and is used to apply a single PTC assignment to multiple offers that do not have a specific item level PTC already assigned. If you use a custom rate, your PTC rule and rate will be overridden with your custom rate. Custom rate is not available in Canada.
If a PTC assignment is not assigned to the default or item levels, the tax calculation will be non-taxable for the item(s) in the transaction using the "Always Non-taxable" A_GEN_NOTAX product tax code, resulting in a zero percent calculation.
For more information on Product Tax Codes, click this resource.