Setting up an Item as Non Taxable

Hi,

I need to set up an Item as non taxable. Same customer is shipped with some items that are taxable and some that are non taxable. I made the Sales Taxable field in Item Branch as N (No) for items tax exempted but it still applies tax when I checked the sales update. I believe that Item branch field (Sales Taxable = Y / N) overrides the customer tax setup.. Am I missing any additional step to make certain items as sales Tax exempt,please advise.

Thanks,

NG