As you may have noticed, when you click 'Override' on the tax rate for a project you are presented with a small pop-up asking you to select a reason for a 0% tax rate or to select the custom tax rate.

If you want to apply a 0% tax override to a project you will need to select if the reason for the override is because the project is either:

We are requiring this information because as we get ready for tax reporting any project with a 0% tax rate will need to be properly identified on the reports. 

If you attempt to manually override the tax rate to 0% you will be prompted that you need to use explicit Tax Exempt Reason to set 0% rate.