Can someone please explain why non-zero taxable income shows for an invoice-by-date report for an invoice that does not collect tax?

Hi, vre-jbw.
 

A non-zero taxable income on an invoice-by-date report for an invoice that doesn’t collect tax usually indicates that the invoice contains items that are defined as taxable, but tax was not applied, due to tax-exempt status or manual overrides like special tax rules applied. This helps in compliance and audit scenarios, where it’s important to know what portion of sales could have been taxed. 

You can check your invoice item tax setting and mark it as non-taxable , and review if the customer or invoice is set as tax-exempt, the system records the items as “taxable income” (since they would normally be taxable), but does not collect any tax. 
 

Here's a link for more details: Processing invoice as non-taxable income.

Feel free to leave any additional questions in the comments if there's anything else you need further assistance with.