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Join now2. If not.... Can I make the item prices the item cost and create different price levels for regular markup versus sales tax plus markup?
Yes and that is the easiest way to do it, especially if you have premier or enterprise since you can do custom pricing by item rather than all of them.
1. Is it possible to put item cost on the invoice to only be seen by us. (This would reduce the need to look up each individual item)?
yes but it is a pain to do, you create a custom field for cost, then enter the item average cost in that field per item. On the invoice, customize data layout, column tab, enable the field for screen but not for print.
with 1K items this utility might help take some of the pain away
http://www.q2q.us/ucfOverview.htm