How do I correctly setup QB so that when I bill a company for a part it is not reflected as income

There is no problem with income tax, you assign an income account and an expense account for each item, if the amounts are the same, there is no net income, so no income tax. There could be a problem with sales tax, depending on where you are. I don't know if I have this right but what I currently do (in QB Pro 2005) is create a non-inventory item "sold to a specific customer...", make the sales prices as the purchase price including sales tax and note on the description (the one that appears on the invoice) "8.25% CA sales tax included" (8.25% is the rate I pay where I am). That's my best guess as to how keep things simple and avoid paying sales tax twice in the state of California, after attending a free conference on sales and use tax and thinking it over some. My method hasn't been acid tested (hopefully it never will be).

Your fear is unjustified. Even if you did show this as income the cost of the item would offset the income dollar of dollar.

What you get for a part is not "income." The selling price is "revenue." Only when all expenses have been subtracted from revenue (cost of goods sold, taxes, transportation, etc.) do you end up with "income."

It's confusing. We have an Internal REVENUE Service that taxes INCOME. But it's REVENUE to the government. Their REVENUE depends on your INCOME. Only after the government subtracts the cost of collecting the funds, and other miscellaneous reductions, do they determine they need to tax more.

In your case, a $4 sale is $4 of revenue offset by $4 cost of goods sold for an income of zero (you might be able to make it up in volume).

If you buy it for $4 and sell it for $4 then you have an expense of $4 and an income of $4 and therefore a profit of $0. You would pay no tax.