Tags are important for the categorization of resources. It becomes extremely easy to generate focused reports based on these tags. Tags should be assigned to resources based on your requirements for reports. If you want to generate reports based on department or environments, they should be added as tags. Tags can help report the cost and the usage of Azure's resources as well.
Tags can be added to resources and resource groups. To add a tag to a resource in an ARM template, the tags element is used, and they can accept values from both variables and parameters. The next example shows the usage of tags within a resource definition:
"tags": {
"displayName": "SqlServer",
"environmentName": "[parameters('environmentName')]",
"Department"...