"It has a sweet taste."
Translation:Ha un gusto dolce.
Why would "e (with the accent on the 'e') ha un gusto dolce" not apply? 'e is it, isn't it?
Not quite, but I can see how you got there. Remember that the subject pronoun (he, she, we, they...) is optional and often dropped. "It" follows that rule too, and as a result you've probably only seen sentences that begin with "is", è, instead of the subject esso. You can use it if you want, but it isn't at all necessary. Just remember that è is third person to be and ha (the verb used here) is to have.
As I understand from your answer, it is optional, so it should be accepted. However, Duolingo didn't accept my answer with è in the beginning.
'È' means 'is', so your translation would have meant 'it is has...' The word 'it' is optional so you only have to provide the word for 'has' which is 'ha' in Italian. There is no 'è' ('is') in the sentence.
If I got you right: It's hard to explain in English. Anyway in this case "It has a sweet taste" a rule of thumb might be: To be = something that belongs to the object without your interaction. e.g. it is blue, it is fast and so on. A quality of the object, a condition of the object.
To have = something that is owned by the object; it might have or not. e.g. He has not hair (hairless). But you can also say "E' calvo", it means He is hairless.
As you can see there are no absolute criteria to say when you should To be or To have.
"esso = he/it" is a 3rd person subject pronoun that can be used instead of "lui" when referring to an animal. Also it's used for referring to a thing.
To find out more about egli, ella, esso, essa, essi, esse check here: http://italian.about.com/od/grammar/a/aa052808a.htm