You can assign tags for resource groups, as well as individual resources which support Azure Resource Manager. The individual resources do not automatically inherit tags from the resource group parent. A maximum of 15 key/value pairs can be assigned (though you could store concatenated values or embedded JSON in a single tag value as a workaround). You may want to just assign tags at just the resource group level, and use custom queries to “inherit” at the resource level. Alternatively, you may want to assign tags to the individual resources directly particularly if you want to see them clearly on the standard “download usage” report of billing.
Since the key/value pairs are just free-form text, watch out for uniformity issues. To improve consistency, you can utilize policies to require tags and/or apply defaults if you’d like (for example, you might want to enforce a “Created By” tag). Tags can be set in the ARM template when you initially deploy a resource (which is best so that no billing occurs without proper tagging), or afterwards to existing resources via the portal, PowerShell, or CLI.
Melissa also shows how to query those tags using Powershell.