These are very broad strokes, but others can add more detail. Since you're only showing a couple of columns for each table we won't worry about changing or removing columns in the model.
1) Use PowerQuery to import the two tables: item master and test history. This is a long post in itself, but in quick terms you can go to the Get & Transform section of the Data ribbon, choose From Database, and follow the instructions.
2) in the data model, relate the item master to the test history based on the item ID. Assumes item ID is the same data type in both tables and that it's unique in the item master. Again a longer post, but find the Diagram View and drag the item ID field from one table on top of the item ID field of the other table.
3) Go into the data model (Alt+B,M). click on the Item Master tab and scroll all the way to the right to the last column called "Add Column".
4) Click on a cell in the column. Create the calculated column in the item master file, call it "Tested". If there are any rows against the item ID in the test history file return TRUE (or Y) else FALSE (or N) depending on what value you want in the slicer.
(Following DAX is just a guideline, you may need to tweak it depending on your circumstances)
5) Inside the data model window on the Home tab click the PivotTable icon. Create the pivot table. The new "Tested" column is your slicer source. Drag the Item Master[Item ID] into a row of your pivot table and the Test History[Year] as well. You may need to create a dummy measure to put in the values section in order for the filters to work properly. You can do a count of the number of test years
Dummy Measure:= COUNTROWS(Test History[Year])