A. Product Tax is calculated via this formula:
1. Select a product in the cart.
2. Determine its selling price
3. Determine the quantity of this item in the cart.
4. If one-time charges apply, add to the product's price
5. Determine the product's tax rate.
6. Calculate tax for the product.
7. Go to the next product and start again.

If the site is set to "include tax in displayed prices", then we simply loop through the products and calculate how much tax is included, so that it can be shown as a subtotal during checkout.

I think this is the same as what you had said you thought it should be in an earlier post.


B. So, next we look at shipping:

As to shipping rates, tax is calculated on shipping based on shipping-module settings and tax-basis settings. If you set a tax class on shipping, then shipping will be taxed according to that tax class's details... ie: depending on rate and zone, etc.

You've got the Tax Class in your shipping module set to "-None-", which means tax will not be calculated on shipping. Thus, the price you're seeing in the order-totals isn't including shipping taxes.


C. Finally, we look at coupons:
Coupons, like shipping rates, are also calculated based on the module settings. In the ot_coupon module, the default settings are:
- Sort Order=280
- Include Shipping = true
- Include Tax = false
- Recalculate Tax = standard
- Tax Class = none

Since you're desiring to have tax refunded where a coupon is used, you need to change the "Recalculate Tax" setting to "Credit Note" and change your Tax Class from '-none-' to the same tax class that your products and shipping are using.


That should do it.