Group Discount with Taxable AND non-taxable products

[mrkrinkle]

I have a brand new 1.3.5 installation set up specifically to test this discount issue.

I am trying to work out how ZenCart handles a discount where there is taxable and nontaxable items in the cart.

My order total order is as follows;

Sub-Total ot_subtotal 100
Shipping ot_shipping 200
Discount Coupon ot_coupon 280
Group Discount ot_group_pricing 290
Tax ot_tax 300
Gift Certificates ot_gv 840
Total ot_total 999

My Group Discount settings in Order Total are;

This module is installed
true
Sort Order
290
Include Shipping
false
Include Tax
false
Re-calculate Tax
Standard
Tax Class
--none--


Purchasing these products;

$10.00 Non Taxable Product
$4.00 Taxable Product (10%)

With NO shipping I got the following results;

$14.00 Subtotal
-$1.40 Group Disount (10%)
$0.26 Tax
$12.86

This appears straight forward. The discount of $1.40 came off the taxable item (= $2.60), * 10% = $0.26 tax. My second test confirmed this theory;

$14.00 Subtotal
-$3.50 Group Disount (25%)
$0.05 Tax
$10.55

However when the discount is larger than the value of the taxable item ($4) what happens??

$14.00 Subtotal
-$7.00 Group Disount (50%)
$0.00 Tax (was not listed)
$6.70 ??? Where did this come from

Can enybody help??