When applying a discount coupon I am getting an error in the checkout total.

Cart contains 11 items.
Total pre coupon price is 390.00
Zen v1.3.6
discount coupon = 50%


Step 2 of checkout:
sub total 390.00
store pickup 0.00
tax (7.25%) 28.30
total 418.30

Step 3 of checkout:
sub total 390.00
store oickup 0.00
Discount coupon 195.00
total 67.21


The final total is grossly wrong. The sales tax calculation is overcharge by .02 as well.

Do I have some settings set wrong somewhere to correctly use the coupons?