Tax applied in wrong order

I'm using version 1.3 and am having a problem with the way it is calculating the total. I have the sort order for totaling the sale set to:

1-Sub-Total
2-Tax
3-Shipping
4-Total

What is happening though is that the tax is also being applied to the shipping, even though it should be next in the order of operation. Here's an example:

Sub-Total: $1,506.95
11% Federal Excise Tax: $165.76
Table Rate (Best Way): $50.00
Total: $1,728.21

Which makes it $5.50 off, or the shipping times the tax. If you vary the shipping, the amount incorrect stays at shipping X tax rate. I've got the shipping table set to basically a 10% rate up to $500.00 and then it tops at that for $50.00 shipping no matter how much more is purchased. I tried to find the percent shipping module that others talked about, but it's MIA in the download section. Apparently it hasn't been made available since the hack.

Anyways, how do I get it to stop applying the tax to the shipping?