Is this a bug? How to configure to apply discount BEFORE sales tax?

I'm currently using ZC 1.3.0.2, but I just confirmed this same thing happens with ZC 1.3.5. I didn't have this problem when I had 1.2.6d

Current configuration for Modules>Order Total>Discount Coupon
Include Tax in Calculation: False
Recalculate Tax: Standard

--Example--
Subtotal: $78.14
Discount 5%: -$3.91
Sales Tax 8.25%: $5.81

Sales tax is incorrect, it should be $6.12. In the above example it's also taking 5% off what should be the correct sales tax amount.
The configuration 'include tax in calculation: False' and 'Recalculate tax: Standard' worked just fine in ZC 1.2.6

So my question is, what should be the proper configuration to accomplish this or is there a bug? I have tried several combinations and the one that seems to almost work is:
Include Tax in Calculation: False
Recalculate Tax: Credit Note
Tax Class
Use the following tax class when treating Discount Coupon as Credit Note: Taxable Goods

So this gives me 'Sales Tax 8.25%: $6.13', which is still off by 1 cent.

Change your order totals modules sort order to have the discount before the taxes.

Hi, I do have discount before taxes, I've had like this since 1.2.6:
Module - Sort Order
Subtotal - 100
Discount Coupon - 120
Shipping - 200
Tax - 300
Total - 999

Mine is doing this too, it's driving me crazy :wacko:

OK, bizarrely enough I seem to have gotten this working! It's bizarre because I spent forever playing around with it before and couldn't get it, I just seem to have stumbled onto the right combination I guess :D

Sort Order
280

Include Shipping in calculation
false

Include Tax in calculation.
false

Re-Calculate Tax
Standard

Tax Class
Taxable Goods

Hi Danielle, could you post the sort order of all your order total modules? The combination you mentioned doesn't work for me. With that combination it still discounts from the sales tax I should collect.

What seems to work for me is(although sometimes it's off by one cent) is:
Sort Order - 120
Include Shipping - false
Include Tax - false
Re-calculate Tax - Credit Note
Tax Class - Taxable Goods

The sort order of all order total modules is like this:
Discount Coupon - 120
Group Discount - 290
Gift Certificates - 840
Low Order Fee - 400
Shipping - 200
Sub-Total - 100
Tax - 300
Total - 999

OK, I will post it. Out of curiousity, can anyone tell me the difference in the Coupon settings between Recalculate Tax - Standard and Recalculate Tax - Credit Note? Whichever one I choose, my order totals all remain the same, so I was just wondering what the difference is!

My sort order is this:
Discount Coupon - 280
Gift Certificates - 840
Shipping - 290
Sub-Total - 100
Tax - 300
Total - 999

The only difference I see is that you have the Group Discount and Low Order Fee modules installed. Are you using them? Maybe try turning them off and see if the order totals correctly. If it does, and you do need them on, then try playing around with their sort order...

I don't use the Group Discount module anymore, I used to use it in the past. I do use the Low Order Fee module.
I see you're using 1.3.5, so this might only apply to the version I'm using 1.3.0.2. I'm still working on upgrading.