Taxes charged on shipping when using free shipping coupon

I have installed a free shipping coupon and I charge tax on shipping. Since the coupon just takes the dollar amount off, the tax is still being charged on the shipping. Here is a test order I ran:

Sub-Total: $25.00
Canada Post (Shipping to CA): $7.50
Discount Coupon: xxxxxxxx: -$7.50
5.0% GST + 7.0% PST (BC): $3.00
5.0% GST on shipping + 7.0% PST on shipping: $0.90
Total: $28.90

Is there anything I can do so that the shipping tax does not get applied on an order when using the free shipping coupon?

Thanks!

I'm getting the exact same problem

It's so strange....all my tax calculations worked perfectly in 1.3.7. I have the exact same settings in 1.3.8a and it's not calculating properly. I've been trying to find a solution for weeks and I have found nothing. I wonder if 1.3.8a had it's order total rewritten or something.

For those who want to know...i managed to fix this by taking the whole ot_total folder from 1.3.8a and replaced it with the older 1.3.7 folder and all it's contents. Now everything is working like it should. :smile:

Thanks for the help it is working now :clap:

i was pulling my hair the whole afternoon so