Invoices are confusing me ...

I was going through some of my invoices from my store and I am confused at what I am looking at. I thought if I posted what I am seeing maybe somebody could clue me in as to how Zen Cart is doing the calculations and if they are correct? If they are not correct, maybe I could be pointed to how to fix them? Thank you for looking and here it goes:

There were 3 items purchased. All the same item. The customer is in my State so they pay tax, which is 8.6% (State+County+City). They used a coupon called XMAS for 10% off their entire order. They also used a $20 gift certificate.

That sets up the entire invoice. Now you can view a copy of it HERE.

I cannot seem to see how the 8.6% tax is calculated (based on which sub-total?). Is the S&H being taxed? Also, what does the Price (ex) and Price (inc) mean?

Any information from all you smart folks would be great.

Thank you so much for your help.