Group Discount + Coupon = wrong tax calculation (Ontario store)

For some reason when I have a group discount (50% off) and I enter in a coupon code (Free Shipping) it still calculates the tax on the coupon with the 50% off. This worked fine for me in 1.3.7 but with the upgrade to 1.3.8a it seems to be broken.

 Sub-Total: $24.00 CAD

Group Discount: -$12.00 CAD

       Discount Coupon: FreeShipping : -$7.00 CAD


       Zone Rates (Shipping to CA): $0.00 CAD


       5% GST#82769 4761 RT0001: $0.60 CAD


       8.0% PST (Ontario): $0.96 CAD


       **5.0% GST on shipping: $0.18 CAD  - shouldn't be calculating this

**

        **8.0% PST (shipping): $0.28 CAD ****- shouldn't be calculating this**


       Total:$14.02 CAD

Can anyone help?

Has anyone in Ontario managed to get a free shipping coupon to take off the shipping and not charge tax on it? For some odd reason when i use my coupon I made it charges tax on the shipping even though the shipping has been removed by the coupon.