When Applying Coupon To Order Taxes Are Not Being Calculated

I'm having an issue with taxes not showing up in the total when a coupon is being applied.

eg: i have a package that is $125, total with tax would be $140. if i make a coupon for $125, the customer should owe the $15 tax. however it doesn't show up and not required to pay to put order through. (copy and paste from cart below)

Now if i want the customer to pay nothing on the $140 with taxes included, then i make the coupon for $140. (copy and past from cart below)

should the lines for taxes not be showing up? 

Settings -> Tax -> Calculate tax before or after any discounts

Discounts are typically applied BEFORE tax in most cases. But as Tim said, you can change that in the settings.

A long with the pointers above, you need to have the product marked taxable, and the corresponding city/state/proverence tax in the tax table. If you do not set it in the tax table no tax will be collected.

thanks for the reply. i did this (Settings -> Tax -> Calculate tax before or after any discount) 

however it's now showing up the tax lines but it is still charging the tax amount. eg if the total with taxes was $140 and you make the coupon for $140 you still have to pay the $15 of tax to put the order through.

I do a thing with some jobs where clients have the option to pay on photo day. It works good for people that don't have cc's, plus we get some money up front and people will get on and order this way. we then issue them a coupon for the total they paid and it includes taxes.

so is there no way to show the tax lines when they get their receipt from sytist and have the full amount couponed off? i hope that makes sense.

Vance, yes I have all products as taxable and the correct taxes in the tax table. the tax lines wont show up as discounted when applying a coupon. not sure if this can be shown or not.

If tax is set to calculate "Before Discounts ", it will charge tax and show it on the screen and they have to pay the tax part. The coupon will not cover tax.

ok so just to clarify, there is no way to have the tax lines show up for records but still take it off the total at the end of the transaction?

You would have to assign a credit to the customer's account to do that.

ok thanks, would take too much when we are doing big jobs to set up user accounts and then go in and apply credits. it is what it is.