This is what I'm running into. I have no mods/hacks installed.

application_top.php:
define('DISPLAY_PRICE_WITH_TAX', false);

Tax Zone, Class and rate set up for NY Sales tax, 7%

Admin > Order Total:
1. Sub total
2. Shipping
3. Tax
4. Total

So far, so good. When i place an order as a NY resident, tax is calculated on both the item & shipping (which is what I want). E.g.:

Item: 99.99
Shipping: 8.05
Tax: 7.56
Total: 115.60

Now when I go into the admin module to check out the order, the tax on the shipping is gone!

Item: 99.99
Shipping: 8.05
Tax: 7.00
Total: 115.04

Help! What am I missing here?

You can test his by going to http://www.lakeshoredigital.net, create an account (NY resident) and "purchase" something with Check/Money order payment. Take note of the difference in tax in the order confirmation screen, and your confirmation email.... It's still a 'Dev' shop so you won't actually receive anything =)

Thanks!!

Bas