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Should I calculate sales tax before or after a coupon discount is applied? I assume this will vary by state, I'm currently dealing with NY.

We deal with three types of coupons: % discount, $ discount, and free shipping. I know that for % discounts, tax is calculated after the discount is taken. What about $ discounts? What about free shipping (NY does charge sales tax on shipping & handling)

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up vote 2 down vote accepted

You charge tax on the amount of sale that the consumer will be paying for, not original value. So basically the tax is charged on the discounted amount. In your case the "subtotal after discount" + "shipping (which is $0)".

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Here the shipping itself is discounted –  Yisroel May 25 '11 at 19:14
    
Which is fine. If you're not charging for it then there is no tax to be paid on it. The sales tax is for the amount paid, not original value. –  John Conde May 25 '11 at 19:16
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