Tax with discounts

New Member
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Hello All, I am selling my products on Shopify to take advantage of the bulk discount code app. My discount code takes the full price of the item off, as customers will be purchasing the codes from another website.


The problem I have is that when checking out, the tax rate only applies to the shipping charges as the product cost becomes $0 with the code. In this situation, are both shipping and product cost supposed to be taxed or just the shipping cost?