I am running 1.6.0. I upgraded to it shortly after it was released.
Both the shipping method and the product have a tax category of none.
I think I found how the math is working now, but I still don't understand why.
One product, the one selling for $12.50 actually has a discount on it. The regular price is $19.95. If I add $19.95 and the other merchandise before taxes which comes to $59.85, I get $79.80. If I calculate tax from that amount, I get $5.49, which is what the customer was charged.
I feel confident that I have figured out what happened, but I don't understand why, as the discounted item has a tax category of none. It does have three variants as there are three sizes, but variants don't have a tax setting, so it isn't something buried in there.
Any thoughts as to why that one item would be taxed, when it is not set to be taxed?