It _should_ be calculated that way. I think we do have a bug here. We'll look into it.
The idea behind that "include in price" box is specifically for situations like VAT, where someone wants to know how much of the order is sales tax - but it has already been included in the price, not added on afterwards.
@rmdesign Your post here brought this one back onto our radar. We typically don't monitor the chit chat forum too closely for ecommerce issues.
In any case it absolutely makes sense that the amount of tax displayed shouldn't be calculated as the tax percentage of the product's price including tax, but excluding the tax. I still have some questions as to how tax on shipping would even work with this.
I'll get a solution included in the next release.
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