How to apply discount to non-taxable items only?

[RockinGood]

Tax calculated with mix of service (non-taxable), product, and discount came out wrong.
The bill was: $95 (service) + $8.49 (product) - $31 (discount on the Service).
Tax 6% on $8.49 should have been $0.51.
Total should have been $73, but Square came up with $72.85.
Please explain how the discount is applied, since it affected the tax.

Please also tell me if there is a way I can apply discounts strictly against service, so they don't affect tax on products.

[RHatch]

Sounds like you took the discount on the total sale.  What you want to do is take the discount on the item.  Once you have the item selected.  Click on it and it will pop up a window that will allow you to adjust qty, tax, not and apply a discount just to that item.   Note that only %off discounts will show up.

[RockinGood]

Thanks. Yes, I saw an answer like this on another post, but I never saw the option to apply discount when I clicked the item. Must be the % vs. $ discount thing, because I'm offering a $ discount. Thanks for clarifying that.

Any other thoughts about how to get the tax right, when I offer a mix of taxable, non-taxable, and $ discount?

[RHatch]

Other than changing your discount from $ to % no.  However, does it really matter if it takes if off one or the other?   You only pay sales tax on the subtotal of the item after discounts.  As far as reporting your sales tax you are fine, it's just not the way you have been doing it.