Anyone that know why Method 1 of Discount is not setting correct Tax code in Nexus International? If items has Tax code ES Sale of goods in EU the discount is set to S Internal Tax Sweden and apply in different boxes in the TAX-report. Method 1: Applying a Discount to all Items from the Discount Field (U.K. and International Editions) "You can apply a specific discount percentage or dollar amount by selecting an option from the Discount dropdown list on the Item subtab for the sales order or invoice. The choices available in the Discount dropdown list are based on discount items that have already been created in your account. When you choose a discount method from the dropdown list, the % or amount of the discount is populated in the Rate field and is applied to all items on the sales order or invoice. It is critical to remember that when using this method, the percentage or fixed amount you enter for the discount is always applied to the group of items before tax is applied."

I'm also facing this issue and so far didn't find any good sollution. The is a workaround but I see it very inconvenient. It would be: don't use discount field on top of item lines , but add a subtotal line item and then discount line item, in such case you can change tax code next to this discount line. Otherwise I didn't find possibility to impact tax code on discount.