When the Round on Each Item setting is enabled, tax amount calculated is rounded to the nearest penny for each and every Qty of 1 of each line item.
For example, if the tax rate is 7.75% and the item's Base Price is $2.00, the tax amount for 1 item would be $0.155 (if this setting is disabled). This tax amount is rounded to $0.16 for each item. If 10 items are purchased, the tax amount is $1.60 (rather than the $1.55 it would have been if the setting was disabled).
Note: if this setting is enabled, 3 Decimal Points for Cost/Price is configured in the Decimal Points parameters, and the Tax Amount is Based On Price, the price is rounded to the nearest penny when calculating the total amount for the line item (e.g. if the price is 3.546 and the Qty is 10, the total amount will be 35.50 and not 35.46). However, the price is still displayed using all 3 digits.
Tax Tables - General Information
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