The ledger account used for cash discounts in general, is specified on the Cash discounts form. On the ledger posting group you can select a separate ledger account for cash discounts that involves sales taxes.

Select the Reverse sales tax on cash discountand the Cash discount is calculated on amount incl. sales taxcheck boxes in the Parameters form to calculate the cash discount including sales tax. The sales tax is reversed when a payment and a corresponding cash discount are posted.