--- uc_taxes.module.orig	2010-09-14 14:35:43.000000000 -0400
+++ uc_taxes.module	2010-09-14 14:36:45.000000000 -0400
@@ -497,8 +497,22 @@ function uc_taxes_apply_item_tax($item, 
   // Tax products if they are of a taxed type and if it is shippable if
   // the tax only applies to shippable products.
   if (in_array($node->type, $tax->taxed_product_types) && ($tax->shippable == 0 || $node->shippable == 1)) {
-    return $item->price * $item->qty;
+    $context = array(
+      'revision' 	=> 'altered',
+      'type' 		=> 'cart_item',
+      'subject' 	=> array(
+        'cart_item' => $item,
+        'node' 		=> node_load($item->nid),
+      ),
+    );
+    $price_info = array(
+      'price' 	=> $item->price,
+      'qty' 	=> $item->qty,
+    );
+
+    return uc_price($price_info, $context);
   }
+
 }
 
 /**