When viewing the shopping cart on our site, the tales tax is being added to the actual unit price. The item price on the product page shows properly without the tax and the tax setting is set to not be included in the product price.
We are NJ so for an item shipping to NJ on a $9.95 item, it is showing as $10.61 unit price. The subtotal also includes the tax and is the same amount as the Total cost.
We do not have the setting set to include tax in the item.
We also do not have the "Display prices with taxes on cart/checkout pages if the method of calculating taxes is based on a unit's price option" checked .... so I do not think it should be including the cost of tax in the product total in the cart.