To setup the single tax:

1. Select Administrative > Sales Tax > Tax Definitions. 
2. Select Add. The Tax Definition screen will appear.
   
    
3. Enter an ID and description for this tax definition (e.g., TN Single Tax and TN Single Tax).
4. Enter 2.7500 into the Rate % field.
5. Enter 0.005 into the Rounding field.
6. In the Qualifying Sales area, select Items Costing from the drop-down menu and enter $1,600.00 in the of at least field.
7. In the Exemptions area, in the The First field, enter $1,600.00 and in the The Amount Over field, enter $3,200.00.
8. Set Qualifying Customers to Shipping to (or walk-in to store located in) and choose TN in the State drop-down list.
9. Set the ending date to anytime in the distant future (e.g., 1/1/2099).
10. Select the Categories tab and check all taxable categories.
11. Select the Stores tab and check all stores in Tennessee.
12. Select the Misc. tab and check those miscellaneous charges that are taxable.
13. Select the Other tab and check the taxable items here (e.g., repair parts/labor/other, custom parts/labor/other).
14. Select OK/Save and Close to save your new tax.