How to setup a discount calculated before taxes

 I'm trying to find out how to setup a discount calculated before taxes. So far we don't have tax codes setup. I'm guessing this is a prerequisit, correct?  If I do setup taxes in Payables, will payment terms default to calculating pre-tax discounts? I see where there is a "Distribution Amounts Include Tax" checkbox selection in the setup of supplier sites under the Invoice Tax tab and Automatic Calculation area. Does this mean that you need to select that checkbox for each supplier for which discount calculation includes tax? This is why I'm guessing that by default, tax isn't included in