It's 8.25%. Definitely not a discount. It's very odd. 

Square fees are not reflected in the Gift Card Sales line. It shows amount activated, or does normally. 

Hmm, strange - can you find the Transaction in your Sales History and post a screenshot of it?
It should show you there what's going on.

A tax should be added on top of the $40, not subtracted out from it.

Unless you have "Tax Included in Price" enabled, and it's somehow applying to Gift Cards.

In this one, it actually looks like it's more than sales tax. But the amount reflected in the deposit report is definitely not the amount in the sales receipt. 

Here's another one. I see a common factor. Both days have gift cards that were part of a sale that had a discount. I guess square is applying the discount proportionately across all items in the sales receipt? The amount in this one made me think it was Sales Tax related because it happens to be a difference of exactly 8.25%

Sweet, glad we figured that out for you!

And glad you've been selling a good amount of Gift Cards too!!