I figured out this issue so I wanted to go ahead and post the solution just incase anybody else has a problem with this.

In the Store Settings I changed the tax settings to be tax included.  When I did this though, it actually charged tax on the gift card code.  To get around this, I went in and set the product for the gift card to be tax exempt. 

Now, when somebody checks out, it shows them the tax that they are being charged per item and then discounts the amount of the gift card.