diff --git a/app/controllers/spree/paypal_controller.rb b/app/controllers/spree/paypal_controller.rb
index 5ca339f52f..f5ef6872e6 100644
--- a/app/controllers/spree/paypal_controller.rb
+++ b/app/controllers/spree/paypal_controller.rb
@@ -15,9 +15,7 @@ module Spree
       order = current_order || raise(ActiveRecord::RecordNotFound)
       items = order.line_items.map(&method(:line_item))
 
-      tax_adjustments = order.adjustments.tax
-      # TODO: Remove in Spree 2.2
-      tax_adjustments = tax_adjustments.additional if tax_adjustments.respond_to?(:additional)
+      tax_adjustments = order.adjustments.tax.additional
       shipping_adjustments = order.adjustments.shipping
 
       order.adjustments.eligible.each do |adjustment|
@@ -175,12 +173,8 @@ module Spree
 
     def payment_details(items)
       item_sum = items.sum { |i| i[:Quantity] * i[:Amount][:value] }
-      # Would use tax_total here, but it can include "included" taxes as well.
-      # For instance, tax_total would include the 10% GST in Australian stores.
-      # A quick sum will get us around that little problem.
-      # TODO: Remove additional check in 2.2
-      tax_adjustments = current_order.adjustments.tax
-      tax_adjustments = tax_adjustments.additional if tax_adjustments.respond_to?(:additional)
+
+      tax_adjustments = current_order.adjustments.tax.additional
       tax_adjustments_total = tax_adjustments.sum(:amount)
 
       if item_sum.zero?
diff --git a/app/models/spree/adjustment.rb b/app/models/spree/adjustment.rb
index f256ab108e..3ffd9d8cac 100644
--- a/app/models/spree/adjustment.rb
+++ b/app/models/spree/adjustment.rb
@@ -64,12 +64,14 @@ module Spree
       end
     end
 
-    scope :tax, -> { where(originator_type: 'Spree::TaxRate', adjustable_type: 'Spree::Order') }
+    scope :tax, -> { where(originator_type: 'Spree::TaxRate') }
     scope :price, -> { where(adjustable_type: 'Spree::LineItem') }
     scope :optional, -> { where(mandatory: false) }
     scope :charge, -> { where('amount >= 0') }
     scope :credit, -> { where('amount < 0') }
     scope :return_authorization, -> { where(source_type: "Spree::ReturnAuthorization") }
+    scope :inclusive, -> { where(included: true) }
+    scope :additional, -> { where(included: false) }
 
     scope :enterprise_fee, -> { where(originator_type: 'EnterpriseFee') }
     scope :admin,          -> { where(source_type: nil, originator_type: nil) }
diff --git a/app/models/spree/order.rb b/app/models/spree/order.rb
index 784c9342d0..64278ed400 100644
--- a/app/models/spree/order.rb
+++ b/app/models/spree/order.rb
@@ -47,6 +47,7 @@ module Spree
              dependent: :destroy
 
     has_many :line_item_adjustments, through: :line_items, source: :adjustments
+    has_many :all_adjustments, class_name: 'Spree::Adjustment', dependent: :destroy
 
     has_many :shipments, dependent: :destroy do
       def states
diff --git a/app/models/spree/tax_rate.rb b/app/models/spree/tax_rate.rb
index eeee5673aa..0ea98c9cea 100644
--- a/app/models/spree/tax_rate.rb
+++ b/app/models/spree/tax_rate.rb
@@ -61,7 +61,7 @@ module Spree
     def adjust(order)
       label = create_label
       if included_in_price
-        if Zone.default_tax.contains? order.tax_zone
+        if default_zone_or_zone_match? order
           order.line_items.each { |line_item| create_adjustment(label, line_item, line_item) }
         else
           amount = -1 * calculator.compute(order)
@@ -89,6 +89,10 @@ module Spree
       end
     end
 
+    def default_zone_or_zone_match?(order)
+      Zone.default_tax.contains?(order.tax_zone) || order.tax_zone == zone
+    end
+
     # Manually apply a TaxRate to a particular amount. TaxRates normally compute against
     # LineItems or Orders, so we mock out a line item here to fit the interface
     # that our calculator (usually DefaultTax) expects.
@@ -114,6 +118,8 @@ module Spree
       label = ""
       label << (name.presence || tax_category.name) + " "
       label << (show_rate_in_label? ? "#{amount * 100}%" : "")
+      label << " (#{I18n.t('models.tax_rate.included_in_price')})" if included_in_price?
+      label
     end
 
     def with_tax_included_in_price
diff --git a/config/locales/en.yml b/config/locales/en.yml
index 6cb2b831c8..ba57144201 100644
--- a/config/locales/en.yml
+++ b/config/locales/en.yml
@@ -140,6 +140,8 @@ en:
   models:
     order_cycle:
       cloned_order_cycle_name: "COPY OF %{order_cycle}"
+    tax_rate:
+      included_in_price: "Included in price"
 
   validators:
     date_time_string_validator:
diff --git a/db/migrate/20201227122327_add_included_to_adjustments.rb b/db/migrate/20201227122327_add_included_to_adjustments.rb
new file mode 100644
index 0000000000..2ccbeab2a3
--- /dev/null
+++ b/db/migrate/20201227122327_add_included_to_adjustments.rb
@@ -0,0 +1,22 @@
+class AddIncludedToAdjustments < ActiveRecord::Migration
+  class Spree::TaxRate < ActiveRecord::Base; end
+
+  class Spree::Adjustment < ActiveRecord::Base
+    belongs_to :originator, polymorphic: true
+  end
+
+  def up
+    add_column :spree_adjustments, :included, :boolean, default: false
+    Spree::Adjustment.reset_column_information
+
+    inclusive_tax_rates = Spree::TaxRate.where(included_in_price: true)
+
+    # Set included boolean to true on all adjustments based on price-inclusive tax rates
+    Spree::Adjustment.where(originator_type: 'Spree::TaxRate', originator_id: inclusive_tax_rates).
+      update_all(included: true)
+  end
+
+  def down
+    remove_column :spree_adjustments, :included
+  end
+end
diff --git a/db/schema.rb b/db/schema.rb
index aa00312da6..1af54d5f23 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -386,16 +386,17 @@ ActiveRecord::Schema.define(version: 20210203215049) do
     t.string   "label",           limit: 255
     t.string   "source_type",     limit: 255
     t.integer  "adjustable_id"
-    t.datetime "created_at",                                                          null: false
-    t.datetime "updated_at",                                                          null: false
+    t.datetime "created_at",                                                           null: false
+    t.datetime "updated_at",                                                           null: false
     t.boolean  "mandatory"
     t.integer  "originator_id"
     t.string   "originator_type", limit: 255
     t.boolean  "eligible",                                             default: true
     t.string   "adjustable_type", limit: 255
-    t.decimal  "included_tax",                precision: 10, scale: 2, default: 0.0,  null: false
+    t.decimal  "included_tax",                precision: 10, scale: 2, default: 0.0,   null: false
     t.string   "state",           limit: 255
     t.integer  "order_id"
+    t.boolean  "included",                                             default: false
   end
 
   add_index "spree_adjustments", ["adjustable_id"], name: "index_adjustments_on_order_id", using: :btree
diff --git a/lib/spree/core/calculated_adjustments.rb b/lib/spree/core/calculated_adjustments.rb
index 6388369209..301d821642 100644
--- a/lib/spree/core/calculated_adjustments.rb
+++ b/lib/spree/core/calculated_adjustments.rb
@@ -43,7 +43,8 @@ module Spree
               order: order_object_for(target),
               label: label,
               mandatory: mandatory,
-              state: state
+              state: state,
+              included: tax_included?(self, target)
             )
           end
 
@@ -78,6 +79,15 @@ module Spree
 
           private
 
+          # Used for setting the #included boolean on tax adjustments. This will be removed in a
+          # later step, as the responsibility for creating all adjustments related to tax will be
+          # moved into the Spree::TaxRate class.
+          def tax_included?(originator, target)
+            originator.is_a?(Spree::TaxRate) &&
+              originator.included_in_price &&
+              originator.default_zone_or_zone_match?(order_object_for(target))
+          end
+
           def order_object_for(target)
             # Temporary method for adjustments transition.
             if target.is_a? Spree::Order
diff --git a/spec/models/spree/adjustment_spec.rb b/spec/models/spree/adjustment_spec.rb
index de6bdb1f98..0fab3d3cbd 100644
--- a/spec/models/spree/adjustment_spec.rb
+++ b/spec/models/spree/adjustment_spec.rb
@@ -460,5 +460,65 @@ module Spree
     context "extends LocalizedNumber" do
       it_behaves_like "a model using the LocalizedNumber module", [:amount]
     end
+
+    describe "inclusive and additional taxes" do
+      let!(:zone) { create(:zone_with_member) }
+      let!(:tax_category) { create(:tax_category, name: "Tax Test") }
+      let(:distributor) { create(:distributor_enterprise, charges_sales_tax: true) }
+      let(:order) { create(:order, distributor: distributor) }
+      let(:included_in_price) { true }
+      let(:tax_rate) {
+        create(:tax_rate, included_in_price: included_in_price, zone: zone,
+                          calculator: ::Calculator::FlatRate.new(preferred_amount: 0.1))
+      }
+      let(:product) { create(:product, tax_category: tax_category) }
+      let(:variant) { product.variants.first }
+
+      describe "tax adjustment creation" do
+        before do
+          tax_category.tax_rates << tax_rate
+          allow(order).to receive(:tax_zone) { zone }
+          order.line_items << create(:line_item, variant: variant, quantity: 5)
+        end
+
+        context "with included taxes" do
+          it "records the tax as included" do
+            expect(order.all_adjustments.tax.count).to eq 1
+            expect(order.all_adjustments.tax.first.included).to be true
+          end
+        end
+
+        context "with additional taxes" do
+          let(:included_in_price) { false }
+
+          it "records the tax as additional" do
+            expect(order.all_adjustments.tax.count).to eq 1
+            expect(order.all_adjustments.tax.first.included).to be false
+          end
+        end
+      end
+
+      describe "inclusive and additional scopes" do
+        let(:included) { true }
+        let(:adjustment) {
+          create(:adjustment, adjustable: order, source: order,
+                 originator: tax_rate, included: included)
+        }
+
+        context "when tax is included in price" do
+          it "is returned by the #included scope" do
+            expect(Spree::Adjustment.inclusive).to eq [adjustment]
+          end
+        end
+
+        context "when tax is additional to the price" do
+          let(:included) { false }
+
+          it "is returned by the #additional scope" do
+            expect(Spree::Adjustment.additional).to eq [adjustment]
+          end
+        end
+      end
+    end
   end
 end