do xbox charge tax on geft card?

There is nothing to fix. If you notice the game prices are $ + tax as every item you purchase. The tax rate is based on the state you are located.

M3tal is correct. Unless you live in a country where VAT (Value Added Tax) is included in the price you must account for tax on all purchases. Sadly, when you purchase a gift card from a retailer you get charged twice for tax. Once at the store and then
again when you purchase a digital item. For this reason I tend to use a credit card or paypal for my purchases. This way I only pay tax once form my content.

Best Buy charges tax for the card they sell to you. The Xbox Marketplace charges tax on products that are purchased through them.

Both are separate entities and must charge tax on products they sell according to Government laws.

In the US when you buy prepaid cards you do not pay tax, as far as the market place I am unsure if tax is charged.

What exactly do you propose Microsoft do? Phone up every single global retailer of their products every 60 seconds to make sure they are not illegally charging tax?

I'm not trying to be rude here but if you went to Best Buy and they charged you tax on a non-taxable item then you will have to take it up with Best Buy. The Microsoft Points system was not taxed on either end because it was not legally money but the majority
of consumers wanted Microsoft to get rid of the point system and switch to standardized currency. Legally--since it's real money now and not a point system--taxes must be deducted from your account balance anytime you make a purchase in the Game Store.

Some areas are legally able to charge tax on gift cards however and you could very well live in such an area but if you normally do not pay tax on gift cards you should not have been taxed by Best Buy for the $50 Xbox Gift Card.