Do you have multiple inventory locations? B2B pulls from the default location specified in Inventory->Setup Inventory->Standard GL Accounts. It is likely pulling from a location that does not have the quantity discounts specified.
Also, if you have multiple price levels check to see that the correct default is set.
All orders are drop shipped so, there is only one location "Drop Shipped" and have set the default pricing to "None". My products are custom printed items,(invoices, envelopes, checks, etc.) causing to have several pricing levels. Should an inventory location be setup for each price level (customer)? Please advise.
This shouldn't be necessary. I've done more testing and after upgrading to version 4.0.5273 the discounts appear to be working. Please upgrade and if this is still not working for you submit a support ticket to our new site at http://support.nolapro.com.