Filing Your OTP Special Tax
Most states that tax Other Tobacco Products don't assess the tax on what you sold things for. They assess it on what the goods cost you. That's a different number from anything on a normal sales report, and working it out by hand at the end of a quarter is miserable.
TORO has a screen that does exactly this one job.
This is a different report from the ARM Tax Reports covered in Tax Setup and Compliance. Those show the tax you collected. This one totals the cost of the goods you sold, which is the basis most OTP returns are assessed on.
Getting There
Open your Sales Tax Reporting screen and click Pay Other Special Taxes. The window that opens is titled Quartley Sales Tax Reporting.
Running It
Three things to set:
Special Tax — pick the tax you're filing from the dropdown. Only the product types that tax applies to are counted, so if your state's OTP tax covers cigars and pipe tobacco but not accessories, that's what you get.
The period — either a Quarterly Range (pick Quarter 1 through 4 and the year) or a Monthly Range (pick the month and year), depending on how your state has you filing.
Then read the results.
The top table breaks the period down by Product Type, with Total Sold and Total Cost. For most filings, Total Cost is the number you're after.
Select a product type and the lower table opens it up item by item — Item Name, Type, Items/Sku, Cost/Sku, Item Skus Sold, Items Sold, and Total. That's your backup if anyone ever asks how you arrived at the figure.
Why Last Quarter Still Says What It Said
This is the part worth understanding, because it's the difference between a report you can file from and one you can't.
Each sale is valued at the cost recorded when it was made — not what that item costs you today. So reopening a quarter you filed six months ago returns the same number it did then, no matter what has happened to your costs since.
Using today's cost instead would be wrong twice over. On a real store's 2025 figures it drifts around 16% from what was actually paid. And placeholder costs make it absurd — a single SKU carrying a 9,999,999.00 cost turned a $101,000 basis into $10.1 million. Neither is something you want to sign your name to.
One Gap to Know About
Sales of items with no cost recorded contribute nothing to the basis. If an item was rung up without a cost behind it, there's no cost to add in, so it simply doesn't appear in the total.
In practice this is small and mostly harmless. On one store's quarter it was 115 lines out of 12,325 — understating the basis by roughly $711. The lines involved are overwhelmingly Miscellaneous Taxable, Miscellaneous Non-Taxable and coupon rows, which carry no OTP basis anyway.
Still, it's worth a glance. If you see real merchandise in that category, it's a sign items are being rung up without costs, which is worth fixing for your profit reporting as much as for this filing.
Before You File
Check the figure against your own expectation before it goes on a return. This screen had a fault that stopped it running at all until recently, so it's likely to be new to you even if it's been sitting in that menu for years. Give the first one you run a proper look — and if the number surprises you, call us before you file rather than after.