Tax Setup and Compliance
Nobody opens a cigar shop because they love tax compliance. But get this wrong and you'll pay for it — literally — at filing time. The good news is that TORO handles the math automatically once you tell it what your rates are. The setup takes ten minutes. Fixing mistakes later takes much longer.
Setting Your Sales Tax Rate
- Open the Dashboard.
- Click the TORO Configuration tab in the list down the left side. (Can't find it? Type "setup" in the search tools... box at the top right.)
- Click the Set Up System card.
- Click the Manage Taxes tile. This opens the Pricing and Tax Setup window.
In the panel titled Taxes added at time of Transaction (Sales Tax), click the + button to add a tax. Give it a name and enter your rate as a percentage. If you're in an area with a single combined rate (say, 8.25%), just add one tax with that number and you're done.
Reporting Frequency must be Monthly or Quarterly. The dropdown also lists Annually and Unknown, but TORO won't save a tax set to either — those are the only two filing schedules the sales tax report knows how to build, and a tax saved on the wrong one produces a garbled report. If you click Save and TORO refuses, this is why. Note that once a tax has been used on a real sale, the frequency locks and can't be changed from this screen — so get it right the first time, and call us if one is already wrong.
If your jurisdiction breaks it into components — state tax, county tax, city tax — add each one as its own tax row. TORO adds them up and applies the correct total to every transaction. This matters because some of those components might change independently, and you'll want to update just the one that moved without touching the others. (You can drag the rows to set the order they're calculated and printed on the receipt.)
Save it, and from that point forward every sale gets taxed correctly. You don't have to think about it again unless your rates change.
Special and Excise Tax (Tobacco-Specific)
This is where it gets specific to your industry. Many jurisdictions impose additional taxes on tobacco products — OTP (Other Tobacco Products) tax, floor tax, excise tax — on top of regular sales tax. TORO has a dedicated special tax system for exactly this.
On that same Pricing and Tax Setup window (Dashboard → TORO Configuration tab → Set Up System card → Manage Taxes tile), find the panel titled Taxes built into Retail Pricing (OTP Tax, Soda Tax, etc.). Click the + button to add a new special tax. You'll set:
Description — something descriptive like “State OTP Tax” or “County Excise”
Percentage or $ Amount — the rate, as a percentage or a fixed dollar amount
Dollar Value Minimum — only apply this tax to items priced above a certain amount, if your jurisdiction requires it
Dollar Value Maximum — an upper price limit, if the tax only applies up to a certain item value
Tax Cap — the most tax this charges on a single item, if it caps out
Active start and end dates — for taxes that have a start or expiration date (like a temporary floor tax)
Assign each special tax to the product types it applies to. Cigars might carry one rate, pipe tobacco another, accessories none at all. You can have multiple special taxes active simultaneously — TORO applies each one to the right products automatically.
Tax-Exempt Sales
Some of your customers won't owe tax. Resellers with a valid tax ID, nonprofit organizations, government agencies — they all qualify for tax-exempt status in most jurisdictions.
In TORO, you set up your tax-exempt buyers ahead of time as organizations, then mark a sale tax-exempt at the register. To set up the buyers, open the Dashboard, click the Transactions tab, and click the Manage Tax Exempt Organizations card. (Can't find it? Type "tax exempt" in the search box at the top right.) Here you record each organization and its tax-exempt number — the documentation an auditor will want to see.
Then, at the register: add the customer to the sale, and choose Make Tax Exempt from the transaction menu, picking the right organization. Tax comes off automatically for that sale. Because it's tied to the organization you set up, you keep a clean record of who's exempt and under what number.
Refunds work correctly too. If a tax-exempt customer returns something, TORO knows there was no tax to refund and handles it cleanly.
The Sales Tax Report
- Open the Dashboard.
- Click the Store tab in the list down the left side.
- Click the Sales Tax card.
(You can also reach it under the Reporting tab, in the Sales sub-tab. Can't find it? Type "sales tax" in the search tools... box at the top right.)
The window that opens is titled Transaction List, and it has three stacked tables: your taxes at the top, the individual line items in the middle, and your totals at the bottom. Pick the month, or set a start and end date, and TORO loads the period.
Reading the columns
Two column names were changed to say what they actually mean:
- In the middle table, the column that used to read Sub Total now reads Net Sales.
- In the totals table at the bottom, the column that used to read Sales now also reads Net Sales, and the Discounts column now sits immediately before it.
They're both called Net Sales because that's what the figure is: discounts have already been taken out of it. A note under the totals says so directly — "NOTE: Discounts are already removed from the Net Sales column." Don't subtract your discounts a second time when you file.
Sorting the line items
Click any column header in the middle table to sort by it. Click again to reverse it. Sort by Discount Amount to find your biggest write-downs, or by Net Sales to find the largest sales in the period.
If you tried this in an older version and nothing happened, that's fixed. One badly-typed column was silently breaking sorting for every column in that table. The Discount Amount column now also shows a proper dollar figure — $1,234.56 — instead of a bare number like
5.0.
Drilling into the totals
Along with the totals, you get buttons that drill into the numbers behind them:
View Net Sales Non-Taxable For Tax — the product sales with no tax (tax-exempt items, out-of-state sales, etc.)
View Coupons & Discounts — coupon redemptions and customer discounts. This button shows the total dollar amount right on the button itself, so you can see the impact at a glance before clicking in.
View Comps and View Out of State & Charity Transactions — for drilling into those amounts too.
Tracking coupons and discounts separately matters because they aren't really “non-taxable sales” — they're reductions to taxable sales. Keeping them apart gives you a cleaner picture of your actual non-taxable product sales for tax filing.
Other Tax Reports
TORO tracks every penny of tax collected, broken out by type. Sales tax and special tax are reported separately, so when it's time to file, you're not untangling anything.
In the Advanced Reporting Module, the Tax Reports show you collection totals by period — daily, weekly, monthly, quarterly, whatever your filing schedule requires. You can export the data for your accountant or your filing software.
If different product categories carry different tax rates, the reports break that down too. You'll see exactly how much tax was collected on cigars vs. pipe tobacco vs. accessories, which is exactly what the tax authority wants to see.
Keeping It Right
A few things to keep in mind as you go:
TORO doesn't auto-detect your local rate. You're responsible for entering the correct percentage. If you're not sure, check with your local tax authority or your accountant. This isn't something to guess on.
Rate changes apply going forward. If your state raises the tax rate on July 1st, update it in TORO on July 1st. Past transactions keep their original tax rate — which is correct. You collected the right amount at the time of sale.
Update promptly when rates change. When your jurisdiction announces a rate change, put it on your calendar. The day it takes effect, update TORO. Every transaction between the effective date and when you update the system will have the wrong tax amount, and that's a headache to reconcile.
Different categories can have different rates. If your jurisdiction taxes tobacco products differently than general merchandise, set that up in the product type tax configuration. TORO applies the right rate based on what's being sold.
Consult your accountant. TORO collects the tax and keeps immaculate records of what was collected. But a professional should verify you're collecting the right amounts, filing on time, and handling edge cases correctly. The system is a tool — it's not a substitute for professional tax advice.
Keep your records. If you're ever audited, TORO's tax reports are your documentation. They show exactly what was collected, when, on what, and at what rate. That level of detail is what makes an audit go smoothly instead of painfully.