“Department" means the department of revenue.
Any person engaged in the business of selling tobacco products in this state who brings, or causes to be brought, into this state from outside the state any tobacco products for sale;
Any person who makes, manufactures or fabricates tobacco products in this state for sale in this state; or
Any person engaged in the business of selling tobacco products outside this state who ships or transports tobacco products to retailers in this state to be sold by those retailers.
“File" means mail or deliver a document that the department prescribes to the department or, if the department prescribes another method of submitting or another destination, use that other method or submit to that other destination.
“Manufacturer" means any person who manufactures and sells tobacco products.
“Moist snuff" means any finely cut, ground, or powdered smokeless tobacco that is intended to be placed or dipped in the mouth.
“Pay" means mail or deliver funds to the department or, if the department prescribes another method of submitting or another destination, use that other method or submit to that other destination.
“Person" includes any individual, sole proprietorship, partnership, limited liability company, corporation, or association. A single-owner entity that is disregarded as a separate entity under ch. 71
is disregarded as a separate entity for purposes of this subchapter.
“Place of business" means any place where tobacco products are sold, manufactured, stored or kept for the purpose of sale or consumption, including any vessel, vehicle, airplane, train or vending machine.
“Retail outlet" means each place of business from which tobacco products are sold to consumers.
“Retailer" means any person engaged in the business of selling tobacco products to ultimate consumers.
“Sale" means any transfer, exchange or barter for a consideration. It includes a gift by a person engaged in the business of selling tobacco products for advertising or as a means of evading this subchapter or for any other purpose, and it includes solicitation of orders for, and the sale for, future delivery.
“Storage" means any keeping or retention of tobacco products for use or consumption in this state.
“Subjobber" means any person, other than a manufacturer or distributor, who buys tobacco products from a distributor and sells them to persons other than the ultimate consumers.
“Tobacco products" means cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut, ready-rubbed and other smoking tobacco; snuff, including moist snuff; snuff flour; cavendish; plug and twist tobacco; fine cut and other chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco and other kinds and forms of tobacco prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking; but “tobacco products" does not include cigarettes, as defined under s. 139.30 (1m)
“Use" means the exercise of any right or power incidental to the ownership of tobacco products.
Imposition; exceptions. 139.76(1)
An excise tax is imposed upon the sale, offering or exposing for sale, possession with intent to sell or removal for consumption or sale or other disposition for any purpose of tobacco products by any person engaged as a distributor of them at the rate, for tobacco products, not including moist snuff, of 71 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products and, for moist snuff, at the rate of 100 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products. The tax imposed under this subsection on cigars shall not exceed an amount equal to 50 cents for each cigar. On products imported from another country, not including moist snuff, the rate of tax is 71 percent of the amount obtained by adding the manufacturer's list price to the federal tax, duties and transportation costs to the United States. On moist snuff imported from another country, the rate of the tax is 100 percent of the amount obtained by adding the manufacturer's list price to the federal tax, duties, and transportation costs to the United States. The tax attaches at the time the tobacco products are received by the distributor in this state. The tax shall be passed on to the ultimate consumer of the tobacco products. All tobacco products received in this state for sale or distribution within this state, except tobacco products actually sold as provided in sub. (2)
, shall be subject to such tax.
Tobacco products sold to or by post exchanges of the U.S. armed forces, to or by federally operated veterans hospitals in this state, and tobacco products sold to an interstate carrier of passengers for hire to be resold to bona fide passengers actually being transported and tobacco products sold for shipment outside this state in interstate commerce are not subject to the tax.
See also ch. Tax 9
, Wis. adm. code.
Distributors, monthly returns. 139.77(1)
On or before the 15th day of each month, every distributor with a place of business in this state shall file a return showing the quantity and taxable price of each tobacco product brought, or caused to be brought, into this state for sale; or made, manufactured or fabricated in this state for sale in this state, during the preceding month. Every distributor outside this state shall file a return showing the quantity and taxable price of each tobacco product shipped or transported to retailers in this state to be sold by those retailers during the preceding month. At the time that the return is filed, the distributor shall pay the tax.
As soon as practicable after any return is filed, the department shall examine each return and correct it, if necessary, according to its best judgment and information. If the department finds that any amount of tax is due from the taxpayer and unpaid, it shall notify the taxpayer of the deficiency, stating that it proposes to assess the amount due together with interest and penalties. If a deficiency disclosed by the department's examination cannot be allocated to one or more particular months, the department shall notify the taxpayer of the deficiency, stating its intention to assess the amount due for a given period without allocating it to any particular months.
If, within 60 days after the mailing of notice of the proposed assessment, the taxpayer files a protest to the proposed assessment and requests a hearing on it, the department shall give notice to the taxpayer of the time and place fixed for the hearing, shall hold a hearing on the protest and shall issue a final assessment to the taxpayer for the amount found to be due as a result of the hearing. If a protest is not filed within 60 days, the department shall issue a final assessment to the taxpayer. In any action or proceeding in respect to the proposed assessment the taxpayer shall have the burden of establishing the incorrectness or invalidity of any final assessment made by the department.
If any taxpayer required to file any return fails to do so within the time prescribed, the taxpayer shall, on the written demand of the department, file the return within 20 days after the mailing of it and at the same time pay the tax due on its basis. If the taxpayer fails within that time to file the return, the department shall prepare the return from its own knowledge and from the information that it obtains and on that basis shall assess a tax, which shall be paid within 10 days after the department has mailed to the taxpayer a written notice of the amount and a demand for its payment. In any action or proceeding in respect to the assessment, the taxpayer shall have the burden of establishing the incorrectness or invalidity of any return or assessment made by the department because of the failure of the taxpayer to make a return.
All taxes are due not later than the 15th day of the month following the calendar month in which they were incurred.
The department may recover the amount of any tax due and unpaid, interest and any penalty in a civil action. The collection of the tax, interest or penalty is not a bar to any prosecution under s. 139.85 (1)
A tax is imposed upon the use or storage by consumers of tobacco products in this state at the rate, for tobacco products, not including moist snuff, of 71 percent of the cost of the tobacco products and, for moist snuff, at the rate of 100 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products. The tax imposed under this subsection on cigars shall not exceed an amount equal to 50 cents for each cigar. The tax does not apply if the tax imposed by s. 139.76 (1)
on the tobacco products has been paid or if the tobacco products are exempt from the tobacco products tax under s. 139.76 (2)
On or before the 15th day of each month, every consumer who during the preceding month has acquired title to or possession for use or storage in this state of tobacco products upon which the tax imposed by s. 139.76 (1)
has not been paid shall file a return showing the quantity of tobacco products acquired. At the time when the return is filed, the consumer shall pay the tax.
If any return is not filed within the time specified in this section, a penalty of 5 percent of the tax, with an additional 5 percent for each additional 30 days or fraction thereof up to a maximum of 25 percent is imposed, but the penalty for failing to file timely shall not be less than $10. The department may for good cause shown extend the time for filing the return without penalty.
(4) Sections 139.30
relating to enforcement of the excise tax imposed by s. 139.31
apply to enforcement of the use tax imposed by this section.
Permits; distributor; subjobber. 139.79(1)
No person may engage in the business of a distributor or subjobber of tobacco products at any place of business unless that person has filed an application for and obtained a permit from the department to engage in that business at such place.
Any person holding a cigarette distributor permit under s. 139.34
may obtain a tobacco products distributor permit at no charge, and any person holding a cigarette jobber permit under s. 139.34
may obtain a tobacco products subjobber permit at no charge.
If tobacco products upon which the tax has been reported and paid are shipped or transported by the distributor to consumers to be consumed outside the state or to retailers or subjobbers outside the state to be sold by those retailers or subjobbers outside the state or are returned to the manufacturer by the distributor or destroyed by the distributor, the tax may be refunded or credited to the distributor, as prescribed by the department. Any overpayment of the tax imposed under s. 139.78
may be refunded or credited to the taxpayer, as prescribed by the department.
History: 1981 c. 20
Bad debt deductions. 139.801(1)
In this section, “bad debt" means an amount that is equal to the purchase price of tobacco products, if such amount may be claimed as a deduction under section 166
of the Internal Revenue Code. “Bad debt" does not include financing charges, interest on the wholesale price of tobacco products, uncollectible amounts on property that remains in the seller's possession until the full purchase price is paid, expenses incurred in attempting to collect any debt, debts sold or assigned to 3rd parties for collection, and repossessed property.
A distributor who pays the taxes imposed under s. 139.76
may claim as a deduction on a return under s. 139.77
the amount of any such taxes that are attributable to bad debt that the distributor writes off as uncollectible in the distributor's books and records and that is eligible to be deducted as bad debt for federal income tax purposes, regardless of whether the distributor is required to file a federal income tax return. A distributor who claims a deduction under this section shall claim the deduction on the return under s. 139.77
that is submitted for the period in which the distributor writes off the amount of the deduction as uncollectible in the distributor's books and records and in which such amount is eligible to be deducted as bad debt for federal income tax purposes. If the distributor subsequently collects in whole or in part any bad debt for which a deduction is claimed under this section, the distributor shall include the amount collected in the return filed for the period in which the amount is collected and shall pay the tax with the return.
A distributor who claims a deduction under this section shall submit with the return under sub. (2)
all of the following:
A copy of the original invoice for the sale of tobacco products that represents bad debt.
Evidence that the tobacco products described in the invoice under par. (a)
were delivered to the person who ordered them.
Evidence that the person who ordered and received the tobacco products did not pay the distributor for the tobacco products.
Evidence that the distributor used reasonable collection practices in attempting to collect the amount owed under par. (c)
Any person who possesses tobacco products for which the taxes imposed under this subchapter have not been paid and have been claimed as a deduction under this section shall file a report as prescribed by the department, pay the taxes imposed under this subchapter on the tobacco products, and be subject to this subchapter in the same manner as is provided for persons who hold valid permits under this subchapter.
History: 2005 a. 25
If the property of any purchaser of tobacco products from any permittee under this subchapter is seized upon any intermediate or final process of any court in this state, or if the business of any purchaser of tobacco products from any permittee under this subchapter is suspended by the action of creditors or put into the hands of any assignee, receiver, or trustee, all amounts that are due from the purchaser to any permittee for taxes imposed under this subchapter that the permittee has paid to the state for tobacco products purchased from the permittee shall be considered preferred claims, and shall be paid in full, and the permittee shall be a preferred creditor.
History: 2005 a. 25
Refunds to Indian tribes.
The department may refund the taxes collected under s. 139.76 (1)
in respect to sales on reservations or trust lands of an Indian tribe to the tribal council of the tribe having jurisdiction over the reservation or trust land on which the sale is made only if all of the following conditions are fulfilled:
The tribal council has filed a claim for the refund with the department.
The tribal council has approved the retailer.
The land on which the sale occurred was designated a reservation or trust land on or before January 1, 1983, or on a later date as determined by an agreement between the department and the tribal council.
The tobacco products were not delivered by the retailer to the buyer by means of a common carrier, a contract carrier or the U.S. postal service.
The retailer has not sold the tobacco products to another retailer or to a subjobber.
History: 1999 a. 9
; 2009 a. 28
Agreements with Indian tribes.
The department may enter into agreements with Indian tribes to provide for the refunding of the tobacco products tax imposed under s. 139.76 (1)
. If the department enters into an agreement with an Indian tribe, the agreement may provide for refunding 100 percent of that tax on tobacco products sold on the tribal reservation to enrolled members of the tribe residing on the tribal reservation and may provide for refunding 50 percent of that tax on tobacco products sold on the tribal reservation to persons who are not enrolled members of the tribe residing on the tribal reservation.
History: 1999 a. 9
No person may sell or take orders for tobacco products for resale in this state for any manufacturer or permittee unless the person has filed an application for and obtained a valid certificate under s. 73.03 (50)
and a salesperson's permit from the department. No manufacturer or permittee shall authorize any person to sell or take orders for tobacco products in this state unless the person has filed an application for and obtained a valid certificate under s. 73.03 (50)
and a salesperson's permit. Each application for a permit shall disclose the name and address of the employer and shall remain effective only while the salesperson represents the named employer. If the salesperson is thereafter employed by another manufacturer or permittee the salesperson shall obtain a new salesperson's permit. Each manufacturer and permittee shall notify the department within 10 days after the resignation or dismissal of any salesperson holding a permit.
Any person holding a cigarette salesperson's permit under s. 139.37
may obtain a tobacco products salesperson's permit at no charge.
Records, returns. 139.82(1)(1)
Every manufacturer located out of the state shall keep records of all sales of tobacco products shipped into this state. Every manufacturer located in this state shall keep records of production, sales and withdrawals of tobacco products. Every distributor shall keep records of purchases and sales of tobacco products. Every subjobber shall keep records of all purchases and disposition of tobacco products. Every warehouse operator shall keep records of receipts and withdrawals of tobacco products. All records shall be accurate and complete and be kept in a manner prescribed by the department. These records shall be preserved on the premises described in the permit in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the department.
Except as provided in par. (b)
, every permittee shall render a true and correct invoice of every sale of tobacco products at wholesale and shall on or before the 15th day of each calendar month file a verified report of all tobacco products purchased, sold, received, warehoused or withdrawn during the preceding calendar month.
The department may allow any subjobber permittee who does not sell tobacco products, except for those on which the tax under this subchapter is paid, to file a quarterly report. The quarterly report shall be filed on or before the 15th day of the next month following the close of each calendar quarter. The report shall specify the value of tobacco products purchased and sold during the preceding calendar quarter.
The department shall prescribe reasonable and uniform methods of keeping records and making reports and shall prescribe and furnish the necessary report forms.
If the department finds that the records of any permittee are not kept in the prescribed form or are in such condition that an unusual amount of time is required to determine from them the amount of tax due, the department shall give notice of such fact to that permittee and require that the records be revised and kept in the prescribed form. If that permittee fails to comply within 30 days that permittee shall pay the expenses reasonably attributable to a proper examination and tax determination at the rate of $30 per day of each auditor. The department shall send a bill for expenses and the permittee shall pay the amount of the bill within 10 days.
If any permittee fails to file a report when due the permittee shall be required to pay a late filing fee of $10. A report that is mailed shall be considered filed in time if it is mailed in a properly addressed envelope with first class postage prepaid, if the envelope is officially postmarked on the date due, and if the report is actually received by the department or at the destination that the department prescribes within 5 days of the due date. A report that is not mailed is timely if it is received on or before the due date by the department or at the destination that the department prescribes.
(6) Sections 71.78 (1)
, and (4)
and 71.83 (2) (a) 3.
, relating to confidentiality of income and franchise tax returns, apply to any information obtained from any person on a cigarette tax return, report, schedule, exhibit, or other document or from an audit report pertaining to the return, report, schedule, exhibit, or document, except that the department shall publish on its Internet site, at least quarterly, a current list of permits issued to distributors and jobbers under s. 139.34
and include on the list the name and address of the permit holder and the date on which the department issued the permit.
The department may inspect the business records of any retailer doing business on a reservation or on an Indian tribe's trust land.
Each distributor shall collect and remit the excise tax imposed by s. 139.76 (1)
on tobacco products not exempt from the tobacco products tax under s. 139.76 (2)
, with the reports required to be filed under this section.
Administration and enforcement. Sections 139.355
, as they apply to the tax under subch. II
, apply to the administration and enforcement of this subchapter.