This bill prohibits a direct marketer from selling cigarettes or tobacco products to consumers in this state without having the appropriate permit from DOR. The bill defines "direct marketing" as publishing or making accessible an offer for the sale of cigarettes or tobacco products to consumers in this state, or selling cigarettes or tobacco products to consumers in this state, using any means by which the consumer is not physically present on a premise that sells cigarettes or tobacco products.
A direct marketer who sells cigarettes to consumers in this state must apply to DOR for a permit and submit a fee with the permit application based on the number of cigarettes that the direct marketer sells annually to consumers in this state. If the direct marketer sells less than 600,000 cigarettes annually to consumers in this state, the fee is $500. If the direct marketer sells 600,000 or more cigarettes annually to consumers in this state, the fee is $1,000. A direct marketer who sells tobacco products to consumers in this state must apply to DOR for a permit and submit a $500 fee with the application. Permits issued to direct marketers expire each year on December 31.
Under the bill, DOR will not issue a permit to a direct marketer unless the direct marketer certifies to DOR that all sales of cigarettes or tobacco products to consumers in this state will be credit card transactions; that the invoices for all shipments of cigarettes or tobacco products will bear the direct marketer's name, address, and permit number; and that the direct marketer will provide DOR any information that DOR considers necessary for cigarette and tobacco products tax and permit purposes. The direct marketer may not sell any cigarettes or tobacco products unless the sales tax, use tax, cigarette tax, or tobacco products tax, as appropriate, has been paid on the sale of the cigarettes or tobacco products. In addition, a direct marketer may not sell cigarettes or tobacco products in this state unless the direct marketer has a mechanism, approved by DOR, for verifying the age of the purchaser, and the direct marketer receives from the purchaser, at the time of purchase, a copy or facsimile of an identification card and the name specified on the identification matches the name of the purchaser.
Under the bill, cigarettes and tobacco products may not be shipped to a person who is under 18 years of age and may not be shipped to a post-office box.
Under current law, a person may not sell cigarettes or tobacco products to consumers in this state unless the person obtains a license from each city, village, or town in which the person intends to sell cigarettes or tobacco products. The city, village, or town may charge not less than $5 annually nor more than $100 annually for such a license. Under the bill, no city, village, or town may issue such a license to any person who has an arrest or conviction record related to selling cigarettes or tobacco products or who has not submitted proof to the city, village, or town that he or she holds a valid retailer's permit issued by DOR.
For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
SECTION 1. 77.61 (11) of the statutes is amended to read:
77.61 (11) Any city, village or town clerk or other official whose duty it is to issue licenses or permits to engage in a business involving the sale at retail of tangible personal property subject to tax under this subchapter, or the furnishing of services so subject to tax, shall, before issuing such license or permit, require proof that the person to whom such license or permit is to be issued is the holder of a seller's permit as required by or is registered to collect, report, and remit use tax under this subchapter or has been informed by an employee of the department that the department will issue a seller's permit to that person or register that person to collect, report, and remit use tax.
****NOTE: This SECTION involves a change in an appropriation that must be reflected in the revised schedule in s. 20.005, stats.
SECTION 2. 134.65 (1) of the statutes is amended to read:
134.65 (1) No person, except a person who holds a valid permit under s. 139.345 or 139.795 and who sells cigarettes or tobacco products solely as a direct marketer, shall in any manner, or upon any pretense, or by any device, directly or indirectly sell, expose for sale, possess with intent to sell, exchange, barter, dispose of or give away any cigarettes or tobacco products to any person not holding a license as herein provided or a permit under ss. 139.30 to 139.41 or 139.79 without first obtaining a license from the clerk of the city, village or town wherein such privilege is sought to be exercised.
SECTION 3. 134.65 (1n) of the statutes is created to read:
134.65 (1n) (a) The department of revenue shall prepare an application form for licenses issued under this section. In addition to the information required under sub. (1m), the form shall require all of the following information:
1. The applicant's history relevant to the applicant's fitness to hold a license under this section.
2. The kind of license for which the applicant is applying.
3. The premises where cigarettes or tobacco products will be sold or stored.
4. If the applicant is a corporation, the identity of the corporate officers and agent.
5. If the applicant is a limited liability company, the identity of the company members or managers and agent.
6. The applicant's trade name, if any.
7. Any other information required by the department.
(b) The department of revenue shall provide 1 copy of each application prepared under this subsection to each city, village, and town.
(c) Each applicant for a license under this section shall use the application form prepared under this subsection.
(d) 1. Each application for a license under this section shall be sworn to by the applicant and the applicant shall submit the application with the clerk of the city, village, or town where the intended place of sale is located.
2. Within 10 days of any change in any fact set forth in an application, the applicant or license holder shall file a written description of the change with the clerk of the city, village, or town where the application was submitted.
3. Any person may inspect applications submitted under this paragraph. The clerk of each city, village, or town where such applications are submitted shall retain all applications submitted under this paragraph, but may destroy all applications that have been retained for 5 years or longer.
SECTION 4. 134.65 (1r) of the statutes is created to read:
134.65 (1r) (a) No license under sub. (1) may be issued to any person to whom any of the following applies:
1. Subject to ss. 111.321, 111.322, and 111.335, the person has an arrest record or a conviction record.
2. Subject to ss. 111.321, 111.322, and 111.335, the person has been convicted of a felony, or as a repeat or habitual offender, unless pardoned.
3. The person has not submitted proof as provided under s. 77.61 (11).
(b) The requirements under par. (a) apply to all partners of a partnership, all members of limited liability company, all agents of a limited liability company or corporation, and all officers of a corporation. Subject to ss. 111.321, 111.322, and 111.335, if a business entity has been convicted of a crime, the entity may not be issued a license under sub. (1) unless the entity has terminated its relationship with the individuals whose actions directly contributed to the conviction.
SECTION 5. 134.65 (2) (a) of the statutes is amended to read:
134.65 (2) (a) Except Subject to sub. (1r), and except as provided in par. (b), upon filing of a proper written application a license shall be issued on July 1 of each year or when applied for and continue in force until the following June 30 unless sooner revoked. The city, village or town may charge a fee for the license of not less than $5 nor more than $100 per year which shall be paid to the city, village or town treasurer before the license is issued.
SECTION 6. 134.65 (5) of the statutes is amended to read:
134.65 (5) Any person violating this section shall be fined not more than $100 $1,000 nor less than $25 $500 for the first offense and not more than $200 $5,000 nor less than $25 $1,000 or imprisoned not exceeding 180 days or both for the 2nd or subsequent offense. If upon such 2nd or subsequent violation, the person so violating this section was personally guilty of a failure to exercise due care to prevent violation thereof, the person shall be fined not more than $300 nor less than $25 or imprisoned not exceeding 60 days or both. Conviction Upon conviction of a 2nd or subsequent offense, the court shall immediately terminate the license of the person convicted of being personally guilty of such failure to exercise due care and the person shall not be entitled to another license hereunder for a period of 5 years thereafter, nor shall the person in that period act as the servant or agent of a person licensed hereunder for the performance of the acts authorized by such license.
SECTION 7. 134.66 (1) (a) of the statutes is amended to read:
134.66 (1) (a) "Cigarette" has the meaning given in s. 139.30 (1) (1m).
SECTION 8. 134.66 (1) (am) of the statutes is created to read:
134.66 (1) (am) "Direct marketer" has the meaning given in s. 139.30 (2n).
SECTION 9. 134.66 (2) (a) of the statutes is amended to read:
134.66 (2) (a) No retailer, direct marketer, manufacturer, distributor, jobber or subjobber, no agent, employee or independent contractor of a retailer, direct marketer, manufacturer, distributor, jobber or subjobber and no agent or employee of an independent contractor may sell or provide for nominal or no consideration cigarettes or tobacco products to any person under the age of 18, except as provided in s. 254.92 (2) (a). A vending machine operator is not liable under this paragraph for the purchase of cigarettes or tobacco products from his or her vending machine by a person under the age of 18 if the vending machine operator was unaware of the purchase.
SECTION 10. 134.66 (2) (am) of the statutes is amended to read:
134.66 (2) (am) No retailer, direct marketer, manufacturer, distributor, jobber, subjobber, no agent, employee or independent contractor of a retailer, direct marketer, manufacturer, distributor, jobber or subjobber and no agent or employee of an independent contractor may provide for nominal or no consideration cigarettes or tobacco products to any person except in a place where no person younger than 18 years of age is present or permitted to enter unless the person who is younger than 18 years of age is accompanied by his or her parent or guardian or by his or her spouse who has attained the age of 18 years.
SECTION 11. 134.66 (2) (d) of the statutes is amended to read:
134.66 (2) (d) No manufacturer, direct marketer, distributor, jobber, subjobber or retailer, or their employees or agents, may provide cigarettes or tobacco products for nominal or no consideration to any person under the age of 18.
SECTION 12. 134.66 (2) (e) of the statutes is amended to read:
134.66 (2) (e) No retailer or direct marketer may sell cigarettes in a form other than as a package or container on which a stamp is affixed under s. 139.32 (1).
SECTION 13. 134.66 (3m) of the statutes is created to read:
134.66 (3m) DEFENSE OF DIRECT MARKETER. Proof of all of the following facts by a direct marketer who sells cigarettes or tobacco products to a person under the age of 18 is a defense to any prosecution for a violation under sub. (2) (a):
(a) That the direct marketer used a mechanism, approved by the department of revenue, for verifying the age of the purchaser.
(b) That the purchaser falsely represented that he or she had attained the age of 18 and presented a copy or facsimile of an identification card.
(c) That the name and birthdate of the purchaser, as indicated by the purchaser, matched the name and birthdate on the identification presented under par. (b).
(d) That the sale was made in good faith, in reasonable reliance on the mechanism described in par. (a) and the representation and identification under pars. (b) and (c), and in the belief that the purchaser had attained the age of 18.
SECTION 14. 139.30 (1) of the statutes is renumbered 139.30 (1m).
SECTION 15. 139.30 (1d) of the statutes is created to read:
139.30 (1d) "Bonded direct marketer" means any person who acquires unstamped cigarettes from the manufacturer thereof, affixes stamps to the packages or other containers, stores them and sells them by direct marketing to consumers for their own personal use and who may also acquire stamped cigarettes from manufacturers or distributors for such sales.
SECTION 16. 139.30 (1s) of the statutes is created to read:
139.30 (1s) "Consumer" means any individual who receives cigarettes for his or her personal use or consumption or any individual who has title to or possession of cigarettes for any purpose other than for sale or resale.
SECTION 17. 139.30 (2n) of the statutes is created to read:
139.30 (2n) "Direct marketer" means a bonded direct marketer or a nonbonded direct marketer.
SECTION 18. 139.30 (2p) of the statutes is created to read:
139.30 (2p) "Direct marketing" means publishing or making accessible an offer for the sale of cigarettes to consumers in this state, or selling cigarettes to consumers in this state, using any means by which the consumer is not physically present at the time of sale on a premise that sells cigarettes.
SECTION 19. 139.30 (3) of the statutes is amended to read:
139.30 (3) "Distributor" means any person who acquires unstamped cigarettes from the manufacturer thereof, affixes stamps to the packages or other containers, stores them and sells them to other permittees or to retailers for resale or and who acquires may acquire stamped cigarettes from another permittee manufacturers or distributors for such sales.
SECTION 20. 139.30 (4n) of the statutes is created to read:
139.30 (4n) "Identification card" has the meaning given in s. 134.66 (1) (c).
SECTION 21. 139.30 (7) of the statutes is amended to read:
139.30 (7) "Manufacturer" means any person who directly manufactures cigarettes for the purpose of sale, including the authorized agent of a person who directly manufactures cigarettes for the purpose of sale.
SECTION 22. 139.30 (8d) of the statutes is created to read:
139.30 (8d) "Nonbonded direct marketer" means any person who acquires stamped cigarettes from the manufacturers or distributors, stores them, and sells them by direct marketing to consumers for their own personal use.
SECTION 23. 139.30 (8s) of the statutes is created to read:
139.30 (8s) "Person" means any individual, sole proprietorship, partnership, limited liability company, corporation, or association, or any owner of a single-owner entity that is disregarded as a separate entity under ch. 71.
SECTION 24. 139.30 (10) of the statutes is amended to read:
139.30 (10) "Retailer" means any person who sells, exposes for sale or possesses with intent to sell to consumers any cigarettes has the meaning given in s. 134.66 (1) (g).
SECTION 25. 139.32 (1) of the statutes is amended to read:
139.32 (1) The tax imposed by s. 139.31 (1) shall be paid. To evidence the payment, the department shall provide stamps. A person who has paid the tax shall affix stamps of the proper denomination to each package in which cigarettes are packed, prior to the first sale within this state. First sale does not include a sale by a manufacturer to a distributor or to a bonded direct marketer or by a distributor to a permittee who has obtained department approval as provided for in s. 139.321 (1) (a) 2. The tax shall be paid only once on each package or container.
SECTION 26. 139.32 (4) of the statutes is amended to read:
139.32 (4) In lieu of stamps the secretary may authorize impressions applied by the use of meter machines. The secretary shall prescribe by rule the type of impression and the kind of machines which may be used.
SECTION 27. 139.32 (5) of the statutes is amended to read:
139.32 (5) Manufacturers, bonded direct marketers, and distributors having a permit from the secretary who are authorized by the department to purchase tax stamps shall receive a discount of 1.6% of the tax paid on stamp purchases.
SECTION 28. 139.32 (5m) of the statutes is amended to read:
139.32 (5m) Distributors, bonded direct marketers, and manufacturers shall pay to the department the cost of printing and shipping those stamps.
SECTION 29. 139.32 (6) of the statutes is amended to read:
139.32 (6) Manufacturers, bonded direct marketers, and distributors having a permit from the secretary who are authorized by the department to purchase tax stamps may purchase stamps on credit. The secretary may require manufacturers, bonded direct marketers, and distributors who purchase stamps on credit to file under the conditions prescribed by the secretary by rule.
SECTION 30. 139.321 (1) (intro.) of the statutes is amended to read:
139.321 (1) (intro.) It is unlawful for any person to possess in excess of 400 cigarettes unless the required stamps are properly affixed as provided in ss. 139.32 (1) and 139.33 (4).
SECTION 31. 139.321 (1) (a) 1. of the statutes is amended to read:
139.321 (1) (a) 1. Manufacturers, bonded direct marketers, distributors or warehouse operators possessing valid permits issued by the secretary.
SECTION 32. 139.33 (3) of the statutes is amended to read:
