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:
139.33 (3) No person other than a member of the armed forces, as specified in this subsection, a licensed distributor, or a bonded direct marketer who is authorized by the department to purchase and affix tax stamps may import into this state more than 400 cigarettes on which the excise tax imposed by s. 139.31 has not been paid and the container of which does not bear proper stamps. Within 15 days, any such person importing cigarettes shall file a declaration of such cigarettes imported and shall remit therewith the tax on such cigarettes imposed by this section. Members of the armed forces shall not be required to report or pay the tax on cigarettes in their possession if such cigarettes are issued to them by the U.S. government or any of its subdivisions or were purchased in any armed forces post exchange or service store for their personal use or consumption. If the use tax imposed by this section is not paid when due, it shall become delinquent and the person liable for it shall pay, in addition, a penalty of $25 for each 200 cigarettes. Interest on the delinquent tax and penalty shall accrue at the rate of 1.5% per month or each fraction of a month from the date the tax became due until paid.
SECTION 33. 139.34 (1) (a) of the statutes is amended to read:
139.34 (1) (a) No person may manufacture cigarettes in this state or sell cigarettes in this state as a distributor, manufacturer, jobber, vending machine operator, direct marketer, or multiple retailer and no person may operate a warehouse in this state for the storage of cigarettes for another person without first filing an application for and obtaining the proper permit to perform such operations from the department.
SECTION 34. 139.34 (1) (b) of the statutes is repealed.
SECTION 35. 139.34 (1) (c) (intro.) of the statutes is amended to read:
139.34 (1) (c) (intro.) Subject to ss. 111.321, 111.322 and 111.335, no No permit under this section may be granted to any person to whom any of the following applies:
SECTION 36. 139.34 (1) (c) 1. to 6. of the statutes are repealed.
SECTION 37. 139.34 (1) (c) 1m. of the statutes is created to read:
139.34 (1) (c) 1m. Subject to ss. 111.321, 111.322, and 111.335, the person has an arrest record or a conviction record.
SECTION 38. 139.34 (1) (c) 2m. of the statutes is created to read:
139.34 (1) (c) 2m. 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.
SECTION 39. 139.34 (1) (c) 3m. of the statutes is created to read:
139.34 (1) (c) 3m. The person has not submitted proof as provided under s. 77.61 (11).
SECTION 40. 139.34 (1) (cm) of the statutes is created to read:
139.34 (1) (cm) The requirements under par. (c) apply to all partners of a partnership, all members of a limited liability company, all agents, director, and shareholders, 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 permit under this subsection unless the entity has terminated its relationship with the individuals whose actions directly contributed to the conviction.
SECTION 41. 139.34 (3) of the statutes is amended to read:
139.34 (3) No distributor or bonded direct marketer may affix stamps to cigarette packages, as provided in s. 139.32, unless the distributor or bonded direct marketer certifies to the department, in a manner prescribed by the department, that the distributor or bonded direct marketer purchases cigarettes directly from a manufacturer.
SECTION 42. 139.34 (4) of the statutes is amended to read:
139.34 (4) A separate permit shall be required of and issued to each class of permittee and the holder of any permit shall perform only the operations thereby authorized. Such permit shall not be transferable from one person to another or from one premises to another. A separate permit shall be required for each place where cigarettes are stamped or where cigarettes are stored for sale at wholesale or, through vending machines or multiple retail outlets, or by direct marketing.
SECTION 43. 139.34 (6) of the statutes is amended to read:
139.34 (6) A vending machine operator or a multiple retailer may acquire unstamped cigarettes from the manufacturers thereof and affix the stamps to packages or other containers only if the vending machine operator or multiple retailer also holds a permit as a distributor or bonded direct marketer.
SECTION 44. 139.34 (8) of the statutes is amended to read:
139.34 (8) The holder of a warehouse permit is entitled to store cigarettes on the premises described in the permit. The warehouse permit shall not authorize the holder to sell cigarettes. Unstamped cigarettes stored in a warehouse for a manufacturer, bonded direct marketer, or distributor may be delivered only to a person holding a permit as a manufacturer or, distributor, or bonded direct marketer who is authorized by the department to purchase and affix tax stamps.
SECTION 45. 139.345 of the statutes is created to read:
139.345 Direct marketing. (1) (a) (intro.) No person may sell cigarettes to consumers in this state as a direct marketer or solicit sales of cigarettes to consumers in this state by direct marketing unless the person has obtained a permit from the department to make such sales or solicitations. The person shall file an application for a permit under this subsection with the department, in the manner prescribed by the department, and shall submit the following fee with the application:
1. If the person sells less than 600,000 cigarettes annually to consumers in this state by direct marketing, $500.
2. If the person sells 600,000 or more cigarettes annually to consumers in this state by direct marketing, $1,000.
(b) A permit issued under par. (a) expires on December 31 of each year.
(c) The department may not issue a permit to a person under par. (a) unless the person certifies to the department, in the manner prescribed by the department, that the person shall acquire stamped cigarettes from a licensed distributor or unstamped cigarettes from the manufacturer thereof, pay the tax imposed under this subchapter on all unstamped cigarettes and affix stamps to the cigarette packages or containers as provided under s. 139.32 (1), store such packages or containers, and sell only such packages or containers to consumers in this state by direct marketing; or acquire cigarettes from a distributor, to the packages or containers of which stamps have been affixed as provided under s. 139.32 (1), and sell only such packages or containers to consumers in this state by direct marketing.
(d) No person may be issued a permit under this subsection unless the person certifies to the department, in the manner prescribed by the department, that all cigarette sales to consumers in this state shall be credit card transactions; that the invoices and all means of solicitation for all shipments of cigarette sales from the person shall bear the person's name and address and permit ultimately issued under this subsection; and that the person shall provide the department any information the department considers necessary to administer this section.
(2) (a) No person may purchase tax stamps in excess of the number of cigarette sales specified in his or her permit under sub. (1) (a) unless the person pays the permit fee under sub. (1) (a) that is applicable to the excess amount.
(b) No person may sell cigarettes in excess of the number of cigarette sales specified in his or her permit under sub. (1) (a) unless the person pays the permit fee under sub. (1) (a) that is applicable to the excess sales. Any person who sells cigarettes in excess of the number of cigarette sales specified in his or her permit shall pay a penalty to the department of $1,000 or an amount that is equal to $50 for every 200 cigarettes, or fraction of 200 cigarettes, whichever is greater.
(3) (a) No person may sell cigarettes to consumers in this state by direct marketing unless the tax imposed under s. 139.31 (1) is paid on such cigarettes and stamps are affixed to the cigarette packages or containers as provided under s. 139.32.
(b) No person may sell cigarettes to consumers in this state by direct marketing unless the tax imposed under s. 77.52 or 77.53 is paid on the sale of such cigarettes.
(c) No person may sell cigarettes to consumers in this state by direct marketing unless the cigarette brands are approved by the department and listed in the directory of certified tobacco product manufacturers and brands as provided under s. 895.12 (2) (b).
(4) No person may sell cigarettes to a consumer in this state by direct marketing unless the person verifies the consumer's identity and that the consumer is at least 18 years of age by any of the following methods:
(a) The person uses a database, approved by the department, that includes information based on public records to verify the consumer's age and identity.
(b) The person receives from the consumer, at the time of purchase, a notarized copy of an identification card, the name specified on the identification matches the name of the consumer, and the birth date on the identification verifies that the purchaser is at least 18 years of age.
(c) The person uses a mechanism, other than a mechanism under par. (a) or (b), for verifying the age and identity of a consumer that is approved by the department.
(5) Any person who, without having a valid permit under sub. (1), sells or solicits sales of cigarettes to consumers in this state by direct marketing shall pay a penalty to the department of $5,000 or an amount that is equal to $50 for every 200 cigarettes, or fraction of 200 cigarettes, sold to consumers in this state by direct marketing, whichever is greater.
(6) (a) No sale of cigarettes to a consumer in this state by direct marketing may exceed 10 cartons for each invoice or 20 cartons in a 30-day period for each purchaser or address.
(b) Any person who sells cigarettes that exceed the maximum amounts under par. (a) shall pay a penalty to the department of $5,000 or an amount that is equal to $50 for every 200 cigarettes, or major fraction of 200 cigarettes, sold above the maximum amounts, whichever is greater.
(c) Any person who purchases cigarettes that exceed the maximum amounts under par. (a) shall apply for a permit under s. 139.34 and shall pay a penalty to the department of $25 for every 200 cigarettes, or fraction of 200 cigarettes, purchased above the maximum amounts.
(7) No cigarettes may be shipped to a person who is under 18 years of age and no cigarettes may be shipped to a post-office box. Every package used to ship cigarettes that are sold as provided under this section and delivered to a person in this state shall be clearly labeled to indicate that the package contains cigarettes and may not be delivered to a person who is under 18 years of age.
SECTION 46. 139.35 (1) of the statutes is amended to read:
139.35 (1) TRANSFERS. No person may give, sell or lend any stamps to another and no person may accept, purchase or borrow any stamps from another. All sales and transfers of stamps may be made only by the secretary to permit holding manufacturers and, distributors, and bonded direct marketers who are authorized by the department to purchase and affix tax stamps.
