LRB-1126/1
JK:lmk:rs
2005 - 2006 LEGISLATURE
March 18, 2005 - Introduced by Representatives Molepske, Hines, Lehman,
Ainsworth, Black, Bies, Berceau, Gunderson, Pope-Roberts, Sheridan,
Hahn, Albers, Ott, Colon and Seidel, cosponsored by Senators Roessler,
Hansen and Lassa. Referred to Committee on State Affairs.
AB249,2,2
1An Act to repeal 139.32 (4), 139.34 (1) (b) and 139.34 (1) (c) 1. to 6.;
to amend
2134.65 (1), 134.65 (2) (a), 134.65 (5), 134.66 (2) (a), 134.66 (2) (am), 134.66 (2)
3(e), 139.30 (3), 139.30 (10), 139.32 (1), 139.32 (5), 139.32 (5m), 139.32 (6),
4139.321 (1) (intro.), 139.321 (1) (a) 1., 139.33 (3), 139.34 (1) (a), 139.34 (1) (c)
5(intro.), 139.34 (4), 139.34 (6), 139.34 (8), 139.35 (1), 139.37 (1) (a), 139.38 (1),
6139.38 (2), 139.395, 139.40 (2), 139.44 (3), 139.44 (4), 139.44 (7), 139.44 (8) (a)
7and (b), 139.45, 139.75 (2), 139.75 (4) (a), 139.75 (4) (c), 139.75 (7), 139.75 (8),
8139.79 (title), 139.79 (1), 139.79 (2), 139.81 (1) and 139.81 (2); and
to create
920.566 (1) (gc), 134.65 (1r), 134.66 (1) (am), 134.66 (3m), 139.30 (1m), 139.30
10(2n), 139.30 (2p), 139.30 (8s), 139.34 (1) (c) 1m., 139.34 (1) (c) 2m., 139.34 (1) (c)
113m., 139.34 (1) (cm), 139.345, 139.38 (1m), 139.44 (6m), 139.75 (3g), 139.75 (3r),
12139.75 (4) (cm), 139.75 (5s), 139.76 (3), 139.78 (1m) and 139.795 of the statutes;
13relating to: selling cigarettes and tobacco products by direct marketing,
1granting rule-making authority, making an appropriation, and providing
2penalties.
Analysis by the Legislative Reference Bureau
Under current law, generally, a person may not sell cigarettes in this state as
a distributor, jobber, vending machine operator, or multiple retailer without having
a permit from the Department of Revenue (DOR). Also, a person may not sell tobacco
products in this state as a distributor or subjobber without having a permit from
DOR. A "jobber" is any person who acquires cigarettes from manufacturers or
distributors, stores the cigarettes, and sells the cigarettes to retailers for resale. A
"subjobber" is any person, other than a manufacturer or distributor, who buys
tobacco products from a distributor and who sells such products to any person other
than the ultimate consumer.
This bill prohibits a direct marketer from selling cigarettes or tobacco products
to consumers in this state without having the appropriate permit from DOR. Under
the bill, "direct marketer" is defined as any person who solicits or sells cigarettes or
tobacco products to consumers in this state by direct marketing. 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 at the time of sale on a premise that sells cigarettes or
tobacco products, including using newspapers, magazines, radio or television
broadcasts, mailings, the telephone, or the Internet.
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 no more than 30,000 cigarettes annually to consumers in this
state, the fee is $1,000. If the direct marketer sells more than 30,000 but less than
600,001 cigarettes annually to consumers in this state, the fee is $5,000. If the direct
marketer sells more than 600,000 cigarettes annually to consumers in this state, the
fee is $10,000. 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 or personal check 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 a government issued
identification 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:
AB249, s. 1
1Section
1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
2the following amounts for the purposes indicated:
-
See PDF for table ![PDF](https://docs.legis.wisconsin.gov/assets/image/file_acrobat.gif)
AB249, s. 2
3Section
2. 20.566 (1) (gc) of the statutes is created to read:
AB249,4,24
20.566
(1) (gc)
Administration of cigarette and tobacco product direct
5marketing permits. From the moneys received from permits issued and penalties
6assessed under ss. 139.345, 139.40 (2), and 139.795, the amounts in the schedule for
1enforcing and administering cigarette and tobacco product direct marketing permits
2and penalties under ss. 139.345, 139.40 (2), and 139.795.
AB249, s. 3
3Section
3. 134.65 (1) of the statutes is amended to read:
AB249,4,114
134.65
(1) No person
, except a person who holds a valid permit under s. 139.345
5or 139.795 and whose business premises is not physically located in this state, shall
6in any manner, or upon any pretense, or by any device, directly or indirectly sell,
7expose for sale, possess with intent to sell, exchange, barter, dispose of or give away
8any cigarettes or tobacco products to any person not holding a license as herein
9provided or a permit under ss. 139.30 to 139.41 or 139.79 without first obtaining a
10license from the clerk of the city, village or town wherein such privilege is sought to
11be exercised.
AB249, s. 4
12Section
4. 134.65 (1r) of the statutes is created to read:
AB249,4,1413
134.65
(1r) (a) No license under sub. (1) may be issued to any person to whom
14any of the following applies:
AB249,4,1615
1. Subject to ss. 111.321, 111.322, and 111.335, the person has an arrest record
16or a conviction record.
AB249,4,1817
2. Subject to ss. 111.321, 111.322, and 111.335, the person has been convicted
18of a felony, or as a repeat or habitual offender, unless pardoned.
AB249,4,1919
3. The person has not submitted proof as provided under s. 77.61 (11).
AB249,4,2520
(b) The requirements under par. (a) apply to all partners of a partnership, all
21members of limited liability company, all agents of a limited liability company or
22corporation, and all officers of a corporation. Subject to ss. 111.321, 111.322, and
23111.335, if a business entity has been convicted of a crime, the entity may not be
24issued a license under sub. (1) unless the entity has terminated its relationship with
25the individuals whose actions directly contributed to the conviction.
AB249, s. 5
1Section
5. 134.65 (2) (a) of the statutes is amended to read:
AB249,5,72
134.65
(2) (a)
Except Subject to sub. (1r), and except as provided in par. (b),
3upon filing of a proper written application a license shall be issued on July 1 of each
4year or when applied for and continue in force until the following June 30 unless
5sooner revoked. The city, village or town may charge a fee for the license of not less
6than $5 nor more than $100 per year which shall be paid to the city, village or town
7treasurer before the license is issued.
AB249, s. 6
8Section
6. 134.65 (5) of the statutes is amended to read:
AB249,5,209
134.65
(5) Any person violating this section shall be fined not more than
$100 10$1,000 nor less than
$25 $500 for the first offense and
shall be fined not more than
11$200 $5,000 nor less than
$25 $1,000 or imprisoned not exceeding 180 days or both 12for the 2nd or subsequent offense.
If upon such 2nd or subsequent violation, the
13person so violating this section was personally guilty of a failure to exercise due care
14to prevent violation thereof, the person shall be fined not more than $300 nor less
15than $25 or imprisoned not exceeding 60 days or both. Conviction
on a 2nd or
16subsequent offense shall immediately terminate the license of the person convicted
17of being personally guilty of such failure to exercise due care and the person shall not
18be entitled to another license hereunder for a period of 5 years thereafter, nor shall
19the person in that period act as the servant or agent of a person licensed hereunder
20for the performance of the acts authorized by such license.
AB249, s. 7
21Section
7. 134.66 (1) (am) of the statutes is created to read:
AB249,5,2222
134.66
(1) (am) "Direct marketer" has the meaning given in s. 139.30 (2n).
AB249, s. 8
23Section
8. 134.66 (2) (a) of the statutes is amended to read:
AB249,6,724
134.66
(2) (a) No retailer,
direct marketer, manufacturer, distributor, jobber or
25subjobber, no agent, employee or independent contractor of a retailer,
direct
1marketer, manufacturer, distributor, jobber or subjobber and no agent or employee
2of an independent contractor may sell or provide for nominal or no consideration
3cigarettes or tobacco products to any person under the age of 18, except as provided
4in s. 254.92 (2) (a). A vending machine operator is not liable under this paragraph
5for the purchase of cigarettes or tobacco products from his or her vending machine
6by a person under the age of 18 if the vending machine operator was unaware of the
7purchase.
AB249, s. 9
8Section
9. 134.66 (2) (am) of the statutes is amended to read:
AB249,6,169
134.66
(2) (am) No retailer,
direct marketer, manufacturer, distributor, jobber,
10subjobber, no agent, employee or independent contractor of a retailer,
direct
11marketer, manufacturer, distributor, jobber or subjobber and no agent or employee
12of an independent contractor may provide for nominal or no consideration cigarettes
13or tobacco products to any person except in a place where no person younger than 18
14years of age is present or permitted to enter unless the person who is younger than
1518 years of age is accompanied by his or her parent or guardian or by his or her spouse
16who has attained the age of 18 years.
AB249, s. 10
17Section
10. 134.66 (2) (e) of the statutes is amended to read:
AB249,6,1918
134.66
(2) (e) No retailer
or direct marketer may sell cigarettes in a form other
19than as a package or container on which a stamp is affixed under s. 139.32 (1).
AB249, s. 11
20Section
11. 134.66 (3m) of the statutes is created to read:
AB249,6,2321
134.66
(3m) Defense of direct marketer. Proof of any of the following facts
22by a direct marketer who sells cigarettes or tobacco products to a person under the
23age of 18 is a defense to any prosecution for a violation under sub. (2) (a):
AB249,6,2524
(a) That the direct marketer used a mechanism, approved by the department
25of revenue, for verifying the age of the purchaser.
AB249,7,2
1(b) That the purchaser falsely represented that he or she had attained the age
2of 18 and presented a copy or facsimile of a government issued identification.
AB249,7,43
(c) That the name and birthdate of the purchaser, as indicated by the purchaser,
4matched the name and birthdate on the identification presented under par. (b).
AB249,7,75
(d) That the sale was made in good faith, in reasonable reliance on the
6mechanism described in par. (a) and the representation and identification under
7pars. (b) and (c), and in the belief that the purchaser had attained the age of 18.
AB249, s. 12
8Section
12. 139.30 (1m) of the statutes is created to read:
AB249,7,119
139.30
(1m) "Consumer" means any individual who receives cigarettes for his
10or her personal use or consumption or any individual who has title to or possession
11of cigarettes for any purpose other than for sale or resale.
AB249, s. 13
12Section
13. 139.30 (2n) of the statutes is created to read:
AB249,7,1413
139.30
(2n) "Direct marketer" means any person who solicits or sells cigarettes
14to consumers in this state by direct marketing.
AB249, s. 14
15Section
14. 139.30 (2p) of the statutes is created to read:
AB249,7,1916
139.30
(2p) "Direct marketing" means publishing or making accessible an offer
17for the sale of cigarettes to consumers in this state, or selling cigarettes to consumers
18in this state, using any means by which the consumer is not physically present at the
19time of sale on a premise that sells cigarettes.
AB249, s. 15
20Section
15. 139.30 (3) of the statutes is amended to read:
AB249,7,2521
139.30
(3) "Distributor" means any person who acquires unstamped cigarettes
22from the manufacturer thereof
or from the first importer of record thereof, affixes
23stamps to the packages or other containers, stores them and sells them to other
24permittees or to retailers for resale
or and who
acquires may acquire stamped
25cigarettes from another
permittee distributor for such sales.
AB249, s. 16
1Section
16. 139.30 (8s) of the statutes is created to read:
AB249,8,42
139.30
(8s) "Person" means any individual, sole proprietorship, partnership,
3limited liability company, corporation, or association, or any owner of a single-owner
4entity that is disregarded as a separate entity under ch. 71.
AB249, s. 17
5Section
17. 139.30 (10) of the statutes is amended to read:
AB249,8,86
139.30
(10) "Retailer" means any person who sells, exposes for sale or possesses
7with intent to sell to consumers any cigarettes
by any means in which the consumer
8is physically present at the time of sale on a premises that sells cigarettes.
AB249, s. 18
9Section
18. 139.32 (1) of the statutes is amended to read:
AB249,8,1610
139.32
(1) The tax imposed by s. 139.31 (1) shall be paid. To evidence the
11payment, the department shall provide stamps. A person who has paid the tax shall
12affix stamps of the proper denomination to each package in which cigarettes are
13packed, prior to the first sale within this state. First sale does not include a sale by
14a manufacturer to a distributor
or to a direct marketer or by a distributor to a
15permittee who has obtained department approval as provided for in s. 139.321 (1) (a)
162. The tax shall be paid only once on each package or container.
AB249, s. 19
17Section
19. 139.32 (4) of the statutes is repealed.
AB249, s. 20
18Section
20. 139.32 (5) of the statutes is amended to read:
AB249,8,2119
139.32
(5) Manufacturers
, direct marketers, and distributors having a permit
20from the secretary shall receive a discount of 1.6% of the tax
paid on stamp
21purchases.
AB249, s. 21
22Section
21. 139.32 (5m) of the statutes is amended to read:
AB249,8,2423
139.32
(5m) Distributors
, direct marketers, and manufacturers shall pay to
24the department the cost of printing and shipping those stamps.
AB249, s. 22
25Section
22. 139.32 (6) of the statutes is amended to read:
AB249,9,4
1139.32
(6) Manufacturers
, direct marketers, and distributors having a permit
2from the secretary may purchase stamps on credit. The secretary may require
3manufacturers
, direct marketers, and distributors who purchase stamps on credit
4to file under the conditions prescribed by the secretary by rule.
AB249, s. 23
5Section
23. 139.321 (1) (intro.) of the statutes is amended to read:
AB249,9,86
139.321
(1) (intro.) It is unlawful for any person to possess
in excess of 400 7cigarettes unless the required stamps are properly affixed as provided in ss. 139.32
8(1) and 139.33 (4).
AB249, s. 24
9Section
24. 139.321 (1) (a) 1. of the statutes is amended to read:
AB249,9,1110
139.321
(1) (a) 1. Manufacturers,
direct marketers, distributors or warehouse
11operators possessing valid permits issued by the secretary.
AB249, s. 25
12Section
25. 139.33 (3) of the statutes is amended to read:
AB249,9,2413
139.33
(3) No person other than
a member of the armed forces, as specified in
14this subsection, a licensed distributor
, or a licensed direct marketer may import into
15this state
more than 400 cigarettes on which the excise tax imposed by s. 139.31 has
16not been paid and the container of which does not bear proper stamps. Within 15
17days, any such person importing cigarettes shall file a declaration of such cigarettes
18imported and shall remit therewith the tax on such cigarettes imposed by this
19section. Members of the armed forces shall not be required to report or pay the tax
20on cigarettes in their possession if such cigarettes are issued to them by the U.S.
21government or any of its subdivisions or were purchased in any armed forces post
22exchange or service store. If the use tax imposed by this section is not paid when due,
23it shall become delinquent and the person liable for it shall pay, in addition, a penalty
24of $25 for each 200 cigarettes. Interest on the delinquent tax and penalty shall accrue
1at the rate of 1.5% per month or each fraction of a month from the date the tax became
2due until paid.
AB249, s. 26
3Section
26. 139.34 (1) (a) of the statutes is amended to read:
AB249,10,84
139.34
(1) (a) No person may manufacture cigarettes in this state or sell
5cigarettes in this state as a distributor, jobber, vending machine operator
, direct
6marketer, or multiple retailer and no person may operate a warehouse in this state
7for the storage of cigarettes for another person without first filing an application for
8and obtaining the proper permit to perform such operations from the department.
AB249, s. 27
9Section
27. 139.34 (1) (b) of the statutes is repealed.