AB250: Bill Text

The bill authorizes DOJ employees to disclose, in connection with their official duties, the tax return information they are authorized to access under current law to a law enforcement investigator participating in a DOJ investigation. The disclosure must be limited to the information relevant to a particular matter in connection with the investigation.

The bill also specifies that federal and Wisconsin grand juries are authorized to access tax return information upon DOR's receipt of a grand jury subpoena.

Lottery

Under current law, no employee of the Lottery Division of DOR may purchase a lottery ticket or lottery share. The bill allows such an employee to purchase a lottery ticket or a lottery share, if the purchase is made on behalf of the Lottery Division of DOR as part of an official lottery investigation.

Also under current law, if a person alters or forges a lottery ticket, or utters or transfers an altered or forged lottery ticket, the person is guilty of a Class I felony. The bill adds that if a person counterfeits or illegally obtains a lottery ticket, or utters or transfers a counterfeit or illegally obtained lottery ticket, the person is also guilty of a Class I felony.

Under current law, a person who possesses an altered or forged lottery ticket or share with intent to defraud is guilty of a misdemeanor, subject to a fine of not more than $10,000 or imprisonment for not more than nine months or both. The bill adds that a person who possesses a counterfeit, illegally obtained, or previously redeemed lottery ticket is also guilty of a misdemeanor, subject to a fine of not more than $10,000 or imprisonment for not more than nine months or both.

Finally, under current law, lottery winnings are subject to withholdings for state taxes, child support, spousal support, maintenance or family support, assessments, fines, restitution, and surcharges. Under the bill, if a person transfers a winning lottery ticket to another person or claims a lottery prize from a transferred ticket with the intent to avoid these withholdings, the person is guilty of a misdemeanor, subject to a fine of not more than $10,000 or imprisonment for not more than nine months or both.

Possession of alcohol vapor devices

The bill prohibits a person from using, possessing, or selling an alcohol vapor device, which is a device that turns an alcohol beverage into a vapor or mist to be inhaled.

Penalties for evading excise taxes and unlawful possession of cigarettes

The bill increases the penalties for evading the excise taxes imposed on cigarettes, tobacco products, and vapor products.

Under current law, a person who attempts to evade these taxes, or who aids in or abets the evasion or attempted evasion of these taxes, may be fined not more than $10,000 or imprisoned for not more than nine months, or both.

Under the bill, a person who evades or attempts to evade these taxes, or who aids in or abets the evasion or attempted evasion of these taxes, is guilty of the following:

1. A Class A misdemeanor if the amount of the tax is no more than $2,500.

2. A Class I felony if the amount of the tax is more than $2,500, but no more than $5,000.

3. A Class H felony if the amount of the tax is more than $5,000, but no more than $10,000.

4. A Class G felony if the amount of the tax is more than $10,000, but no more than $100,000.

5. A Class F felony if the amount of tax is more than $100,000.

The bill also increases the penalties for the unlawful possession of cigarettes.

Under current law, a person who unlawfully possesses up to 6,000 cigarettes is subject to a fine of not more than $200 or imprisonment for not more than six months, or both. A person who unlawfully possesses more than 6,000 cigarettes but no more than 36,000 cigarettes is subject to a fine of not more than $1,000 or imprisonment for not more than one year in county jail, or both. A person who unlawfully possesses more than 36,000 cigarettes is guilty of a Class I felony.

Under the bill, the penalties are increased as follows:

1. A person who unlawfully possesses no more than 3,000 cigarettes may be fined not more than $1,000 or imprisoned for not more than one year, or both.

2. A person who unlawfully possesses more than 3,000 cigarettes but no more than 5,000 cigarettes is guilty of a Class I felony.

3. A person who unlawfully possesses more than 5,000 cigarettes but no more than 10,000 cigarettes is guilty of a Class H felony.

4. A person who unlawfully possesses more than 10,000 cigarettes is guilty of a Class F felony.

The bill also amends the definition of “racketeering activity" for purposes of the Wisconsin Organized Crime Control Act to include the attempt, conspiracy to commit, or commission of the felonies created under the bill related to evading excise taxes and unlawful possession of cigarettes.

Alcohol beverage permit reapplication

The bill provides that, if DOR refuses to issue, refuses to renew, or revokes an alcohol beverages permit, the applicant or permit holder may not reapply to DOR for the permit for a period of 12 months.

Possession of a still

The bill generally prohibits a person from possessing a still or other apparatus for manufacturing, rectifying, distilling, refining, or purifying intoxicating liquor other than wine. A person who violates this prohibition may be fined not more than $10,000 or imprisoned for not more than nine months or both. The prohibition does not apply to a person that holds an intoxicating liquor manufacturer's or rectifier's permit from DOR or that has registered the still or a distilled spirits plant under federal law.

Sales suppression devices and phantomware

Under the bill, any person who creates, designs, manufactures, sells, purchases, leases, installs, updates, repairs, services, transfers, uses, or possesses in this state phantomware or an automated sales suppression device, unless for a legitimate purpose, is guilty of a Class D felony. The bill also authorizes DOR to revoke any permit, license, or certificate issued by DOR for up to 10 years for violating this prohibition.

Under the bill, an “automated sales suppression device” is a software program that falsifies the electronic records of electronic cash registers and other point-of-sale systems. The bill defines “phantomware” as a programming option embedded in the operating system of an electronic cash register, or hardwired into an electronic cash register, that can be used to create a virtual second electronic cash register or eliminate or manipulate transaction records. Automated sales suppression devices and phantomware are typically used to evade the payment of taxes.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.

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:

AB250,1 Section 1. 71.78 (1) of the statutes is amended to read:

AB250,6,19 71.78 (1) Divulging information. Except as provided in subs. (1g), (4), (4m) and (10), no person may divulge or circulate or offer to obtain, divulge, or circulate any information derived from an income, franchise, withholding, fiduciary, partnership, or limited liability company tax return or tax credit claim, including information which may be furnished by the department as provided in this section. This subsection does not prohibit publication by any newspaper of information lawfully derived from such returns or claims for purposes of argument or prohibit any public speaker from referring to such information in any address. This subsection does not prohibit the department from publishing statistics classified so as not to disclose the identity of particular returns, or claims or reports and the items thereof. This subsection does not prohibit employees or agents of the department of revenue from offering or submitting any return, including joint returns of a spouse or former spouse, separate returns of a spouse, individual returns of a spouse or former spouse, and combined individual income tax returns, or from offering or submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any information derived from, any of those documents as evidence into the record of any contested matter involving the department in proceedings or litigation on state tax matters if, in the department's judgment, that evidence has reasonable probative value.

AB250,2 Section 2. 71.78 (1g) of the statutes is created to read:

AB250,7,6 71.78 (1g) Permissible disclosure by department employees. An employee of the department may, in connection with the employee's official duties, disclose information derived from a return or claim specified in sub. (1) to the extent that the disclosure is necessary for the enforcement of the tax laws of this state. The disclosure shall be limited to the information relevant to a particular matter in connection with an audit, collection, inspection, or investigation.

AB250,3 Section 3. 71.78 (4) (b) of the statutes is amended to read:

AB250,7,13 71.78 (4) (b) The attorney general and department of justice employees. A department of justice employee may, in connection with the employee's official duties, disclose information derived under this paragraph to a law enforcement investigator participating in a department of justice investigation. The disclosure shall be limited to the information relevant to a particular matter in connection with the department of justice investigation.

AB250,4 Section 4. 71.78 (4) (v) of the statutes is created to read:

AB250,7,16 71.78 (4) (v) A federal grand jury or grand jury of this state, upon receipt by the department of a grand jury subpoena.

AB250,5 Section 5. 71.78 (5) of the statutes is amended to read:

AB250,7,22 71.78 (5) Agreement with department. Copies of returns and claims specified in sub. (1) and related schedules, exhibits, writings or audit reports shall not be furnished to the persons listed under sub. (4), except persons under sub. (4) (e), (k), (n), (o) and, (q), and (v) or under an agreement between the department of revenue and another agency of government.

AB250,6 Section 6. 71.78 (6) of the statutes is amended to read:

AB250,8,4 71.78 (6) Restriction on use of information. The use of information obtained under sub. (4) or (5) is restricted to the discharge of duties imposed upon the persons by law or by the duties of their office or by order of a court as provided under sub. (4) (f) or (v).

AB250,7 Section 7. 71.83 (6) of the statutes is created to read:

AB250,8,7 71.83 (6) Automated sales suppression devices and phantomware. (a) Definitions. In this subsection:

AB250,8,10 1. “Automated sales suppression device" means a software program that falsifies the electronic records, including transaction data and transaction reports, of electronic cash registers and other point-of-sale systems.

AB250,8,14 2. “Electronic cash register" means a device that keeps a register or supporting documents by means of an electronic device or computer system designed to record transaction data for the purpose of computing, compiling, or processing retail sales transaction data or transaction reports.

AB250,8,20 3. “Phantomware" means a programming option embedded in the operating system of an electronic cash register, or hardwired into an electronic cash register, that can be used to create a virtual second electronic cash register or eliminate or manipulate transaction records that may or may not be preserved in digital formats to represent the true or manipulated record of transactions in the electronic cash register.

AB250,9,2 4. “Transaction data" includes items purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.

AB250,9,6 5. “Transaction report" means a report that includes the sales, taxes collected, media totals, and discount voids at an electronic cash register that is printed on cash register tape at the end of a day or shift or a report documenting every action at an electronic cash register that is stored electronically.

AB250,9,10 (b) Automated sales suppression devices and phantomware. Any person who creates, designs, manufactures, sells, purchases, leases, installs, updates, repairs, services, transfers, uses, or possesses in this state phantomware or an automated sales suppression device, unless for a legitimate purpose, is guilty of a Class D felony.

AB250,8 Section 8. 72.06 of the statutes is amended to read:

AB250,9,15 72.06 Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m. apply to any information obtained from any person by the department on a death tax return, report, schedule, exhibit or other document or from an audit report pertaining to the tax return.

AB250,9 Section 9. 73.03 (51b) of the statutes is created to read:

AB250,9,18 73.03 (51b) To revoke all permits, licenses, and certificates that the department has issued to a person for up to 10 years for violating s. 71.83 (6) (b).

AB250,10 Section 10. 77.61 (5) (am) of the statutes is created to read:

AB250,9,25 77.61 (5) (am) Notwithstanding par. (a), an employee of the department may, in connection with the employee's official duties, disclose information derived from a return specified in par. (a) to the extent that the disclosure is necessary for the enforcement of the tax laws of this state. The disclosure shall be limited to the information relevant to a particular matter in connection with an audit, collection, inspection, or investigation.

AB250,11 Section 11. 77.61 (5) (b) 2. of the statutes is amended to read:

AB250,10,7 77.61 (5) (b) 2. The attorney general and department of justice employees. A department of justice employee may, in connection with the employee's official duties, disclose information derived under this subdivision to a law enforcement investigator participating in a department of justice investigation. The disclosure shall be limited to the information relevant to a particular matter in connection with the department of justice investigation.

AB250,12 Section 12. 77.61 (5) (b) 15. of the statutes is created to read:

AB250,10,10 77.61 (5) (b) 15. A federal grand jury or grand jury of this state, upon receipt by the department of a grand jury subpoena.

AB250,13 Section 13. 77.61 (5) (c) of the statutes is amended to read:

AB250,10,15 77.61 (5) (c) Copies of sales tax or use tax returns, schedules, exhibits, writings or audit reports shall not be furnished to the persons listed under par. (b), except persons under par. (b) 5. or 15. or under an agreement between the department and another agency of government.

AB250,14 Section 14. 77.61 (5) (d) of the statutes is amended to read:

AB250,10,19 77.61 (5) (d) The use of information obtained under par. (b) or (c) is restricted to the discharge of duties imposed upon the persons by law or by the duties of their office or by order of a court as specified under par. (b) 6. or 15.

AB250,15 Section 15. 78.80 (3) of the statutes is amended to read:

AB250,10,25 78.80 (3) Sections 71.78 (1), (1g), and (4) to (9) 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 motor vehicle fuel, general aviation fuel or alternate fuels tax return, report, schedule, exhibit, or other document or from an audit report pertaining to the same.

AB250,16 Section 16. 125.02 (1c) of the statutes is created to read:

AB250,11,4 125.02 (1c) “Alcohol vapor device" means any device that provides for the use of air or oxygen bubbled through an alcohol beverage to produce a vapor or mist that allows the user to inhale this alcoholic vapor through the mouth or nose.

AB250,17 Section 17. 125.04 (4) of the statutes is amended to read:

AB250,11,12 125.04 (4) List of licensees. By July 15 annually, the clerk of a municipality issuing licenses shall mail to the department a list containing the name, address, and trade name of each person holding a license issued by that municipality, other than a manager's or operator's license or a license issued under s. 125.26 (6), the type of license held, and, if the person holding the license is a corporation or limited liability company, the name of the agent appointed under sub. (6). The department shall annually publish this list on the department's Internet site.

AB250,18 Section 18. 125.04 (8m) of the statutes is created to read:

AB250,11,17 125.04 (8m) Payment of criminal history fees. Any fees incurred by the department under s. 165.82 (1) (am) for purposes of verifying a permit applicant's eligibility under sub. (5) (a) 1. and (b) shall be paid by the applicant to the department upon application for the permit.

AB250,19 Section 19. 125.09 (8) of the statutes is created to read:

AB250,11,20 125.09 (8) Alcohol vapor devices. No person may use or offer for use, possess, or sell or offer for sale in this state an alcohol vapor device.

AB250,20 Section 20. 125.09 (9) of the statutes is created to read:

AB250,12,2 125.09 (9) Possession of still. (a) Subject to par. (b), no person may possess any still, leach tub, or other apparatus for manufacturing, rectifying, distilling, refining, or purifying intoxicating liquor other than wine. The possession of any such still, leach tub, or other apparatus is prima facie evidence of possession for the purpose of manufacturing, rectifying, distilling, refining, or purifying of intoxicating liquor other than wine.

AB250,12,3 (b) Paragraph (a) does not apply to any of the following:

AB250,12,4 1. A person issued a manufacturer's or rectifier's permit under s. 125.52.

AB250,12,5 2. A person that has registered a distilled spirits plant under 26 USC 5171.

AB250,12,7 3. A person that has registered the still or distilling apparatus under 26 USC 5179.

AB250,12,9 (c) Any person who violates par. (a) shall be subject to the same penalty specified in s. 125.04 (13).