Tax 9.69(2)(e)(e) “Tobacco product manufacturer” has the same meaning as in s. 995.10 (1) (i), Stats., and includes both a cigarette manufacturer under subch. II of ch. 139, Stats., and a tobacco products manufacturer under subch. III of ch. 139, Stats., that sells “roll-your-own” cigarette tobacco. Tax 9.69(2)(f)(f) “Wisconsin consumer” means a consumer within this state, including a direct consumer, distributor, retailer or intermediary similar to a distributor or a retailer. Tax 9.69(3)(a)(a) Every tobacco product manufacturer that elects to sell cigarettes to Wisconsin consumers shall, by the 15th day of each month, file a schedule with the department that reconciles the number of Wisconsin state cigarette excise tax stamps affixed to packages of cigarettes sold to Wisconsin consumers and the amount of “roll-your-own” cigarette tobacco sold to Wisconsin consumers in the previous calendar month. Tax 9.69(3)(b)(b) The schedule required under par. (a) shall contain all of the following information that is applicable: Tax 9.69(3)(b)1.1. A listing of each sale of cigarettes other than “roll-your-own” cigarette tobacco manufactured, or the name of the manufacturer of the cigarettes that were delivered to Wisconsin consumers, onto which state cigarette excise tax stamps were affixed. Tax 9.69(3)(b)2.2. A listing of each sale of “roll-your-own” cigarette tobacco manufactured, or the name of the manufacturer of the “roll-your-own” cigarette tobacco, that was delivered to Wisconsin consumers. Tax 9.69(3)(b)3.3. For each manufacturer listed pursuant to subd. 1., a listing of all brands of cigarettes sold and the number of Wisconsin state cigarette excise tax stamps affixed to cigarette packages with respect to each brand. Tax 9.69(3)(b)4.4. For each brand of cigarettes listed for each manufacturer pursuant to subd. 3., the following additional information, if known: Tax 9.69(3)(b)4.b.b. The name of the person or entity first responsible for the cigarettes being designated or identified for sale in the United States. Tax 9.69(3)(b)5.5. For each sale of “roll-your-own” cigarette tobacco listed for each manufacturer pursuant to subd. 2., the following additional information, if known: Tax 9.69(3)(b)5.a.a. The name of the manufacturer of the “roll-your-own” cigarette tobacco. Tax 9.69(3)(b)5.b.b. The name of the person or entity first responsible for the “roll-your-own” cigarette tobacco being designated or identified for sale in the United States, by brand. Tax 9.69(3)(b)6.6. Any other information the department may deem necessary to administer the provisions of this section. Tax 9.69(4)(a)(a) Every tobacco product manufacturer that is not a participating manufacturer under the master settlement agreement shall by April 15 of each year certify to the department and to the attorney general that the amounts required under s. 995.10 (2) (b), Stats., have been placed into a qualified escrow fund that is designated for Wisconsin judgments or release payments. Tax 9.69(4)(b)(b) The certification required under par. (a) shall include all of the following: Tax 9.69(4)(b)1.1. The name of the qualified financial institution where the escrow fund is maintained. Tax 9.69(4)(b)2.2. The amount of funds placed into the escrow fund since the last reporting period, based on Wisconsin sales. Tax 9.69(4)(b)3.3. The amounts, if any, paid out of the escrow fund in judgments or release payments and the purpose of the disbursements. Tax 9.69(4)(b)5.5. A copy of the escrow fund balance statement as of March 31 of each year. Tax 9.69(5)(5) Recordkeeping requirements. Every tobacco product manufacturer required to file a schedule under sub. (3) shall maintain complete and accurate records to support the information reported on the required schedule. These records shall be maintained for a period of 5 years from the date of sale into Wisconsin and shall include all of the following: Tax 9.69(5)(a)(a) Purchase records indicating the tobacco product manufacturer of the cigarettes, the date of purchase and the number of cigarettes by brand or amount of “roll-your-own” cigarette tobacco purchased, by brand. Tax 9.69(5)(b)(b) Sales records indicating to whom the sale was made, the tobacco product manufacturer of the cigarettes, the date of sale and the number of cigarettes by brand or amount of “roll-your-own” cigarette tobacco sold. Tax 9.69(5)(c)(c) The number of Wisconsin cigarette tax stamps placed on packages of cigarettes for sale in the state of Wisconsin. Tax 9.69(5)(d)(d) Any additional records deemed necessary by the secretary. Tax 9.69(6)(6) Remedies for noncompliance. The failure of a tobacco product manufacturer to either become a participating manufacturer under the terms of the master settlement agreement or place funds into a qualified escrow fund, as provided in s. 995.10 (2) (b) 1., Stats., shall be subject to civil action and penalties under s. 995.10 (2) (b) 3., Stats. Tax 9.69 HistoryHistory: Emerg. cr., eff. 8-17-00; cr. Register, December, 2000, No. 540, eff. 1-1-01; corrections in (2) (a) to (e), (4) (a) and (6) made under s. 13.93 (2m) (b) 7., Stats., Register September 2006 No. 609; CR 17-019: am. (5) (intro.), Register June 2018 No. 750 eff. 7-1-18. Tax 9.70Tax 9.70 Cigarette, tobacco, and vapor products tax bad debt deductions. Tax 9.70(1)(1) Purpose. This section clarifies when and how a person who pays cigarette taxes or a distributor who pays tobacco and vapor taxes may claim a deduction under ss. 139.362 and 139.801, Stats., for cigarette, tobacco, and vapor products tax attributable to bad debt. Tax 9.70(3)(a)(a) Deduction from measure of tax. Using Form CT-117, titled “Cigarette Distributor Bad Debt Deduction for Uncollectible Wisconsin Cigarette Tax,” or Form TT-117, titled “Tobacco and Vapor Products Distributor Bad Debt Deduction for Uncollectible Wisconsin Tobacco Products Tax,” a person who pays cigarette taxes or a distributor who pays tobacco and vapor products taxes may claim a deduction on the monthly tax report for the cigarette, tobacco, and vapor products tax attributable to bad debt that is written off as uncollectible in their books and records and that is eligible to be deducted as bad debt under s. 166 of the Internal Revenue Code. Tax 9.70(3)(b)(b) When to report the deduction. The deduction under par. (a) shall be claimed on the monthly tax report that is submitted for the month in which the amount of the deduction is written off as uncollectible and in which such amount is eligible to be deducted as a bad debt under s. 166 of the Internal Revenue Code. Tax 9.70 NoteExample: A distributor writes off a debt attributable to tobacco products tax on September 10, 2005. At the time the debt is written off it is eligible to be deducted as a bad debt under s. 166 of the Internal Revenue Code. The distributor may claim a bad debt deduction by attaching a completed form TT-117 to the monthly tobacco products tax report filed for the month of September 2005.
Tax 9.70(3)(c)(c) Recovery of bad debt. If a person who pays cigarette taxes or a distributor who pays tobacco and vapor products taxes subsequently collects in whole or in part any bad debt for which a deduction is claimed under par. (a), they shall include the amount collected in the monthly tax report filed for the month in which the amount is collected and shall pay the tax with the report. Tax 9.70(3)(d)(d) Payments and credits. Payments and credits applied to a debt before it is written off as uncollectible shall be apportioned to the amount of such debt attributable to cigarette or tobacco and vapor products tax on the basis of the ratio of the cigarette or tobacco and vapor products tax to be paid per the invoice to the total amount to be paid per the invoice. The amount so apportioned shall reduce the amount of debt attributable to cigarette or tobacco and vapor products tax to arrive at the deduction under par. (a). Tax 9.70 NoteExamples: 1) At a time when the cigarette tax rate is 12.6¢ per stick, Person A sells cigarettes to Customer B. The amount of the invoice is $20,000, consisting of cigarette tax of $5,040, cost of cigarettes of $12,000 and sundries of $2,960. Customer B defaults and discontinues operations, leaving a balance due to Person A of $2,100, which includes interest of $200 not included in the original invoice amount. The deductible tax is $478.80, computed as follows:
Tax per invoice $5,040.00
Invoice amount $ 20,000.00
Unpaid invoice amount – -1,900.00
Paid invoice amount $ 18,100.00
Portion constituting tax* x .252
Tax paid - $4,561.20
Tax that may be deducted $ 478.80
*$5,040 tax ÷ $20,000 invoice amount = .252.
Tax 9.70 Note2) At a time when the tobacco products tax rate is 71% of the manufacturer’s established list price, Distributor A sells tobacco products to Customer B. The amount of the invoice is $11,800, consisting of tobacco products tax of $3,550, cost of tobacco products of $5,000 and sundries of $3,250. Customer B defaults and discontinues operations, leaving a balance due to Distributor A of $3,000, which includes interest of $200 not included in the original invoice amount. The deductible tax is $841, computed as follows:
Tax per invoice $3,550
Invoice amount $11,800
Unpaid invoice amount – -2,800
Paid invoice amount $9,000
Portion constituting tax* x .301
Tax paid - $2,709
Tax that may be deducted $ 841
*$3,550 tax ÷ $11,800 invoice amount = .301.
Tax 9.70(3)(e)(e) Tax rate change. If the deduction under par. (a) is claimed for a month when the cigarette or tobacco products or vapor products tax rate is different from the tax rate in effect when the cigarettes, tobacco or vapor products were sold, the tax rate in effect when the cigarettes, tobacco or vapor products were sold shall be used to determine the amount of the deduction. Tax 9.70(3)(f)(f) Illegal sales. No deduction under par. (a) shall be allowed for cigarette, tobacco, and vapor products tax attributable to bad debt incurred on sales of cigarettes, tobacco, or vapor products sold in violation of state or federal law. Tax 9.70 NoteExample: Sales of banned products sold in violation of the directory of certified manufacturers and brands, s. 995.12, Stats. Tax 9.70 HistoryHistory: CR 06-107: cr. Register April 2007 No. 616, eff. 5-1-07; CR 22-044: am. (title), (1), cr. (2) (e), am. (3) (a), (c) to (f) Register June 2023 No. 810, eff. 7-1-23.
