AB68: Bill Text

AB68,1213,19 SUBCHAPTER III TOBACCO PRODUCTS TAX and vapor products taxes

AB68,2254 Section 2254 . 139.75 (1m) of the statutes is created to read:

AB68,1213,24 139.75 (1m) “Cigar” means a roll, of any size or shape, of tobacco for smoking that is made wholly or in part of tobacco, regardless of whether the tobacco is pure, flavored, adulterated, or mixed with an ingredient if the roll has a wrapper made wholly or in part of tobacco.

AB68,2255 Section 2255 . 139.75 (4t) of the statutes is created to read:

AB68,1214,2 139.75 (4t) “Little cigar” means a cigar that has an integrated cellulose acetate filter and is wrapped in a substance containing tobacco.

AB68,2256 Section 2256 . 139.75 (5b) of the statutes is created to read:

AB68,1214,15 139.75 (5b) “Manufacturer's list price" means the total price of tobacco products charged by the manufacturer or other seller to an unrelated distributor. The total price shall include all charges by the manufacturer or other seller that are necessary to complete the sale. The total price may not be reduced by any cost or expense, regardless of whether the cost or expense is separately stated on an invoice, that is incurred by the manufacturer or other seller, including fees, delivery, freight, transportation, packaging, handling, marketing, federal excise taxes, and import fees or duties. The total price may not be reduced by the value or cost of discounts or free promotional or sample products. For purposes of this subsection, a manufacturer or other seller is related to a distributor if the two parties have significant common purposes and either substantial common membership or, directly or indirectly, substantial common direction or control.

AB68,2257 Section 2257. 139.75 (12) of the statutes is amended to read:

AB68,1214,24 139.75 (12) “Tobacco products" means cigars; little cigars, cheroots; stogies; periques; granulated, plug cut, crimp cut, ready-rubbed and other smoking tobacco; snuff, including moist snuff; snuff flour; cavendish; plug and twist tobacco; fine cut and other chewing tobaccos; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco and other kinds and forms of tobacco prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking; but “tobacco products" does not include cigarettes, as defined under s. 139.30 (1m).

AB68,2258 Section 2258. 139.75 (14) of the statutes is renumbered 139.75 (14) (a) and amended to read:

AB68,1215,9 139.75 (14) (a) “Vapor product” means a noncombustible product that produces vapor or aerosol for inhalation from the application of a heating element to a liquid or other substance that is depleted as the product is used, regardless of whether the liquid or other substance contains nicotine, which may or may not contain nicotine, that employs a heating element, power source, electronic circuit, or other electronic, chemical, or mechanical means, regardless of shape or size, that can be used to produce vapor from a solution or other substance.

AB68,2259 Section 2259. 139.75 (14) (b) and (c) of the statutes are created to read:

AB68,1215,11 139.75 (14) (b) “Vapor product” includes all of the following:

AB68,1215,13 1. An electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device.

AB68,1215,17 2. Any cartridge or other container of a solution or other substance, which may or may not contain nicotine, that is intended to be used with or in an electronic cigarette, electronic cigar, electronic cigarillo, electronic pipe, or similar product or device.

AB68,1215,20 (c) “Vapor product” does not include a product regulated as a drug or device under sections 501 to 524A of the federal food, drug, and cosmetic act, 21 USC 351 to 360n-1.

AB68,2260 Section 2260. 139.76 (1) of the statutes is amended to read:

AB68,1216,16 139.76 (1) An excise tax is imposed upon the sale, offering or exposing for sale, possession with intent to sell or removal for consumption or sale or other disposition for any purpose of tobacco products by any person engaged as a distributor of them at the rate, for tobacco products, not including moist snuff and vapor products little cigars, of 71 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products and, for moist snuff, at the rate of 100 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products. The tax imposed under this subsection on cigars, except little cigars, shall not exceed an amount equal to 50 cents for each cigar. On products imported from another country, not including moist snuff and vapor products, the rate of tax is 71 percent of the amount obtained by adding the manufacturer's list price to the federal tax, duties and transportation costs to the United States. On moist snuff imported from another country, the rate of the tax is 100 percent of the amount obtained by adding the manufacturer's list price to the federal tax, duties, and transportation costs to the United States. The tax attaches at the time the tobacco products are received by the distributor in this state. The tax shall be passed on to the ultimate consumer of the tobacco products. All tobacco products received in this state for sale or distribution within this state, except tobacco products actually sold as provided in sub. (2), shall be subject to such tax.

AB68,2261 Section 2261 . 139.76 (1b) of the statutes is created to read:

AB68,1216,24 139.76 (1b) The tax under sub. (1) is imposed on little cigars at the rate of 126 mills on each little cigar, regardless of weight. To evidence payment of the tax imposed under this section on little cigars, the department shall provide stamps. A person who has paid the tax shall affix stamps of the proper denomination to each package in which little cigars are packed, prior to the first sale within this state. Section 139.32 as it applies to the tax under s. 139.31 applies to the tax imposed under this section on little cigars.

AB68,2262 Section 2262. 139.76 (1m) of the statutes is amended to read:

AB68,1217,10 139.76 (1m) An excise tax is imposed upon the sale, offering or exposing for sale, possession with intent to sell or removal for consumption or sale or other disposition for any purpose of vapor products by any person engaged as a distributor of them at the rate of 5 cents per milliliter of the liquid or other substance based on the volume as listed by the manufacturer and at a proportionate rate for any other quantity or fractional part thereof 71 percent of the manufacturer's list price. The tax attaches at the time the vapor products are received by the distributor in this state. The tax shall be passed on to the ultimate consumer of the vapor products. All vapor products received in this state for sale or distribution within this state, except those actually sold as provided in sub. (2), shall be subject to such tax.

AB68,2263 Section 2263. 139.77 (1) of the statutes is amended to read:

AB68,1217,21 139.77 (1) On or before the 15th day of each month, every distributor with a place of business in this state shall file a return showing the quantity , including milliliters in the case of a vapor product, and taxable price of each tobacco product or vapor product brought, or caused to be brought, into this state for sale; or made, manufactured or fabricated in this state for sale in this state, during the preceding month. Every distributor outside this state shall file a return showing the quantity, including milliliters in the case of a vapor product, and taxable price of each tobacco product or vapor product shipped or transported to retailers in this state to be sold by those retailers during the preceding month. At the time that the return is filed, the distributor shall pay the tax.

AB68,2264 Section 2264. 139.78 (1) of the statutes is amended to read:

AB68,1218,7 139.78 (1) A tax is imposed upon the use or storage by consumers of tobacco products in this state at the rate, for tobacco products, not including moist snuff and vapor products little cigars, of 71 percent of the cost of the tobacco products manufacturer's list price and, for moist snuff, at the rate of 100 percent of the manufacturer's established list price to distributors without diminution by volume or other discounts on domestic products. The tax imposed under this subsection on cigars, except little cigars, shall not exceed an amount equal to 50 cents for each cigar. The tax does not apply if the tax imposed by s. 139.76 (1) on the tobacco products has been paid or if the tobacco products are exempt from the tobacco products tax under s. 139.76 (2).

AB68,2265 Section 2265 . 139.78 (1b) of the statutes is created to read:

AB68,1218,13 139.78 (1b) A tax is imposed and levied upon the use or storage of little cigars in this state by any person for any purpose. The tax is levied and shall be collected at the same rate as provided for in s. 139.76 (1b). The tax under this subsection does not apply if the tax imposed by s. 139.76 (1) has been paid or if the little cigars are exempt from tax under s. 139.76 (2).

AB68,2266 Section 2266. 139.78 (1m) of the statutes is amended to read:

AB68,1218,21 139.78 (1m) A tax is imposed upon the use or storage by consumers of vapor products in this state at the rate of 5 cents per milliliter of the liquid or other substance based on the volume as listed by the manufacturer and at a proportionate rate for any other quantity or fractional part thereof 71 percent of the manufacturer's list price. The tax does not apply if the tax imposed by s. 139.76 (1m) on the vapor products has been paid or if the vapor products are exempt from the vapor products tax under s. 139.76 (2).

AB68,2267 Section 2267 . 139.83 of the statutes is renumbered 139.83 (1).

AB68,2268 Section 2268 . 139.83 (2) of the statutes is created to read:

AB68,1219,2 139.83 (2) Sections 139.315, 139.32, 139.321, 139.322, 139.34, 139.35, 139.36, 139.362, 139.363, 139.38, 139.395, 139.41, 139.42, 139.43, and 139.44 (8), as they apply to the taxes under subch. II, apply to the administration and enforcement of this subchapter for little cigars.

AB68,2269 Section 2269 . Subchapter IV of chapter 139 [precedes 139.97] of the statutes is created to read:

AB68,1219,5 chapter 139

AB68,1219,6 subchapter Iv

AB68,1219,7 marijuana tax and regulation

AB68,1219,8 139.97 Definitions. In this subchapter:

AB68,1219,9 (1) “Department" means the department of revenue.

AB68,1219,12 (2) “Lot" means a definite quantity of marijuana or usable marijuana identified by a lot number, every portion or package of which is consistent with the factors that appear in the labeling.

AB68,1219,14 (3) “Lot number" means a number that specifies the person who holds a valid permit under this subchapter and the harvesting or processing date for each lot.

AB68,1219,15 (4) “Marijuana" has the meaning given in s. 961.70 (3).

AB68,1219,19 (5) “Marijuana distributor” means a person in this state who purchases or receives usable marijuana from a marijuana processor and who sells or otherwise transfers the usable marijuana to a marijuana retailer for the purpose of resale to consumers.

AB68,1219,23 (6) “Marijuana processor" means a person in this state who processes marijuana into usable marijuana, packages and labels usable marijuana for sale in retail outlets, and sells at wholesale or otherwise transfers usable marijuana to marijuana distributors.

AB68,1219,25 (7) “Marijuana producer" means a person in this state who produces marijuana and sells it at wholesale or otherwise transfers it to marijuana processors.

AB68,1220,2 (8) “Marijuana retailer" means a person in this state that sells usable marijuana at a retail outlet.

AB68,1220,5 (9) “Microbusiness” means a marijuana producer that produces marijuana in one area that is less than 10,000 square feet and who also operates as any 2 of the following:

AB68,1220,6 (a) A marijuana processor.

AB68,1220,7 (b) A marijuana distributor.

AB68,1220,8 (c) A marijuana retailer.

AB68,1220,11 (10) “Permittee" means a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness that is issued a permit under s. 139.972.

AB68,1220,12 (11) “Retail outlet" means a location for the retail sale of usable marijuana.

AB68,1220,13 (12) “Sales price" has the meaning given in s. 77.51 (15b).

AB68,1220,16 (13) “Usable marijuana" means marijuana that has been processed for human consumption and includes dried marijuana flowers, marijuana-infused products, and marijuana edibles.

AB68,1220,21 139.971 Marijuana tax. (1) (a) An excise tax is imposed on a marijuana producer at the rate of 15 percent of the sales price on each wholesale sale or transfer in this state of marijuana to a marijuana processor. This paragraph applies to a microbusiness that transfers marijuana to a processing operation within the microbusiness.

AB68,1220,25 (b) An excise tax is imposed on a marijuana retailer at the rate of 10 percent of the sales price on each retail sale in this state of usable marijuana, except that the tax does not apply to sales of usable marijuana to an individual who holds a valid tax exemption certificate issued under s. 73.17 (4).

AB68,1221,4 (2) Each person liable for the taxes imposed under sub. (1) shall pay the taxes to the department no later than the 15th day of the month following the month in which the person's tax liability is incurred and shall include with the payment a return on a form prescribed by the department.

AB68,1221,9 (3) For purposes of this section, a marijuana producer may not sell marijuana directly to a marijuana distributor or marijuana retailer, and a marijuana retailer may purchase usable marijuana for resale only from a marijuana distributor. This subsection does not apply to a microbusiness that transfers marijuana or usable marijuana to another operation with the microbusiness.

AB68,1221,15 139.972 Permits required. (1) (a) No person may operate in this state as a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness without first filing an application for and obtaining the proper permit from the department to perform such operations. In addition, no person may operate in this state as a marijuana producer or marijuana processor without first filing an application for and obtaining the proper permit under s. 94.56.

AB68,1221,18 (b) This section applies to all officers, directors, agents, and stockholders holding 5 percent or more of the stock of any corporation applying for a permit under this section.

AB68,1221,20 (c) Subject to ss. 111.321, 111.322, and 111.335, a permit under this section may not be granted to any person to whom any of the following applies:

AB68,1221,22 1. The person has been convicted of a violent misdemeanor, as defined in s. 941.29 (1g) (b), at least 3 times.

AB68,1221,24 2. The person has been convicted of a violent felony, as defined in s. 941.29 (1g) (a), unless pardoned.

AB68,1222,2 3. During the preceding 3 years, the person has been committed under s. 51.20 for being drug dependent.

AB68,1222,7 4. The person chronically and habitually uses alcohol beverages or other substances to the extent that his or her normal faculties are impaired. A person is presumed to chronically and habitually use alcohol beverages or other substances to the extent that his or her normal faculties are impaired if, within the preceding 3 years, any of the following applies:

AB68,1222,9 a. The person has been committed for involuntary treatment under s. 51.45 (13).

AB68,1222,10 b. The person has been convicted of a violation of s. 941.20 (1) (b).

AB68,1222,20 c. In 2 or more cases arising out of separate incidents, a court has found the person to have committed a violation of s. 346.63 or a local ordinance in conformity with that section; a violation of a law of a federally recognized American Indian tribe or band in this state in conformity with s. 346.63; or a violation of the law of another jurisdiction, as defined in s. 340.01 (41m), that prohibits use of a motor vehicle while intoxicated, while under the influence of a controlled substance, a controlled substance analog, or a combination thereof, with an excess or specified range of alcohol concentration, or while under the influence of any drug to a degree that renders the person incapable of safely driving, as those or substantially similar terms are used in that jurisdiction's laws.

AB68,1222,22 5. The person has income that comes principally from gambling or has been convicted of 2 or more gambling offenses.

AB68,1222,23 6. The person has been convicted of crimes relating to prostitution.

AB68,1222,25 7. The person has been convicted of of crimes relating to loaning money or anything of value to persons holding licenses or permits pursuant to ch. 125.

AB68,1223,1 8. The person is under the age of 21.

AB68,1223,3 9. The person has not been a resident of this state continuously for at least 90 days prior to the application date.

AB68,1223,11 (cm) An applicant with 20 or more employees may not receive a permit under this section to operate as a marijuana distributor or marijuana retailer unless the applicant certifies to the department that the applicant has entered into a labor peace agreement, as defined in s. 94.56 (1) (a), and will abide by the terms of the agreement as a condition of maintaining a valid permit under this section. The applicant shall submit to the department a copy of the page of the labor peace agreement that contains the signatures of the union representative and the applicant.

AB68,1223,23 (cn) The department shall use a competitive scoring system to determine which applicants are eligible to receive a permit under this section. The department shall issue permits to the highest scoring applicants that it determines will best protect the environment; provide stable, family-supporting jobs to local residents; ensure worker and consumer safety; operate secure facilities; and uphold the laws of the jurisdictions in which they operate. The department shall, using criteria established by rule, score an applicant for a permit to operate as a marijuana retailer on the applicant's ability to articulate a social equity plan related to the operation of a marijuana retail establishment. The department may deny a permit to an applicant with a low score as determined under this paragraph. The department may request that the applicant provide any information or documentation that the department deems necessary for purposes of making a determination under this paragraph.

AB68,1224,6 (d) 1. Before the department issues a new or renewed permit under this section, the department shall give notice of the permit application to the governing body of the municipality where the permit applicant intends to operate the premises of a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness. No later than 30 days after the department submits the notice, the governing body of the municipality may file with the department a written objection to granting or renewing the permit. At the municipality's request, the department may extend the period for filing objections.

AB68,1224,20 2. A written objection filed under subd. 1. shall provide all the facts on which the objection is based. In determining whether to grant or deny a permit for which an objection has been filed under this paragraph, the department shall give substantial weight to objections from a municipality based on chronic illegal activity associated with the premises for which the applicant seeks a permit or the premises of any other operation in this state for which the applicant holds or has held a valid permit or license, the conduct of the applicant's patrons inside or outside the premises of any other operation in this state for which the applicant holds or has held a valid permit or license, and local zoning ordinances. In this subdivision, “ chronic illegal activity" means a pervasive pattern of activity that threatens the public health, safety, and welfare of the municipality, including any crime or ordinance violation, and that is documented in crime statistics, police reports, emergency medical response data, calls for service, field data, or similar law enforcement agency records.

AB68,1224,25 (e) After denying a permit, the department shall immediately notify the applicant in writing of the denial and the reasons for the denial. After making a decision to grant or deny a permit for which a municipality has filed an objection under par. (d), the department shall immediately notify the governing body of the municipality in writing of its decision and the reasons for the decision.

AB68,1225,2 (f) 1. The department's denial of a permit under this section is subject to judicial review under ch. 227.

AB68,1225,4 2. The department's decision to grant a permit under this section regardless of an objection filed under par. (d) is subject to judicial review under ch. 227.

AB68,1225,6 (g) The department shall not issue a permit under this section to any person who does not hold a valid certificate under s. 73.03 (50).

AB68,1225,13 (2) Each person who applies for a permit under this section shall submit with the application a $250 fee. Each person who is granted a permit under this section shall annually pay to the department a $2,000 fee for as long as the person holds a valid permit under this section. A permit issued under this section is valid for one year and may be renewed, except that the department may revoke or suspend a permit prior to its expiration. A person is not entitled to a refund of the fees paid under this subsection if the person's permit is denied, revoked, or suspended.

AB68,1225,17 (3) The department may not issue a permit under this section to operate any premises which are within 500 feet of the perimeter of the grounds of any elementary or secondary school, playground, recreation facility, child care facility, public park, public transit facility, or library.

AB68,1226,6 (4) Under this section, a separate permit is required for and issued to each class of permittee, and the permit holder may perform only the operations authorized by the permit. A permit issued under this section is not transferable from one person to another or from one premises to another. A separate permit is required for each place in this state where the operations of a marijuana producer, marijuana processor, marijuana distributor, marijuana retailer, or microbusiness occur, including each retail outlet. No person who has been issued a permit to operate as a marijuana retailer, or who has any direct or indirect financial interest in the operation of a marijuana retailer, shall be issued a permit to operate as a marijuana producer, marijuana processor, or marijuana distributor. A person who has been issued a permit to operate as a microbusiness is not required to hold separate permits to operate as a marijuana processor, marijuana distributor, or marijuana retailer, but shall specify on the person's application for a microbusiness permit the activities that the person will be engaged in as a microbusiness.

AB68,1226,8 (5) Each person issued a permit under this section shall post the permit in a conspicuous place on the premises to which the permit relates.