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:
SB285,1 1Section 1. 71.78 (1) of the statutes is amended to read:
SB285,6,192 71.78 (1) Divulging information. Except as provided in subs. (1g), (4), (4m) and
3(10), no person may divulge or circulate or offer to obtain, divulge, or circulate any
4information derived from an income, franchise, withholding, fiduciary, partnership,
5or limited liability company tax return or tax credit claim, including information
6which may be furnished by the department as provided in this section. This
7subsection does not prohibit publication by any newspaper of information lawfully
8derived from such returns or claims for purposes of argument or prohibit any public
9speaker from referring to such information in any address. This subsection does not
10prohibit the department from publishing statistics classified so as not to disclose the
11identity of particular returns, or claims or reports and the items thereof. This
12subsection does not prohibit employees or agents of the department of revenue from
13offering or submitting any return, including joint returns of a spouse or former
14spouse, separate returns of a spouse, individual returns of a spouse or former spouse,
15and combined individual income tax returns, or from offering or submitting any
16claim, schedule, exhibit, writing, or audit report or a copy of, and any information
17derived from, any of those documents as evidence into the record of any contested
18matter involving the department in proceedings or litigation on state tax matters if,
19in the department's judgment, that evidence has reasonable probative value.
SB285,2 20Section 2. 71.78 (1g) of the statutes is created to read:
SB285,7,6
171.78 (1g) Permissible disclosure by department employees. An employee of
2the department may, in connection with the employee's official duties, disclose
3information derived from a return or claim specified in sub. (1) to the extent that the
4disclosure is necessary for the enforcement of the tax laws of this state. The
5disclosure shall be limited to the information relevant to a particular matter in
6connection with an audit, collection, inspection, or investigation.
SB285,3 7Section 3. 71.78 (4) (b) of the statutes is amended to read:
SB285,7,138 71.78 (4) (b) The attorney general and department of justice employees. A
9department of justice employee may, in connection with the employee's official
10duties, disclose information derived under this paragraph to a law enforcement
11investigator participating in a department of justice investigation. The disclosure
12shall be limited to the information relevant to a particular matter in connection with
13the department of justice investigation.
SB285,4 14Section 4. 71.78 (4) (v) of the statutes is created to read:
SB285,7,1615 71.78 (4) (v) A federal grand jury or grand jury of this state, upon receipt by
16the department of a grand jury subpoena.
SB285,5 17Section 5. 71.78 (5) of the statutes is amended to read:
SB285,7,2218 71.78 (5) Agreement with department. Copies of returns and claims specified
19in sub. (1) and related schedules, exhibits, writings or audit reports shall not be
20furnished to the persons listed under sub. (4), except persons under sub. (4) (e), (k),
21(n), (o) and, (q), and (v) or under an agreement between the department of revenue
22and another agency of government.
SB285,6 23Section 6. 71.78 (6) of the statutes is amended to read:
SB285,8,4
171.78 (6) Restriction on use of information. The use of information obtained
2under sub. (4) or (5) is restricted to the discharge of duties imposed upon the persons
3by law or by the duties of their office or by order of a court as provided under sub. (4)
4(f) or (v).
SB285,7 5Section 7. 71.83 (6) of the statutes is created to read:
SB285,8,76 71.83 (6) Automated sales suppression devices and phantomware. (a)
7Definitions. In this subsection:
SB285,8,108 1. “Automated sales suppression device" means a software program that
9falsifies the electronic records, including transaction data and transaction reports,
10of electronic cash registers and other point-of-sale systems.
SB285,8,1411 2. “Electronic cash register" means a device that keeps a register or supporting
12documents by means of an electronic device or computer system designed to record
13transaction data for the purpose of computing, compiling, or processing retail sales
14transaction data or transaction reports.
SB285,8,2015 3. “Phantomware" means a programming option embedded in the operating
16system of an electronic cash register, or hardwired into an electronic cash register,
17that can be used to create a virtual second electronic cash register or eliminate or
18manipulate transaction records that may or may not be preserved in digital formats
19to represent the true or manipulated record of transactions in the electronic cash
20register.
SB285,9,221 4. “Transaction data" includes items purchased by a customer, the price for
22each item, a taxability determination for each item, a segregated tax amount for each
23of the taxed items, the amount of cash or credit tendered, the net amount returned
24to the customer in change, the date and time of the purchase, the name, address, and

1identification number of the vendor, and the receipt or invoice number of the
2transaction.
SB285,9,63 5. “Transaction report" means a report that includes the sales, taxes collected,
4media totals, and discount voids at an electronic cash register that is printed on cash
5register tape at the end of a day or shift or a report documenting every action at an
6electronic cash register that is stored electronically.
SB285,9,107 (b) Automated sales suppression devices and phantomware. Any person who
8creates, designs, manufactures, sells, purchases, leases, installs, updates, repairs,
9services, transfers, uses, or possesses in this state phantomware or an automated
10sales suppression device, unless for a legitimate purpose, is guilty of a Class D felony.
SB285,8 11Section 8. 72.06 of the statutes is amended to read:
SB285,9,15 1272.06 Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m.
13apply to any information obtained from any person by the department on a death tax
14return, report, schedule, exhibit or other document or from an audit report
15pertaining to the tax return.
SB285,9 16Section 9. 73.03 (51b) of the statutes is created to read:
SB285,9,1817 73.03 (51b) To revoke all permits, licenses, and certificates that the
18department has issued to a person for up to 10 years for violating s. 71.83 (6) (b).
SB285,10 19Section 10. 77.61 (5) (am) of the statutes is created to read:
SB285,9,2520 77.61 (5) (am) Notwithstanding par. (a), an employee of the department may,
21in connection with the employee's official duties, disclose information derived from
22a return specified in par. (a) to the extent that the disclosure is necessary for the
23enforcement of the tax laws of this state. The disclosure shall be limited to the
24information relevant to a particular matter in connection with an audit, collection,
25inspection, or investigation.
SB285,11
1Section 11. 77.61 (5) (b) 2. of the statutes is amended to read:
SB285,10,72 77.61 (5) (b) 2. The attorney general and department of justice employees. A
3department of justice employee may, in connection with the employee's official
4duties, disclose information derived under this subdivision to a law enforcement
5investigator participating in a department of justice investigation. The disclosure
6shall be limited to the information relevant to a particular matter in connection with
7the department of justice investigation.
SB285,12 8Section 12. 77.61 (5) (b) 15. of the statutes is created to read:
SB285,10,109 77.61 (5) (b) 15. A federal grand jury or grand jury of this state, upon receipt
10by the department of a grand jury subpoena.
SB285,13 11Section 13. 77.61 (5) (c) of the statutes is amended to read:
SB285,10,1512 77.61 (5) (c) Copies of sales tax or use tax returns, schedules, exhibits, writings
13or audit reports shall not be furnished to the persons listed under par. (b), except
14persons under par. (b) 5. or 15. or under an agreement between the department and
15another agency of government.
SB285,14 16Section 14. 77.61 (5) (d) of the statutes is amended to read:
SB285,10,1917 77.61 (5) (d) The use of information obtained under par. (b) or (c) is restricted
18to the discharge of duties imposed upon the persons by law or by the duties of their
19office or by order of a court as specified under par. (b) 6. or 15.
SB285,15 20Section 15. 78.80 (3) of the statutes is amended to read:
SB285,10,2521 78.80 (3) Sections 71.78 (1), (1g), and (4) to (9) and 71.83 (2) (a) 3., relating to
22confidentiality of income and franchise tax returns, apply to any information
23obtained from any person on a motor vehicle fuel, general aviation fuel or alternate
24fuels tax return, report, schedule, exhibit, or other document or from an audit report
25pertaining to the same.
SB285,16
1Section 16. 125.02 (1c) of the statutes is created to read:
SB285,11,42 125.02 (1c) “Alcohol vapor device" means any device that provides for the use
3of air or oxygen bubbled through an alcohol beverage to produce a vapor or mist that
4allows the user to inhale this alcoholic vapor through the mouth or nose.
SB285,17 5Section 17. 125.04 (4) of the statutes is amended to read:
SB285,11,126 125.04 (4) List of licensees. By July 15 annually, the clerk of a municipality
7issuing licenses shall mail to the department a list containing the name, address, and
8trade name of each person holding a license issued by that municipality, other than
9a manager's or operator's license or a license issued under s. 125.26 (6), the type of
10license held, and, if the person holding the license is a corporation or limited liability
11company, the name of the agent appointed under sub. (6). The department shall
12annually publish this list on the department's Internet site.
SB285,18 13Section 18. 125.04 (8m) of the statutes is created to read:
SB285,11,1714 125.04 (8m) Payment of criminal history fees. Any fees incurred by the
15department under s. 165.82 (1) (am) for purposes of verifying a permit applicant's
16eligibility under sub. (5) (a) 1. and (b) shall be paid by the applicant to the department
17upon application for the permit.
SB285,19 18Section 19. 125.09 (8) of the statutes is created to read:
SB285,11,2019 125.09 (8) Alcohol vapor devices. No person may use or offer for use, possess,
20or sell or offer for sale in this state an alcohol vapor device.
SB285,20 21Section 20. 125.09 (9) of the statutes is created to read:
SB285,12,222 125.09 (9) Possession of still. (a) Subject to par. (b), no person may possess
23any still, leach tub, or other apparatus for manufacturing, rectifying, distilling,
24refining, or purifying intoxicating liquor other than wine. The possession of any such
25still, leach tub, or other apparatus is prima facie evidence of possession for the

1purpose of manufacturing, rectifying, distilling, refining, or purifying of intoxicating
2liquor other than wine.
SB285,12,33 (b) Paragraph (a) does not apply to any of the following:
SB285,12,44 1. A person issued a manufacturer's or rectifier's permit under s. 125.52.
SB285,12,552. A person that has registered a distilled spirits plant under 26 USC 5171.
SB285,12,763. A person that has registered the still or distilling apparatus under 26 USC
75179
.
SB285,12,98 (c) Any person who violates par. (a) shall be subject to the same penalty
9specified in s. 125.04 (13).
SB285,21 10Section 21. 125.112 of the statutes is created to read:
SB285,12,13 11125.112 Administrative forfeitures for violations. (1) (a) The department
12may directly assess against a person, for the person's violation as described in sub.
13(6), a forfeiture in the amount specified in sub. (6).
SB285,12,1914 (b) The authority of the department to assess a forfeiture against a person
15under this section is in addition to the department's authority under s. 125.12 and
16any other authority or power of the department under this chapter or ch. 139 and in
17addition to any other penalty under this chapter, except that a person may not be
18both assessed a forfeiture under this section and subject to a court-imposed fine,
19forfeiture, or imprisonment under this chapter arising from the same violation.
SB285,12,25 20(2) If the department determines that a forfeiture should be assessed for a
21violation identified in sub. (6), the department shall issue a notice of assessment to
22the person alleged to have committed the violation. The notice shall specify the
23amount of the forfeiture assessed and the alleged violation, including the statute
24alleged to have been violated, and shall inform the person of the right to hearing
25under sub. (3) (a).
SB285,13,13
1(3) (a) A person upon whom a forfeiture is imposed may contest the assessment
2by sending, within 30 days after receipt of notice of the assessment, a written request
3for hearing under s. 227.44 to the division of hearings and appeals in the department
4of administration. The administrator of the division of hearings and appeals may
5designate a hearing examiner to preside over the case and recommend a decision to
6the administrator under s. 227.46. The decision of the administrator of the division
7of hearings and appeals shall be the final administrative decision. The division of
8hearings and appeals shall commence the hearing within 30 days of receipt of the
9request for hearing and shall issue a final decision within 15 days after the close of
10the hearing. Proceedings before the division of hearings and appeals are governed
11by ch. 227. In any petition for judicial review of a decision by the division of hearings
12and appeals, the party, other than the petitioner, who was in the proceeding before
13the division of hearings and appeals shall be the named respondent.
SB285,13,1914 (b) In addition to or in lieu of requesting a hearing under par. (a), a person
15issued a notice of assessment under sub. (2) may settle the matter by agreeing to an
16offer in compromise with the department under which the person pays to the
17department a forfeiture of less than the amount stated in the notice of assessment
18but not less than the minimum applicable forfeiture amount specified in sub. (6) for
19the violation.
SB285,13,25 20(4) All forfeitures shall be paid to the department within 60 days after receipt
21of the notice of assessment or according to a schedule agreed to by the department
22and the person issued the notice of assessment or, if the forfeiture is contested under
23sub. (3), within 10 days after receipt of the final decision after exhaustion of all
24administrative and judicial reviews. The department shall remit all forfeitures paid
25to the secretary of administration for deposit in the school fund.
SB285,14,4
1(5) The attorney general may bring an action in the name of the state to collect
2any forfeiture imposed under this section if the forfeiture has not been paid following
3the exhaustion of all administrative and judicial reviews. The only issue to be
4contested in any such action is whether the forfeiture amount has been paid.
SB285,14,6 5(6) (a) The department may assess forfeitures under this section for the
6following violations in the following amounts:
SB285,14,107 1. For a violation of s. 125.07 (2) (a) or (3) (a) or (b) or 125.65 or a rule
8promulgated under s. 125.03 (1) (a) or (2), not more than $100 for a first violation,
9not less than $100 nor more than $250 for a 2nd violation, and not less than $250 nor
10more than $500 for a 3rd or subsequent violation.
SB285,14,1711 2. For a violation of s. 125.04 (3) (j) or (10), 125.06 (13) (a), 125.09 (3), (6), (7),
12or (8), 125.27 (2) (e), 125.272, 125.28 (1) (d), 125.32 (3), (5), (6), or (7), 125.33 (1), (5),
13(6), (7) (a), (7m), (8), (11) (a), (12), or (13), 125.34 (2), (3), (4), (5), or (6), 125.51 (4) (am),
14(5) (c) 4., (6), or (7), 125.535 (4), (5), or (6), 125.54 (3), (5), or (8), 125.68 (4), (10) (a),
15or (11) (b), or 125.69 (3), (4) (a), or (5), not more than $250 for a first violation, not less
16than $250 nor more than $500 for a 2nd violation, and not less than $500 nor more
17than $1,000 for a 3rd or subsequent violation.
SB285,14,2218 3. For a violation of s. 125.04 (1), 125.09 (1) or (9), 125.105 (1), 125.28 (5),
19125.315 (1), 125.32 (2), 125.33 (9), 125.54 (7) (a) or (b), 125.545 (4) or (7), 125.66 (1),
20125.67, or 125.68 (2), not more than $1,000 for a first violation, not less than $1,000
21nor more than $2,500 for a 2nd violation, and not less than $2,500 nor more than
22$10,000 for a 3rd or subsequent violation.
SB285,14,2423 4. For a violation of s. 125.07 (1) (a), an amount consistent with the forfeitures
24or fines provided under s. 125.07 (1) (b).
SB285,15,2
15. For a violation of s. 125.07 (4) (a), an amount consistent with the forfeitures
2provided under s. 125.07 (4) (bs).
SB285,15,43 6. For a violation of s. 125.07 (4) (b), an amount consistent with the forfeitures
4provided under s. 125.07 (4) (c).
SB285,15,65 7. For a violation of s. 125.085 (3) (a) 1., an amount consistent with the fines
6provided under s. 125.085 (3) (a).
SB285,15,87 8. For a violation of s. 125.085 (3) (b), an amount consistent with the forfeitures
8provided under s. 125.085 (3) (bd).
SB285,15,109 9. For a violation of s. 125.09 (2), an amount consistent with the forfeitures
10provided under s. 125.09 (2) (d).
SB285,15,1211 10. For a violation of s. 125.66 (4), an amount consistent with the fines provided
12under s. 125.66 (4).
SB285,15,1413 11. For a violation of s. 125.68 (8), an amount consistent with the fines provided
14under s. 125.68 (8) (a).
SB285,15,1615 12. For a violation of s. 125.68 (9), an amount consistent with the fines provided
16under s. 125.68 (9) (g).
SB285,15,1817 13. For a violation of s. 125.68 (10) (b), an amount consistent with the forfeiture
18provided under s. 125.68 (10) (b).
SB285,15,2019 14. For a violation of s. 125.69 (6), an amount consistent with the forfeitures
20or fines provided under s. 125.69 (6).
SB285,15,2321 (b) For purposes of par. (a), a violation is considered to be a separate violation
22if the act or omission giving rise to it did not arise out of the same incident or
23occurrence.
SB285,22 24Section 22. 125.12 (7) of the statutes is created to read:
SB285,16,5
1125.12 (7) Reapplication for permit after revocation or refusal to issue or
2renew.
If the department refuses to issue, refuses to renew, or revokes any permit
3issued under this chapter, the applicant or permit holder may not reapply for the
4permit for a period of 12 months after the date of the refusal to issue, refusal to renew,
5or revocation.
SB285,23 6Section 23. 134.65 (1g) of the statutes is created to read:
SB285,16,97 134.65 (1g) (a) The department of revenue shall create an application form for
8licenses issued under sub. (1). The form shall require all of the following information
9from an applicant:
SB285,16,1110 1. The applicant's history relevant to the applicant's fitness to hold a license
11under sub. (1).
SB285,16,1212 2. The kind of license for which the applicant is applying.
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