5. 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 revokes an alcohol beverages permit, the permit
holder may not reapply to DOR for the permit for a period of six months.
Notice of change filed by alcohol beverage licensee or permittee
Under current law, within ten days of any change in a fact set out in an
application for a license or permit to sell alcohol beverages, the licensee or permittee
must file with the issuing municipality or DOR, as applicable, a written description
of the changed fact. This bill extends the deadline for this filing from ten days to 30
days.

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 or accesses from 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.
For further information see the state 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:
SB268,1 1Section 1. 40.02 (48) (am) 19. of the statutes is amended to read:
SB268,6,32 40.02 (48) (am) 19. An excise tax investigator A special agent employed by the
3department of revenue who is authorized to act under s. 73.031.
SB268,2 4Section 2. 40.02 (48) (c) of the statutes is amended to read:
SB268,7,55 40.02 (48) (c) In s. 40.65, “protective occupation participant" means a
6participating employee who is a police officer, fire fighter, an individual determined
7by a participating employer under par. (a) or (bm) to be a protective occupation
8participant, county undersheriff, deputy sheriff, state probation and parole officer,
9county traffic police officer, conservation warden, state forest ranger, field
10conservation employee of the department of natural resources who is subject to call
11for forest fire control or warden duty, member of the state traffic patrol, state motor
12vehicle inspector, University of Wisconsin System full-time police officer, guard or

1any other employee whose principal duties are supervision and discipline of inmates
2at a state penal institution, excise tax investigator special agent employed by the
3department of revenue who is authorized to act under s. 73.031, person employed
4under s. 60.553 (1), 61.66 (1), or 62.13 (2e) (a), or special criminal investigation agent
5employed by the department of justice.
SB268,3 6Section 3. 71.78 (1) of the statutes is amended to read:
SB268,7,257 71.78 (1) Divulging information. Except as provided in subs. (1g), (4), (4m),
8(10), and (11), no person may divulge or circulate or offer to obtain, divulge, or
9circulate any information derived from an income, franchise, withholding, fiduciary,
10partnership, or limited liability company tax return or tax credit claim, including
11information which may be furnished by the department as provided in this section.
12This subsection does not prohibit publication by any newspaper of information
13lawfully derived from such returns or claims for purposes of argument or prohibit
14any public speaker from referring to such information in any address. This
15subsection does not prohibit the department from publishing statistics classified so
16as not to disclose the identity of particular returns, or claims or reports and the items
17thereof. This subsection does not prohibit employees or agents of the department of
18revenue from offering or submitting any return, including joint returns of a spouse
19or former spouse, separate returns of a spouse, individual returns of a spouse or
20former spouse, and combined individual income tax returns, or from offering or
21submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any
22information derived from, any of those documents as evidence into the record of any
23contested matter involving the department in proceedings or litigation on state tax
24matters if, in the department's judgment, that evidence has reasonable probative
25value.
SB268,4
1Section 4. 71.78 (1g) of the statutes is created to read:
SB268,8,82 71.78 (1g) Permissible disclosure by department employees. An employee of
3the department may, in connection with the employee's official duties, disclose
4information derived from a return or claim specified in sub. (1) to the extent that the
5disclosure is necessary to obtain information for the enforcement of the tax laws of
6this state. The information that may be disclosed under this subsection shall be
7strictly limited to, and used solely for the purposes of, obtaining information
8necessary for an audit, collection, inspection, or investigation by the employee.
SB268,5 9Section 5. 71.78 (4) (b) of the statutes is amended to read:
SB268,8,1610 71.78 (4) (b) The attorney general and department of justice employees. A
11department of justice employee may, in connection with the employee's official
12duties, disclose information, other than copies of information, examined under this
13paragraph to a law enforcement investigator participating in a department of justice
14investigation of suspected criminal conduct. The information that may be disclosed
15under this paragraph shall be strictly limited to, and used solely for the purposes of,
16obtaining information necessary for a department of justice investigation.
SB268,6 17Section 6. 71.78 (4) (v) of the statutes is created to read:
SB268,8,1918 71.78 (4) (v) A federal grand jury or grand jury of this state, upon receipt by
19the department of a grand jury subpoena.
SB268,7 20Section 7. 71.78 (5) of the statutes is amended to read:
SB268,9,221 71.78 (5) Agreement with department. Copies of returns and claims specified
22in sub. (1) and related schedules, exhibits, writings or audit reports shall not be
23furnished to the persons listed under sub. (4), except persons under sub. (4) (e), (k),

1(n), (o) and, (q), and (v) or under an agreement between the department of revenue
2and another agency of government.
SB268,8 3Section 8. 71.78 (6) of the statutes is amended to read:
SB268,9,74 71.78 (6) Restriction on use of information. The use of information obtained
5under sub. (4) or (5) is restricted to the discharge of duties imposed upon the persons
6by law or by the duties of their office or by order of a court as provided under sub. (4)
7(f) or (v).
SB268,9 8Section 9. 71.83 (6) of the statutes is created to read:
SB268,9,109 71.83 (6) Automated sales suppression devices and phantomware. (a)
10Definitions. In this subsection:
SB268,9,1411 1. “Automated sales suppression device" means a software program, including
12programs accessed through the Internet or by any other means, that falsifies the
13electronic records, including transaction data and transaction reports, of electronic
14cash registers and other point-of-sale systems.
SB268,9,1815 2. “Electronic cash register" means a device that keeps a register or supporting
16documents by means of an electronic device or computer system designed to record
17transaction data for the purpose of computing, compiling, or processing retail sales
18transaction data or transaction reports.
SB268,9,2419 3. “Phantomware" means a programming option embedded in the operating
20system of an electronic cash register, or hardwired into an electronic cash register,
21that can be used to create a virtual second electronic cash register or eliminate or
22manipulate transaction records that may or may not be preserved in digital formats
23to represent the true or manipulated record of transactions in the electronic cash
24register.
SB268,10,6
14. “Transaction data" includes items purchased by a customer, the price for
2each item, a taxability determination for each item, a segregated tax amount for each
3of the taxed items, the amount of cash or credit tendered, the net amount returned
4to the customer in change, the date and time of the purchase, the name, address, and
5identification number of the vendor, and the receipt or invoice number of the
6transaction.
SB268,10,107 5. “Transaction report" means a report that includes the sales, taxes collected,
8media totals, and discount voids at an electronic cash register that is printed on cash
9register tape at the end of a day or shift or a report documenting every action at an
10electronic cash register that is stored electronically.
SB268,10,1511 (b) Automated sales suppression devices and phantomware. Any person who
12creates, designs, manufactures, sells, purchases, leases, installs, updates, repairs,
13services, transfers, uses, or possesses in this state or accesses from this state
14phantomware or an automated sales suppression device, unless for a legitimate
15purpose, is guilty of a Class D felony.
SB268,10 16Section 10. 72.06 of the statutes is amended to read:
SB268,10,20 1772.06 Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m.
18apply to any information obtained from any person by the department on a death tax
19return, report, schedule, exhibit or other document or from an audit report
20pertaining to the tax return.
SB268,11 21Section 11. 73.03 (51b) of the statutes is created to read:
SB268,10,2322 73.03 (51b) To revoke all permits, licenses, and certificates that the
23department has issued to a person for up to 10 years for violating s. 71.83 (6) (b).
SB268,12 24Section 12. 73.031 of the statutes is amended to read:
SB268,11,16
173.031 Arrest powers; authority. A special agent of the department of
2revenue who has been certified as a law enforcement officer by the law enforcement
3standards board and who is on duty may arrest a person if the special agent believes,
4on reasonable grounds, that a warrant for the person's arrest has been issued in this
5state, that a felony warrant has been issued in another state, that the person is
6violating or has violated
under the conditions set forth in s. 968.07. Pursuant to s.
7175.38, special agents may investigate violations of
s. 945.03 (2m) or, 945.04 (2m),
8or that the person is violating or has violated s. 945.05 (1m) in a case in which the
9department determines that the video gambling machine involved is likely to be used
10in connection with a violation of s. 945.03 (2m) or 945.04 (2m) or if a crime has been
11committed in the presence of the special agent. The special agent shall cause the
12person arrested and the documents and reports pertaining to the arrest to be
13delivered to the chief of police or sheriff in the jurisdiction where the arrest is made.
14The special agent shall be available as a witness for the state
. A special agent acting
15under this section is an employee of the department and is subject to its direction,
16benefits and legal protection.
SB268,13 17Section 13. 77.61 (5) (am) of the statutes is created to read:
SB268,11,2318 77.61 (5) (am) Notwithstanding par. (a), an employee of the department may,
19in connection with the employee's official duties, disclose information derived from
20a return specified in par. (a) to the extent that the disclosure is necessary for the
21enforcement of the tax laws of this state. The disclosure shall be limited to the
22information relevant to a particular matter in connection with an audit, collection,
23inspection, or investigation.
SB268,14 24Section 14. 77.61 (5) (b) 2. of the statutes is amended to read:
SB268,12,6
177.61 (5) (b) 2. The attorney general and department of justice employees. A
2department of justice employee may, in connection with the employee's official
3duties, disclose information derived under this subdivision to a law enforcement
4investigator participating in a department of justice investigation. The disclosure
5shall be limited to the information relevant to a particular matter in connection with
6the department of justice investigation.
SB268,15 7Section 15. 77.61 (5) (b) 15. of the statutes is created to read:
SB268,12,98 77.61 (5) (b) 15. A federal grand jury or grand jury of this state, upon receipt
9by the department of a grand jury subpoena.
SB268,16 10Section 16. 77.61 (5) (c) of the statutes is amended to read:
SB268,12,1411 77.61 (5) (c) Copies of sales tax or use tax returns, schedules, exhibits, writings
12or audit reports shall not be furnished to the persons listed under par. (b), except
13persons under par. (b) 5. or 15. or under an agreement between the department and
14another agency of government.
SB268,17 15Section 17. 77.61 (5) (d) of the statutes is amended to read:
SB268,12,1816 77.61 (5) (d) The use of information obtained under par. (b) or (c) is restricted
17to the discharge of duties imposed upon the persons by law or by the duties of their
18office or by order of a court as specified under par. (b) 6. or 15.
SB268,18 19Section 18. 78.80 (3) of the statutes is amended to read:
SB268,12,2420 78.80 (3) Sections 71.78 (1), (1g), and (4) to (9) and 71.83 (2) (a) 3., relating to
21confidentiality of income and franchise tax returns, apply to any information
22obtained from any person on a motor vehicle fuel, general aviation fuel or alternate
23fuels tax return, report, schedule, exhibit, or other document or from an audit report
24pertaining to the same.
SB268,19 25Section 19. 125.02 (1c) of the statutes is created to read:
SB268,13,3
1125.02 (1c) “Alcohol vapor device" means any device that provides for the use
2of air or oxygen bubbled through an alcohol beverage to produce a vapor or mist that
3allows the user to inhale this alcoholic vapor through the mouth or nose.
SB268,20 4Section 20. 125.02 (6) of the statutes is renumbered 125.02 (6) (intro.) and
5amended to read:
SB268,13,66 125.02 (6) (intro.) “Fermented malt beverages" means any of the following:
SB268,13,9 7(a) Any beverage made by the alcohol fermentation of an infusion in potable
8water of barley malt and hops, with or without unmalted grains or decorticated and
9degerminated grains or sugar containing 0.5 percent or more of alcohol by volume.
SB268,21 10Section 21. 125.02 (6) (b) of the statutes is created to read:
SB268,13,1211 125.02 (6) (b) Any beverage recognized by the federal department of the
12treasury as beer under 27 CFR 25.11, except sake or similar products.
SB268,22 13Section 22. 125.04 (3) (h) of the statutes is amended to read:
SB268,13,1714 125.04 (3) (h) Subsequent changes. Within 10 30 days of any change in any fact
15set out in an application for a license or permit to sell alcohol beverages, the licensee
16or permittee shall file with the issuing authority a written description of the changed
17fact.
SB268,23 18Section 23. 125.04 (4) of the statutes is amended to read:
SB268,13,2519 125.04 (4) List of licensees. By July 15 annually, the clerk of a municipality
20issuing licenses shall mail to the department a list containing the name, address, and
21trade name of each person holding a license issued by that municipality, other than
22a manager's or operator's license or a license issued under s. 125.26 (6), the type of
23license held, and, if the person holding the license is a corporation or limited liability
24company, the name of the agent appointed under sub. (6). The department shall
25annually publish this list on the department's website.
SB268,24
1Section 24. 125.04 (8m) of the statutes is created to read:
SB268,14,52 125.04 (8m) Payment of criminal history fees. Any fees incurred by the
3department under s. 165.82 (1) (am) for purposes of verifying a permit applicant's
4eligibility under sub. (5) (a) 1. and (b) shall be paid by the applicant to the department
5upon application for the permit.
SB268,25 6Section 25. 125.09 (8) of the statutes is created to read:
SB268,14,87 125.09 (8) Alcohol vapor devices. No person may use or offer for use, possess,
8or sell or offer for sale in this state an alcohol vapor device.
SB268,26 9Section 26. 125.12 (7) of the statutes is created to read:
SB268,14,1210 125.12 (7) Reapplication for permit after revocation. If the department
11revokes any permit issued under this chapter, the applicant or permit holder may not
12reapply for the permit for a period of 6 months after the date of the revocation.
SB268,27 13Section 27 . 134.65 (title) of the statutes is amended to read:
SB268,14,15 14134.65 (title) Cigarette, electronic vaping devices, and tobacco
15products retailer license.
SB268,28 16Section 28 . 134.65 (1) of the statutes is renumbered 134.65 (1d) and amended
17to read:
SB268,14,2318 134.65 (1d) No person shall in any manner, or upon any pretense, or by any
19device, directly or indirectly sell, expose for sale, possess with intent to sell,
20exchange, barter, dispose of or give away any cigarettes, electronic vaping devices,
21or tobacco products to any person not holding a license as herein provided or a permit
22under ss. 139.30 to 139.41 or 139.79 without first obtaining a license from the clerk
23of the city, village or town wherein such privilege is sought to be exercised.
SB268,29 24Section 29 . 134.65 (1a) of the statutes is created to read:
SB268,14,2525 134.65 (1a) In this section:
SB268,15,1
1(a) “Cigarette” has the meaning given in s. 139.30 (1m).
SB268,15,122 (b) “Electronic vaping device” means a device that may be used to deliver any
3aerosolized or vaporized liquid or other substance for inhalation, regardless of
4whether the liquid or other substance contains nicotine, including an e-cigarette,
5e-cigar, e-pipe, vape pen, or e-hookah. “Electronic vaping device” includes a
6component, part, or accessory of the device, and includes a liquid or other substance
7that may be aerosolized or vaporized by such device, regardless of whether the liquid
8or other substance contains nicotine. “Electronic vaping device” does not include a
9battery or battery charger when sold separately. “Electronic vaping device” does not
10include drugs, devices, or combination products authorized for sale by the U.S. food
11and drug administration, as those terms are defined in the Federal Food, Drug, and
12Cosmetic Act.
SB268,15,1313 (c) “Tobacco products” has the meaning given in s. 139.75 (12).
SB268,15,1414 (d) “Vending machine” has the meaning given in s. 139.30 (14).
SB268,30 15Section 30. 134.65 (1g) of the statutes is created to read:
SB268,15,1816 134.65 (1g) (a) The department of revenue shall create an application form for
17licenses issued under sub. (1d). The form shall require all of the following
18information from an applicant:
SB268,15,2019 1. The applicant's history relevant to the applicant's fitness to hold a license
20under sub. (1d).
SB268,15,2121 2. The kind of license for which the applicant is applying.
SB268,15,2322 3. The premises where cigarettes, electronic vaping devices, or tobacco
23products will be sold or stored.
SB268,15,2524 4. If the applicant is a corporation, the identity of the corporate officers and
25agent.
SB268,16,2
15. If the applicant is a limited liability company, the identity of the company
2members or managers and agent.
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