Chapter 139

139.34(5) (5) The ownership and operation of any retail outlet does not preclude a person from receiving a permit as a distributor or jobber, if more than 50 percent of that person’s sales of cigarettes are at wholesale to retailers, vending machine operators or multiple retailers neither owned, controlled nor operated by that person.

139.34(6) (6) A vending machine operator or a multiple retailer may acquire unstamped cigarettes from the manufacturers thereof and affix the stamps to packages or other containers only if the vending machine operator or multiple retailer also holds a permit as a distributor.

139.34(7) (7) The secretary may require by rule that stamps affixed to cigarette packages be identified by a permit or code number assigned to the person affixing them.

139.34 Cross-reference Cross-reference: See also s. Tax 9.19, Wis. adm. code.

139.34(8) (8) The holder of a warehouse permit is entitled to store cigarettes on the premises described in the permit. The warehouse permit shall not authorize the holder to sell cigarettes. Unstamped cigarettes stored in a warehouse for a manufacturer or distributor may be delivered only to a person holding a permit as a manufacturer or distributor.

139.34(9) (9) The applicant for a permit, if a nonresident, foreign corporation or foreign limited liability company, shall file proof that the applicant has appointed the department of financial institutions as agent for the service of process on any matter arising under ss. 139.30 to 139.44. A foreign corporation without a place of business in this state need not obtain a certificate of authority under ss. 180.1501 to 180.1505. If a foreign corporation has a certificate of authority under ss. 180.1501 to 180.1505, the foreign corporation satisfies this subsection by filing the address of its registered office in this state and the name and e-mail address of its registered agent at that office and by promptly filing any changes to this information. A foreign limited liability company without a place of business in this state need not obtain a certificate of registration under s. 183.0902. If a foreign limited liability company has a certificate of registration under s. 183.0902, the foreign limited liability company satisfies this subsection by filing the name and address, and e-mail address, of its registered agent in this state and by promptly filing any changes to this information.

139.34(10) (10) Every vending machine operator shall in the vending machine operator’s application for a permit list each county in which the vending machine operator operates such machines and state the number of such machines the vending machine operator is then operating in each such county.

139.34 History History: 1971 c. 219; 1973 c. 198; 1975 c. 39 s. 732 (2m); 1977 c. 125; 1979 c. 34, 89, 221; 1981 c. 79 s. 18; 1981 c. 334 s. 25 (1); 1981 c. 380, 391; 1985 a. 313; 1989 a. 303; 1991 a. 32, 39; 1993 a. 112, 482; 1995 a. 27, 448; 1997 a. 27; 2001 a. 16; 2005 a. 25; 2021 a. 258.

139.34 Cross-reference Cross-reference: See also ss. Tax 9.21, 9.56, 9.61, and 9.68, Wis. adm. code.

139.345 139.345 Direct marketing.

139.345(1) (1) 

139.345(1)(a) (a) No person may sell cigarettes to consumers in this state as a direct marketer unless the person submits to the department the person’s name, trade name, address of the person’s principal place of business, phone number, e-mail address, and website address.

139.345(1)(b) (b) No person may sell cigarettes as described under this section unless the person certifies to the department, in the manner prescribed by the department, that the person shall acquire stamped cigarettes from a licensed distributor or unstamped cigarettes from the manufacturer thereof, pay the tax imposed under this subchapter on all unstamped cigarettes and affix stamps to the cigarette packages or containers as provided under s. 139.32 (1), store such packages or containers, and sell only such packages or containers to consumers in this state by direct marketing; or acquire cigarettes from a distributor, to the packages or containers of which stamps have been affixed as provided under s. 139.32 (1), and sell only such packages or containers to consumers in this state by direct marketing.

139.345(1)(d) (d) No person may sell cigarettes as described in this section unless the person certifies to the department, in the manner prescribed by the department, that the person shall register with credit card and debit card companies; that the invoices and all means of solicitation for all shipments of cigarette sales from the person shall bear the person’s name and address; and that the person shall provide the department any information the department considers necessary to administer this section.

139.345(2) (2) No person may sell cigarettes to consumers in this state by direct marketing unless the tax imposed under s. 77.52 or 77.53 is paid on the sale of such cigarettes.

139.345(3) (3) No person may sell cigarettes to consumers in this state unless the person does all of the following:

139.345(3)(a) (a) Verifies the consumer’s name and address and that the consumer is at least 18 years of age by any of the following methods:

139.345(3)(a)1. 1. The person uses a database that includes information based on public records.

139.345(3)(a)2. 2. The person receives from the consumer, at the time of purchase, a copy of a government issued identification.

139.345(3)(a)3. 3. The person uses a mechanism, other than a mechanism specified under subd. 1. or 2., that is approved by the department.

139.345(3)(b) (b) Obtains from the consumer, at the time of purchase, a statement signed by the consumer that confirms all of the following:

139.345(3)(b)1. 1. The consumer’s name, address, and birth date.

139.345(3)(b)2. 2. That the consumer understands that no person who is under 18 years of age may purchase or possess cigarettes or falsely represent his or her age for the purpose of receiving cigarettes, as provided under s. 254.92.

139.345(3)(b)3. 3. That the consumer understands that any person who, for the purpose of obtaining credit, goods, or services, intentionally uses, attempts to use, or possesses with intent to use, any personal identifying information or personal identification document of an individual, including a deceased individual, without the authorization or consent of the individual and by representing that he or she is the individual, that he or she is acting with the authorization or consent of the individual, or that the information or document belongs to him or her, is guilty of a Class H felony, as provided under s. 943.201.

139.345(4) (4) Any person who makes a sale of cigarettes by means of the Internet shall, at the time of purchase, obtain the purchaser’s electronic mail address and shall receive payment for the sale by credit card, debit card, or check prior to shipping.

139.345(5) (5) The invoice for any shipment of cigarettes sold to consumers in this state by direct marketing shall specify the name and address of the seller and any valid permit issued under s. 139.34 that is held by the seller.

139.345(6) (6) All packages of cigarettes shipped to consumers in this state shall be clearly labelled “CIGARETTES” on the outside of such packages.

139.345(7) (7) 

139.345(7)(a) (a) No person may deliver a package of cigarettes sold by direct marketing to a consumer in this state unless the person making the delivery receives a government issued identification card from the person receiving the package and verifies that the person receiving the package is at least 18 years of age. If the person receiving the package is not the person to whom the package is addressed, the person delivering the package shall have the person receiving the package sign a statement that affirms that the person to whom the package is addressed is at least 18 years of age.

139.345(7)(b) (b) No person may deliver a package of cigarettes to a consumer in this state unless the seller of the cigarettes provides proof to the person making the delivery that the seller has complied with all requirements under this subchapter. A seller shall have no course of action against any person who refuses to deliver cigarettes as provided under this subdivision.

139.345 History History: 2005 a. 25; 2017 a. 365 s. 112.

139.35 139.35 Stamps.

139.35(1) (1) Transfers. No person may give, sell or lend any stamps to another and no person may accept, purchase or borrow any stamps from another. All sales and transfers of stamps may be made only by the secretary to permit holding manufacturers, distributors, and bonded direct marketers who are authorized by the department to purchase and affix tax stamps.

139.35(2) (2) Records. The secretary shall keep a record of the sale of all stamps including the names of the purchasers and the date of sale.

139.35 History History: 2005 a. 25.

139.355 139.355 Appeals. Sections 71.88 (1) (a) and (2) (a), 71.89 and 71.90 as they apply to the taxes under ch. 71 apply to the taxes under this subchapter.

139.355 History History: 1991 a. 39.

139.36 139.36 Refunds for unusable stamps. The secretary shall refund to any purchaser the money paid for any stamps returned unfit for use or otherwise unused or which have been affixed to packages which are unsalable. The secretary shall prescribe by rule the proof required to obtain such refund. The permittee shall pay the expenses of determining the amount of such refund.

139.36 History History: 1991 a. 39; 1993 a. 482.

139.36 Cross-reference Cross-reference: See also s. Tax 9.11, Wis. adm. code.

139.362 139.362 Bad debt deductions.

139.362(1) (1) In this section, “bad debt” means an amount that is equal to the purchase price of cigarettes, if such amount may be claimed as a deduction under section 166 of the Internal Revenue Code. “Bad debt” does not include financing charges, interest on the wholesale price of cigarettes, uncollectible amounts on property that remains in the seller’s possession until the full purchase price is paid, expenses incurred in attempting to collect any debt, debts sold or assigned to 3rd parties for collection, and repossessed property.

139.362(2) (2) A person who pays the taxes imposed under this subchapter may claim as a deduction on a return under s. 139.38, and against the purchase of stamps under s. 139.32, the amount of any such taxes that are attributable to bad debt that the person writes off as uncollectible in the person’s books and records and that is eligible to be deducted as bad debt for federal income tax purposes, regardless of whether the person is required to file a federal income tax return. A person who claims a deduction under this section shall claim the deduction on the return under s. 139.38 that is submitted for the period in which the person writes off the amount of the bad debt as uncollectible in the person’s books and records and in which such amount is eligible to be deducted as bad debt for federal income tax purposes. If the person subsequently collects in whole or in part any bad debt for which a deduction is claimed under this section, the person shall submit to the department the portion of the deduction related to the amount collected, in the manner prescribed by the department and for the period in which the amount is collected.

139.362(3) (3) A person who claims a deduction under this section shall submit the claim on a form prescribed by the department and shall submit with the form all of the following:

139.362(3)(a) (a) A copy of the original invoice for the sale of cigarettes that represents bad debt.

139.362(3)(b) (b) Evidence that the cigarettes described in the invoice under par. (a) were delivered to the person who ordered them.

139.362(3)(c) (c) Evidence that the person who ordered and received the cigarettes did not pay the person who claims a deduction under this section for the cigarettes.

139.362(3)(d) (d) Evidence that the person who claims a deduction under this section used reasonable collection practices in attempting to collect the amount owed under par. (c).

139.362(4) (4) Any person who possesses cigarettes for which the taxes imposed under this subchapter have not been paid and have been claimed as a deduction under this section shall file a report as prescribed by the department, pay the taxes imposed under this subchapter on the cigarettes, and be subject to this subchapter in the same manner as is provided for persons who hold valid permits under this subchapter.

139.362 History History: 2005 a. 25.

139.363 139.363 Preferred claims. If the property of any purchaser of cigarettes from any permittee under this subchapter is seized upon any intermediate or final process of any court in this state, or if the business of any purchaser of cigarettes from any permittee under this subchapter is suspended by the action of creditors or put into the hands of any assignee, receiver, or trustee, all amounts that are due from the purchaser to any permittee for taxes imposed under this subchapter that the permittee has paid to the state for cigarettes purchased from the permittee shall be considered preferred claims, and shall be paid in full, and the permittee shall be a preferred creditor.

139.363 History History: 2005 a. 25.

139.365 139.365 Other refunds. Section 71.75 (2), (4) to (7) and (10) as it applies to the taxes under ch. 71 applies to the taxes under this subchapter. Section 71.74 (13) as it applies to the refund of taxes under ch. 71 applies to the refund of taxes under this subchapter.

139.365 History History: 1991 a. 39; 1993 a. 205.

139.37 139.37 Salespersons.

139.37(1) (1) 

139.37(1)(a) (a) No person shall sell or take orders for cigarettes for resale in this state for any manufacturer or permittee without first obtaining a salesperson’s permit from the department of revenue. No manufacturer or permittee shall authorize any person to sell or take orders for cigarettes in this state without first having such person secure a salesperson’s permit. The department shall issue the required number of permits to manufacturers and permittees who hold a valid certificate issued under s. 73.03 (50). Each application for a permit shall disclose the name and address of the employer and such permit shall remain effective only while the salesperson represents such named employer. If such salesperson is thereafter employed by another manufacturer or permittee the salesperson shall obtain a new salesperson’s permit. Each manufacturer and permittee shall notify the department within 10 days after the resignation or dismissal of any such salesperson holding a permit.

139.37(1)(c) (c) Subject to ss. 111.321, 111.322 and 111.335, no permit under this section may be granted to any person who:

139.37(1)(c)1. 1. Has been convicted of a misdemeanor not involving chs. 340 to 349, at least 3 times;

139.37(1)(c)2. 2. Has been convicted of a felony, unless pardoned;

139.37(1)(c)3. 3. Is addicted to the use of a controlled substance or controlled substance analog under ch. 961;

139.37(1)(c)4. 4. Has income which comes principally from gambling, or who has been convicted of 2 or more gambling offenses;

139.37(1)(c)5. 5. Has been guilty of crimes relating to prostitution; or

139.37(1)(c)6. 6. Has been guilty of crimes relating to loaning money or anything of value to persons holding licenses or permits pursuant to ch. 125.

139.37(1)(d) (d) The department of revenue shall immediately notify any person who is denied a permit in writing of the denial and the reasons therefor.

139.37(1)(e) (e) A denial of a permit by the department of revenue is subject to judicial review under ch. 227.

139.37(2) (2) No representative of any manufacturer shall sell more than 3 cartons of any one kind of cigarettes to any retailer at one time.

139.37 History History: 1971 c. 219; 1973 c. 198; 1975 c. 39 s. 732 (2m); 1975 c. 199; 1977 c. 125; 1979 c. 89; 1981 c. 79 s. 18; 1981 c. 334 s. 25 (1); 1981 c. 380, 391; 1983 a. 27 s. 2200 (45); 1995 a. 27, 448.

139.38 139.38 Records, returns.

139.38(1) (1) Every manufacturer located out of the state shall keep records of all sales of cigarettes shipped into this state. Every manufacturer located in the state shall keep records of production, sales and withdrawals of cigarettes. Every distributor and direct marketer shall keep records of purchases and sales of cigarettes. Every manufacturer, bonded direct marketer, and distributor who is authorized by the department to purchase and apply stamps shall also keep records of purchases and disposition of stamps. Every jobber, multiple retailer, and vending machine operator shall keep records of all purchases and disposition of cigarettes. Every warehouse operator shall keep records of receipts and withdrawals of cigarettes. All such records shall be accurate and complete and be kept in a manner prescribed by the secretary. These records shall be preserved on the premises described in the permit or license in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the department.

139.38(1m) (1m) Records of purchases and sales of cigarettes under sub. (1) that are kept by direct marketers shall indicate, for each shipment of cigarettes into this state in the month preceding the report under sub. (2), the invoice date and number; the quantity of cigarettes shipped; the brand name of the cigarettes shipped; the manufacturer of the cigarettes shipped and the point of origin; the purchaser’s name, address, and birth date; the name of the person to whom the cigarettes were shipped; the address to which the cigarettes were shipped; and any other information the department requires.

139.38(2) (2) 

139.38(2)(a) (a) Except as provided in par. (b), every manufacturer, distributor, jobber, and direct marketer shall render a true and correct invoice of every sale of cigarettes and every permittee shall on or before the 15th day of each calendar month file a verified report of all cigarettes purchased, sold, received, warehoused or withdrawn during the preceding calendar month.

139.38(2)(b) (b) The department may allow any jobber, multiple retailer, nonbonded direct marketer, or vending machine operator permittee who does not sell cigarettes, except for those on which the tax under this chapter is paid, to file a quarterly report. The quarterly report shall be filed on or before the 15th day of the next month following the close of each calendar quarter. The report shall specify the number of cigarettes purchased and sold during the preceding calendar quarter.

139.38(2m) (2m) The provisions on timely filing under s. 71.80 (18) apply to the tax under this subchapter.

139.38(3) (3) The secretary shall prescribe reasonable and uniform methods of keeping records and making reports. The secretary shall prescribe and furnish the necessary report forms.

139.38(4) (4) If the secretary finds that the records of any permittee are not kept in the prescribed form or are in such condition that an unusual amount of time is required to determine therefrom the amount of tax due, the secretary shall give notice of such fact to such permittee and, in such notice, require that the records be revised and kept in the prescribed form. If such permittee fails to comply within 30 days the permittee shall pay the expenses reasonably attributable to a proper examination and tax determination at the rate of $30 per day of each auditor. The secretary shall send a bill for such expenses and the permittee shall pay the amount of such bill within 10 days.

139.38(5) (5) If any permittee fails to file a report when due the permittee shall be required to pay a late filing fee of $10. A report that is mailed is filed in time if it is mailed in a properly addressed envelope with postage duly prepaid, which envelope is officially postmarked, or marked or recorded electronically as provided under section 7502 (f) (2) (c) of the Internal Revenue Code, on the date due, and if the report is actually received by the secretary or at the destination that the department prescribes within 5 days of the due date. A report that is not mailed is timely if it is received on or before the due date by the secretary or at the destination that the department prescribes. For purposes of this subsection, “mailed” includes delivery by a delivery service designated under section 7502 (f) of the Internal Revenue Code.

139.38(6) (6) Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m., relating to confidentiality of income and franchise tax returns, apply to any information obtained from any person on a cigarette tax return, report, schedule, exhibit, or other document or from an audit report pertaining to the return, report, schedule, exhibit, or document, except that the department shall publish on its website, at least quarterly, a current list of permits issued to distributors and jobbers under s. 139.34 and include on the list the name and address of the permit holder and the date on which the department issued the permit.

139.38(7) (7) The department may inspect the business records of any retailer doing business on a reservation or on an Indian tribe’s trust land.

139.38 History History: 1977 c. 289 ss. 9, 11m; 1981 c. 20; 1983 a. 27; 1985 a. 302; 1987 a. 312 ss. 11, 17; 1991 a. 39; 1993 a. 482; 1997 a. 27; 2005 a. 25, 49; 2011 a. 68; 2015 a. 216; 2017 a. 17; 2023 a. 73.

139.38 Cross-reference Cross-reference: See also ss. Tax 9.19, 9.22, 9.46, and 9.47, Wis. adm. code.

139.39 139.39 Administration and enforcement.

139.39(1) (1) The department shall administer and enforce ss. 139.30 to 139.44, 139.75 to 139.85 and 134.65. The department shall adopt rules necessary to administer and enforce its duties.

139.39(1m) (1m) The duly authorized employees of the department have all necessary police powers to prevent violations of this subchapter.

139.39(2) (2) Authorized personnel of the department of justice and the department of revenue, and any sheriff, police officer, marshal or constable, within their respective jurisdictions, may at all reasonable hours enter the premises of any permittee or retailer and examine the books and records to determine whether the tax imposed by s. 139.31 has been fully paid and may enter and inspect any premises where cigarettes are made, sold or stored to determine whether ss. 139.30 to 139.44 are being complied with.

139.39(3) (3) The secretary may suspend or revoke the permit of any permittee who violates ss. 100.30 or 139.30 to 139.44 or any rules adopted under sub. (1). The secretary shall revoke the permit of any permittee who violates s. 100.30 3 or more times within a 5-year period.

139.39(4) (4) No suit shall be maintained in any court to restrain or delay the collection or payment of the tax levied in s. 139.31. The aggrieved taxpayer shall pay the tax when due and, if paid under protest, may at any time within 90 days from the date of payment, sue the state to recover the tax paid. If it is finally determined that any part of the tax was wrongfully collected, the secretary of administration shall pay the amount wrongfully collected out of the general fund. A separate suit need not be filed for each separate payment made by any taxpayer, but a recovery may be had in one suit for as many payments as may have been made.

139.39(4m) (4m) Any person who sells, distributes, or manufactures cigarettes and who sustains direct economic or commercial injury as the result of a violation of this chapter may bring an action for injunctive relief.