“Indian tribe" means a federally recognized American Indian tribe or band in this state.
“Jobber" means any person who acquires stamped cigarettes from manufacturers or distributors, stores them and sells them to retailers for resale.
“Manufacturer" means any person who manufactures cigarettes for the purpose of sale, including the authorized agent of a person who manufactures cigarettes for the purpose of sale. “Manufacturer" includes a person who owns an automated roll-your-own machine that is used to make cigarettes, but does not include an individual who owns a roll-your-own machine and uses the machine in his or her home solely to make cigarettes for his or her personal use or for the use of other individuals who live in his or her home.
“Multiple retailer" means any person who acquires stamped cigarettes from manufacturers or permittees, stores them and sells them to consumers through 10 or more retail outlets which he or she owns and operates within or without this state.
“Nonbonded direct marketer" means any person who acquires stamped cigarettes from the manufacturers or distributors, stores them, and sells them by direct marketing to consumers for their own personal use.
“Pay" means mail or deliver funds to the department or, if the department prescribes another method of submitting or another destination, use that other method or submit to that other destination.
“Person" includes any individual, sole proprietorship, partnership, limited liability company, corporation, or association. A single-owner entity that is disregarded as a separate entity under ch. 71
is disregarded as a separate entity for purposes of this subchapter.
“Reservation" means all land within the boundaries of the Bad River, Forest County Potawatomi, Lac Courte Oreilles, Lac du Flambeau, Menominee, Mole Lake, Oneida, Red Cliff, St. Croix and Stockbridge-Munsee reservations and the Winnebago Indian communities.
“Secretary" means the secretary of revenue.
“Sell" or “sale" includes the transfer, gift, barter, trade or exchange or any shift, device, scheme or transaction whereby cigarettes may be obtained and the solicitation of orders for, or the sale for, future delivery of cigarettes.
“Sign" means write one's signature or, if the department prescribes another method of authenticating, use that other method.
“Stamp" means the authorized indicia of cigarette tax payment including water transfer stamps and heat applied stamps.
“Trust lands" means any lands in this state held in trust by the U. S. government for the benefit of a tribe or a member of a tribe.
“Vending machine" is any mechanical device which automatically dispenses cigarettes upon the deposit therein of specified coins in payment for such cigarettes.
“Vending machine operator" means a person who acquires stamped cigarettes from manufacturers or permittees, stores them and sells them through the medium of vending machines which he or she owns, operates or services and which are located on premises which are owned or under the control of other persons.
“Warehouse" means the premises where any person is lawfully engaged in the business of storing cigarettes for profit but shall not include the premises where common carriers store cigarettes which are received by them as common carriers and are in transit in interstate commerce.
Tax imposed; exceptions. 139.31(1)
An excise tax is imposed on the sale, offering or exposing for sale, possession with intent to sell or removal for consumption or sale of cigarettes or other disposition for any purpose whatsoever. The tax is imposed at the time and place of the first taxable event occurring in this state. The tax shall be passed on to the ultimate consumer of the cigarettes. All cigarettes received in this state for sale or distribution within this state, except cigarettes actually sold as provided in sub. (3)
, shall be subject to such tax. Any person licensed under ch. 100
and this chapter to have untaxed cigarettes in his or her possession which are lost, stolen, destroyed or which have mysteriously disappeared shall be liable for and shall pay the tax thereon. The tax shall be at the following rates:
On cigarettes weighing not more than 3 pounds per thousand, 126 mills on each cigarette.
On cigarettes weighing more than 3 pounds per thousand, 252 mills on each cigarette.
In addition to the rate under par. (a)
, on cigarettes weighing not more than 3 pounds per thousand, on each cigarette 8 mills minus the tax imposed on that cigarette under 26 USC 5701
, but not less than zero.
In addition to the rate under par. (b)
, on cigarettes weighing more than 3 pounds per thousand, on each cigarette, 16.8 mills minus the tax imposed on that cigarette under 26 USC 5701
, except that if the cigarette is more than 6.5 inches in length it shall be taxed at the rate under par. (c)
rather than at the rate under this paragraph, counting each 2.75 inches or fraction thereof of the length as one cigarette. The amount under this paragraph shall not be less than zero.
Cigarettes sold to post exchanges of the armed forces of the United States and to federally operated veterans hospitals in this state and cigarettes sold to an interstate carrier of passengers for hire to be resold to bona fide passengers actually being transported and cigarettes sold for shipment outside this state in interstate commerce are not subject to the tax.
No person may sell or distribute in this state, acquire, store, possess, or transport for sale or distribution in this state, import or cause to be imported into this state for sale or distribution in this state, or affix stamps as described under s. 139.32
to, any of the following:
A cigarette package on which a statement, label, stamp, sticker, or notice indicates that the manufacturer did not intend the cigarettes in the package to be sold, distributed, or used in the United States, including labels stating “for export only," “U.S. tax exempt," “for use outside U.S.," or similar wording.
A cigarette package that has been altered as described in sub. (5)
Any cigarettes that are imported into the United States in violation of federal law.
No person may alter a cigarette package before the sale or distribution to the ultimate consumer so as to remove, conceal, or obscure any of the following:
Any health warning that is not specified in or that does not conform with the requirements under 15 USC 1333
No person may affix stamps, as described in s. 139.32
, to any cigarette package that is altered as described in par. (a)
(6) Subsections (4)
do not apply to cigarettes that may be brought into the United States for personal use and cigarettes that are sold or intended for sale by a duty-free enterprise, as provided under 19 USC 1555
, not including cigarettes that are brought into a customs territory, as defined under 19 USC 1555
(2) (b) (C), for resale within the customs territory.
See also ss. Tax 9.21
, and 9.51
, Wis. adm. code.
State cigarette tax laws do not apply to Indian persons or Indian tribes selling cigarettes on Indian reservations. 68 Atty. Gen. 151.
Cigarette inventory tax imposed; procedures. 139.315(1)(1)
Inventory tax imposed.
On the effective date of any increase in the sum of the rates under s. 139.31 (1) (a)
or in the sum of the rates under s. 139.31 (1) (b)
, an inventory tax is imposed upon cigarettes held in inventory for sale or resale on which the cigarette tax has been paid at the prior rate and upon unaffixed stamps in the possession of distributors. Any person who is in possession of any such cigarettes or unaffixed stamps shall pay the tax imposed under this section. Any person liable for this tax shall determine the number of cigarettes and unaffixed stamps in the person's possession on the effective date of the increase, and by the 30th day after the effective date of the increase the person shall file a return and shall by that date pay the tax due.
(2) Inventory tax computation.
The cigarette inventory tax under this section is computed by multiplying the number of cigarettes held in inventory for sale or resale by the difference between the prior tax rate and the new tax rate and adding to that amount an amount determined by multiplying the number of unaffixed stamps held by the difference between the prior tax rate and the new tax rate.
(3) Administration. Sections 71.74 (1)
, 71.75 (4)
, 71.80 (12)
, 71.82 (2)
, 71.83 (2) (b) 3.
, 71.88 (1) (a)
and (2) (a)
, 71.91 (1) (a)
apply to this section.
(4) Late filing fee.
Any person who fails to file a cigarette inventory tax return when due shall pay a late filing fee of $10. A return that is mailed is timely if it is mailed in a properly addressed envelope with postage prepaid, if the envelope is postmarked, or marked or recorded electronically as provided under section 7502
(f) (2) (c) of the Internal Revenue Code, on the due date and if the return is actually received by the department or at the destination that the department prescribes within 5 days of the due date. A return that is not mailed is timely if it is received on or before the due date by the department 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.
(5) Interest on delinquent payments.
If any person does not timely pay the tax imposed under this section, that person is liable for interest at the rate of 1.5 percent per month or fraction of a month from the date the tax is due until the date when the tax is paid.
If any person who is liable for the tax under this section files a false or fraudulent return, that person is also liable, in addition to the tax due, for an amount equal to the amount of tax the person evaded or attempted to evade.
Payment of taxes. 139.32(1)
The tax imposed by s. 139.31 (1)
shall be paid. To evidence the payment, the department shall provide stamps. A person who has paid the tax shall affix stamps of the proper denomination to each package in which cigarettes are packed, prior to the first sale within this state. First sale does not include a sale by a manufacturer to a distributor or to a bonded direct marketer or by a distributor to a permittee who has obtained department approval as provided for in s. 139.321 (1) (a) 2.
The tax shall be paid only once on each package or container.
The secretary shall prepare and have available for sale stamps of such denominations and quantities as the secretary considers necessary for the payment of the taxes imposed by s. 139.31
. The stamps shall be of such designs and materials as to make the removal and reuse thereof impossible after being once affixed.
The secretary shall prepare and have available for sale distinctive stamps, which shall be affixed to all packages of cigarettes in respect to which a refund can be made under s. 139.323
and only to those packages.
Stamps shall be affixed in the manner prescribed by the secretary.
In lieu of stamps the secretary may authorize impressions applied by the use of meter machines. The secretary shall prescribe by rule the type of impression and the kind of machines which may be used.
Manufacturers, bonded direct marketers, and distributors who are authorized by the department to purchase tax stamps shall receive a discount of 0.8 percent of the tax paid on stamp purchases.
Distributors, bonded direct marketers, and manufacturers shall pay to the department the cost of printing and shipping those stamps.
Manufacturers, bonded direct marketers, and distributors who are authorized by the department to purchase tax stamps may purchase stamps on credit. The secretary may require manufacturers, bonded direct marketers, and distributors who purchase stamps on credit to file under the conditions prescribed by the secretary by rule.
Beginning on September 1, 1993, the cost to print stamps is the actual cost to print stamps, adjusted to reflect the expenses incurred to print stamps during the previous year and the reimbursement received for that purpose during the previous year, as determined by the department. Beginning in 1994, the department shall annually determine that cost and shall make the new cost effective on July 1.
Unlawful possession of cigarettes. 139.321(1)
It is unlawful for any person to possess cigarettes unless the required stamps are properly affixed as provided in ss. 139.32 (1)
and 139.33 (4)
This subsection shall not apply to the following:
Manufacturers, distributors or warehouse operators possessing valid permits issued by the secretary.
Any permittee under s. 139.34
having department approval or person authorized to acquire, possess or sell unstamped cigarettes under s. 139.31 (3)
provided that said permittee or person maintains a separate inventory thereof and records pertaining thereto in such manner and form as the department prescribes by rule.
Common carriers licensed by the interstate commerce commission to carry such commodities in interstate commerce who are in possession of proper bills of lading covering each such shipment. The department may by rule require that copies of all such bills of lading, clearly indicating thereon the quantities of cigarettes transported, be furnished to it.
No retailer may possess cigarettes purchased from any person except a manufacturer, distributor or jobber who holds a valid permit from the department.
History: 1993 a. 16
; 2005 a. 25
The secretary may require any person who has not paid the tax under s. 139.31 (1)
or who has failed timely to file a report for that tax to place with the department security in the amount that the secretary determines. That security may be a surety bond that is payable to this state and that is in the form prescribed by the secretary.
The secretary may refuse to issue a permit to, and may revoke the permit of, any person who is required to place security with the department under sub. (1)
and fails to do so.
The department may not pay interest on security placed with the department under sub. (1)
After giving 10 days' notice, the secretary may recover any tax, interest, penalties and other charges due the department from the security of any person who is delinquent under this subchapter.
History: 1993 a. 16
Refunds to Indian tribes.
The department shall refund 70 percent of the taxes collected under s. 139.31 (1)
in respect to sales on reservations or trust lands of an Indian tribe to the tribal council of the tribe having jurisdiction over the reservation or trust land on which the sale is made if all the following conditions are fulfilled:
The tribal council has filed a claim for the refund with the department.
The tribal council has approved the retailer.
The land on which the sale occurred was designated a reservation or trust land on or before January 1, 1983, or on a later date as determined by an agreement between the department and the tribal council.
The cigarettes were not delivered by the retailer to the buyer by means of a common carrier, a contract carrier or the U.S. postal service.
The retailer has not sold the cigarettes to another retailer or to a jobber.
See also ss. Tax 9.08
, Wis. adm. code.
The phrase “was designated a reservation or trust land" in sub. (3) is necessarily read as referring to the applicable formal process that must occur in order for land to be a reservation or trust land. Because the proper authorities had not completed the necessary steps for the property in question to be designated a reservation or trust land on or before January 1, 1983, and because that is required in order to qualify for the tax refund, a claim for refund was properly denied. Ho-Chunk Nation v. DOR, 2009 WI 48
, 317 Wis. 2d 553
, 766 N.W.2d 738
Agreements with Indian tribes.
The department may enter into agreements with Indian tribes to provide for the refunding of the cigarette tax imposed under s. 139.31 (1)
on cigarettes sold on reservations to enrolled members of the tribe residing on the tribal reservation.
History: 1983 a. 27
See also ss. Tax 9.08
, Wis. adm. code.
A use tax is imposed and levied upon the use of cigarettes in this state by any person for any purpose if the excise tax imposed by s. 139.31
has not been paid on such cigarettes. Such tax is levied and shall be collected at the same rates as provided for in s. 139.31
. The tax imposed by this section is not applicable to cigarettes subject to the excise tax imposed by s. 139.31
nor to cigarettes exempt from that tax under s. 139.31 (3)
No person other than a member of the armed forces, as specified in this subsection, a distributor, or a bonded direct marketer who is authorized by the department to purchase and affix tax stamps may import into this state cigarettes on which the excise tax imposed by s. 139.31
has not been paid and the container of which does not bear proper stamps. Within 15 days, any such person importing cigarettes shall file a declaration of such cigarettes imported and shall remit therewith the tax on such cigarettes imposed by this section. Members of the armed forces shall not be required to report or pay the tax on cigarettes in their possession if such cigarettes are issued to them by the U.S. government or any of its subdivisions or were purchased in any armed forces post exchange or service store for their personal use or consumption. If the use tax imposed by this section is not paid when due, it shall become delinquent and the person liable for it shall pay, in addition, a penalty of $25 for each 200 cigarettes. Interest on the delinquent tax and penalty shall accrue at the rate of 1.5 percent per month or each fraction of a month from the date the tax became due until paid.