Chapter 139

subch. I of ch. 139 SUBCHAPTER I

BEVERAGE TAXES

Subch. I of ch. 139 Cross-reference Cross-reference: See also ch. Tax 7, Wis. adm. code.

139.01 139.01 Definitions. In ss. 139.01 to 139.25 unless the context or the subject matter otherwise requires:

139.01(1) (1) “Bottler” means any person other than a brewer or brewpub who places fermented malt beverages in bottles or similar containers.

139.01(2) (2) “Brewer” means any person who manufactures fermented malt beverages for sale or transportation except that brewer does not include a permittee under s. 125.295.

139.01(2c) (2c) “Brewpub” means a permittee under s. 125.295.

139.01(2e) (2e) “Brewpub premises” means any premises covered by a permit issued under s. 125.295.

139.01(2g) (2g) “Department” means the department of revenue.

139.01(2m) (2m) “Cider” means any alcoholic beverage that is obtained from the alcoholic fermentation of the juice of apples or pears and that contains not less than 0.5 percent alcohol by volume and not more than 7.0 percent alcohol by volume. “Cider” includes, but is not limited to, flavored, sparkling and carbonated cider.

139.01(2p) (2p) “Division” means the division of alcohol beverages in the department.

139.01(2r) (2r) “File” means mail or deliver a document that the department prescribes 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.

139.01(3) (3) “Intoxicating liquors” includes all ardent, spirituous, distilled or vinous liquors, liquids, or compounds, whether medicated, proprietary, patented, or not, and by whatever name called, containing one-half of one percent or more of alcohol by volume, which are fit for use for beverage purposes, but does not include fermented malt beverages, as defined in s. 125.02.

139.01(4) (4) “License,” and “fermented malt beverages” have the same meaning as in s. 125.02, and “licensed premises” are premises described in licenses and permits issued by the division, cities, villages, or towns under the authority of said section.

Effective date note NOTE: Sub. (4) is amended eff. 1-1-25 by 2023 Wis. Act 73 to read:

Effective date text (4) “License,” and “fermented malt beverages” have the same meaning as in s. 125.02, and “licensed premises” are premises described in licenses and permits issued by the division, cities, villages, or towns under the authority of said section, other than a permit issued under s. 125.175.

Effective date note NOTE: Sub. (4) is amended eff. 1-1-26 by 2023 Wis. Act 73 to read:

Effective date text (4) “License,” and “fermented malt beverages” have the same meaning as in s. 125.02, and “licensed premises” are premises described in licenses and permits issued by the division, cities, villages, or towns under the authority of said section, other than permits issued under ss. 125.175 and 125.24.

139.01(5) (5) A “manufacturer” is a person, other than a rectifier, who manufactures or distills intoxicating liquors, including selling at wholesale such intoxicating liquors manufactured or distilled by the licensee at the premises designated in the license.

139.01(5m) (5m) “Pay” means mail or deliver funds to the department or, if the department prescribes another method of payment or another destination, use that other method or submit to that other destination.

139.01(5p) (5p) “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.

139.01(6) (6) A “rectifier” is a person who rectifies, purifies or refines distilled spirits or wines by any process other than by original and continuous distillation from mash, wort or wash, through continuous closed vessels or pipes, until the manufacture thereof is complete, or who has in his or her possession any still or leach tub or keeps any other apparatus for the purpose of refining in any manner distilled spirits or the other liquors, or who after rectifying and purifying distilled spirits, by mixing such spirits or liquors with any materials, manufactures any spurious, imitation or compound liquors for sale, and any person who, without rectifying, purifying or refining distilled spirits, by mixing such spirits with any materials, manufactures any spurious, imitation or compound liquors for sale under the name of “whiskey,” “brandy,” “gin,” “rum,” “spirits,” “cordials” or any other name, and who is also a distiller or is under substantially the same management or control as a distiller. A rectifier may sell at wholesale intoxicating liquors rectified by him or her without any other license than that of a rectifier. “Rectifier” does not include a “Class B” licensee that prepares, stores, or dispenses mixed drinks in advance of sale in compliance with s. 125.51 (3) (bg).

139.01(7) (7) “Retailer” as applied to a seller of fermented malt beverages has the same meaning as in s. 125.02, and as applied to a seller of intoxicating liquors is any person who sells such liquors to consumers.

139.01(8) (8) “Secretary” means the secretary of revenue.

139.01(9) (9) “Sell” or “sold” or “sale” or “selling” includes the transfer, gift, barter, trade or exchange of intoxicating liquor or fermented malt beverages; offering or exposing intoxicating liquor or fermented malt beverages for transfer, gift, barter, trade or exchange; possession of intoxicating liquor or fermented malt beverages with intent to transfer, give, barter, trade or exchange the same; or any shift, device, scheme or transaction whatever whereby intoxicating liquor or fermented malt beverages may be obtained; but excludes the solicitation of orders for, or the sale for future delivery.

139.01(9m) (9m) “Sign” means write one’s signature or, if the department prescribes another method of authenticating, use that other method.

139.01(10) (10) “Wholesaler” as applied to a seller of fermented malt beverages has the same meaning as in s. 125.02, and as applied to a seller of intoxicating liquors is any person other than a manufacturer or rectifier who sells such liquors to licensed retailers or other permittees for the purpose of resale.

139.01 History History: 1981 c. 79 s. 18; 1983 a. 189; 1993 a. 482; 1997 a. 27, 136; 2007 a. 20; 2009 a. 177; 2011 a. 32; 2015 a. 55, 216; 2023 a. 73.

139.01 Annotation The definition of “rectifier” under sub. (6) includes a person who mixes distilled spirits with other materials and uses that mixture to manufacture for sale a beverage that contains liquor mixed with other ingredients. Under sub. (6), the phrase “by mixing such spirits ... with any materials” supplies a definition for the otherwise potentially ambiguous preceding phrase “rectifying and purifying distilled spirits.” That is, when one mixes distilled spirits with any materials, one is rectifying and purifying distilled spirits. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.02 139.02 Fermented malt beverages tax.

139.02(1) (1) Tax imposed; rate; limitation. An occupational tax is imposed upon the removal for consumption or sale or selling of fermented malt beverages at the rate of $2 per barrel of 31 gallons and at a proportionate rate for any other quantity or fractional parts thereof. Not more than one occupational tax shall be required to be paid on any one container of fermented malt beverages.

139.02(2) (2) Tax credit to eligible producers.

139.02(2)(a) (a) Each eligible producer shall receive a credit in the amount of 50 percent of the tax paid or payable by the producer under this section in any given calendar year on the first 50,000 barrels taxed under this section in that year.

139.02(2)(b) (b) In this section “eligible producer” means any producer of fermented malt beverages, whether or not located in this state, producing less than 300,000 barrels of fermented malt beverages in the calendar year for which credit under par. (a) is claimed. In determining the number of barrels, all brands or labels of a producer shall be combined. All facilities for the production of fermented malt beverages owned or controlled by the same person shall be deemed a single producer.

139.02 History History: 1973 c. 256; 1977 c. 203.

139.02 Annotation Sales of intoxicating liquors are taxed at higher rates than are sales of the same volume of wine, which are taxed higher than sales of the same volume of fermented malt beverages. This methods-of-production taxation system does not violate the equal protection clause. It is not unconstitutional not to impose higher taxes based on higher alcohol content. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.03 139.03 Liquor tax. An occupational tax is imposed upon the selling of intoxicating liquor as follows:

139.03(2m) (2m) The rate of that tax is 85.86 cents per liter on intoxicating liquor, except wine containing not in excess of 21 percent of alcohol by volume, containing 0.5 percent or more of alcohol by volume. The department of revenue may, by rule, set the amount of the taxes imposed under this section for various sizes of containers if the amounts set are in the same proportion to the size of the containers as the rate per liter under this subsection.

139.03(2n) (2n) The rate of that tax is 6.605 cents per liter on wine other than cider containing 14 percent or less of alcohol by volume, 1.71 cents per liter on cider and 11.89 cents per liter on wine containing more than 14 percent of alcohol by volume but not in excess of 21 percent of alcohol by volume.

139.03(2x) (2x) Intoxicating liquor floor tax imposed; procedures.

139.03(2x)(a) (a) Floor tax imposed. On the date tax rate changes become effective under this section a floor tax is imposed upon every manufacturer, rectifier, wholesaler and retailer who is in possession of any intoxicating liquor held for resale on which the intoxicating liquor tax already has been imposed. The person shall determine the volume of that intoxicating liquor and shall file a return by the 15th day of the month following the month in which the new tax rate becomes effective and shall pay any tax due on it, as determined under par. (b).

139.03(2x)(b) (b) Floor tax computation. The amount of any intoxicating liquor floor tax shall be computed by multiplying the number of liters of intoxicating liquor held in inventory as determined under par. (a) by the difference between the tax rate already paid and the new tax rate, and expressing the resulting figure in dollars.

139.03(2x)(c) (c) Administration. Sections 71.74 (1), (2), (10), (11), (13) and (14), 71.75 (4) to (7), 71.80 (12), 71.82 (2), 71.83 (2) (b) 3., 71.88 (1) (a) and (2) (a), 71.89, 71.90, 71.91 (1) (a) and (c) and (2) to (7), 71.92, 73.01, 73.015 and 73.0301 apply to the administration of this subsection for the assessment and collection of additional taxes when tax rate changes become effective.

139.03(2x)(d) (d) Late filing fee. Any person who fails to file a floor tax return when due shall pay a late filing fee of $10. A return that is mailed shall be considered filed in time if it is mailed in a properly addressed envelope with postage duly prepaid, if the 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 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 paragraph, “mailed” includes delivery by a delivery service designated under section 7502 (f) of the Internal Revenue Code.

139.03(2x)(e) (e) Delinquent interest. If the tax imposed in this subsection is not paid when due, interest at the rate of 1.5 percent per month accrues from the date the tax became due until the tax is paid.

139.03(2x)(f) (f) Penalty. If any person liable for the tax under this subsection files a false or fraudulent return, there shall be added to the tax an amount equal to the tax the person evaded or attempted to evade.

139.03(3) (3) Not more than one occupational tax shall be required to be paid on any one container of intoxicating liquor.

139.03(4) (4) Sections 71.74 (1), (2), (10), (11), (13) and (14), 71.75 (4) to (7), 71.80 (12), 71.82 (2), 71.83 (2) (b) 3., 71.88 (1) (a) and (2) (a), 71.89, 71.90, 71.91 (1) (a) and (c) and (2) to (7), 71.92, 73.01, 73.015 and 73.0301 apply to the administration of this section for the assessment and collection of additional taxes when a tax rate change becomes effective.

139.03(5) (5) 

139.03(5)(a) (a) No person who enters this state from another state may have in his or her possession and bring into the state any intoxicating liquor or wine. The prohibition in this paragraph does not apply to a person who changes his or her domicile from another state or a foreign country to this state and who brings into this state intoxicating liquor and wine constituting household goods. The prohibition in this paragraph does not apply to intoxicating liquor or wine consigned to any person having a permit from the division to engage in the sale of such intoxicating liquor or wine.

139.03(5)(b) (b)

139.03(5)(b)1. 1. Except as provided in subd. 2., any person, except an underage person as defined under s. 125.02 (20m), who leaves a foreign country, after spending at least 48 hours in that foreign country, with the purpose of entering this state may have in that person’s possession and bring into the state intoxicating liquor or wine in sealed original containers in amounts not to exceed, in the aggregate, 4 liters without payment of the tax imposed under this subchapter. The 4 liters of tax-free intoxicating liquor and wines may not be sent, shipped or carried into the state other than in the immediate possession of the person as qualified by this subsection.

139.03(5)(b)2. 2. A person who is a member of the national guard, the U. S. armed forces or a reserve component of the U. S. armed forces; who is a state resident; and who leaves a foreign country, after spending at least 48 hours in that foreign country on duty or for training, with the purpose of entering into this state may bring into the state, in sealed original containers and in the person’s immediate possession, intoxicating liquor and wine in an aggregate amount not exceeding 16 liters without paying the tax imposed under this subchapter on that amount.

139.03(5)(c) (c) Any person who violates any provision of pars. (a) and (b) by having in his or her possession more than the amount specified may be fined not less than $25 nor more than $500 or imprisoned for not more than 90 days or both. If any such person is convicted of a 2nd or subsequent offense, the person may be fined not less than $100 nor more than $500 or imprisoned for not more than 6 months or both.

139.03(5)(d) (d) Any intoxicating liquor or wine involved in a violation of this section is declared forfeit and upon confiscation by the department of revenue shall be disposed of in accordance with s. 125.14 (2) (e).

139.03 History History: 1971 c. 125, 164, 211, 336; 1973 c. 121; 1975 c. 224; 1977 c. 12, 81, 203, 418; 1981 c. 20; 1981 c. 79 s. 18; 1981 c. 317; 1983 a. 27; 1985 a. 302; 1987 a. 312 s. 17; 1987 a. 399; 1993 a. 482; 1995 a. 233; 1997 a. 27, 136, 237; 1999 a. 9; 2001 a. 16; 2005 a. 49; 2023 a. 73.

139.03 Cross-reference Cross-reference: See also s. Tax 8.01, Wis. adm. code.

139.03 Annotation Sales of intoxicating liquors are taxed at higher rates than are sales of the same volume of wine, which are taxed higher than sales of the same volume of fermented malt beverages. This methods-of-production taxation system does not violate the equal protection clause. It is not unconstitutional not to impose higher taxes based on higher alcohol content. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.03 Annotation The occupational liquor tax is not an excise tax upon liquor itself. Instead, it is a tax on the privilege to sell intoxicating liquor and applies only to intoxicating liquor in possession of persons who are engaged in the business of selling intoxicating liquor. Thus, the tax is a tax on sales of liquor and not a tax on liquor. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.035 139.035 Wine shipped directly to individuals in this state.

139.035(1) (1) All wine shipped directly to an individual located in Wisconsin by a person holding a direct wine shipper’s permit under s. 125.535 shall be sold with the occupational tax imposed under s. 139.03 included in the selling price. As directed by the department, the taxes imposed under s. 139.03 shall be paid to, and a quarterly return filed with, the department once every quarter on or before the 15th day of the next month following the close of the calendar quarter. In addition to filing a quarterly liquor tax return, each person holding a direct wine shipper’s permit under s. 125.535 shall be required to file an addendum, on forms furnished by the department, that provides, at minimum, the identity, quantity, and price of all wine shipped to individuals in this state during the previous quarter, along with the name, address, and birthdate of each person who purchased the wine as well as the name of the person of legal drinking age who acknowledged delivery of the wine. Working with permittees under s. 125.535, the department shall develop forms, in both paper and electronic format, for use by such permittees in obtaining this information and complying with any other requirement under this state’s law in connection with the direct shipment of wine. The department shall keep confidential, in the same manner required for tax returns under s. 71.78 (1) and (5) to (8), reports submitted under this subsection, but the department may use aggregated or summary information from such reports for purposes of s. 139.11 (4) (b).

139.035(2) (2) Any failure of a person holding a direct wine shipper’s permit under s. 125.535 to pay the occupational tax or file the addendum required under sub. (1) within 30 days of its due date constitutes grounds for revocation or suspension of the permit. The provisions on timely filing under s. 71.80 (18) apply to the tax and addendum required under this section.

139.035(3) (3) No wine may be shipped directly to an individual in this state by a person holding a direct wine shipper’s permit under s. 125.535 unless the tax imposed under s. 77.52 or 77.53 is paid on the sale of such wine.

139.035 History History: 1987 a. 399; 2007 a. 85.

139.04 139.04 Exclusions. No tax is levied by ss. 139.02 and 139.03 in respect to:

139.04(1) (1) Wine, as defined in s. 125.02 (22), or fermented malt beverages made in compliance with the limitations specified in s. 125.06 (3) (a), (3g), (3r), or (4).

139.04(2) (2) Furnishing by a brewer or brewpub of fermented malt beverages to workmen employed in the brewery or brewpub for consumption on the brewery premises or brewpub premises without charge.

139.04(3) (3) Manufacture or sale of any beverage containing less than one-half of one percent of alcohol by volume.

139.04(4) (4) Sale or shipment of fermented malt beverages by a brewer to a bottler or between brewers, or of intoxicating liquor, whether in bulk or any state of packaging, between manufacturers, rectifiers, and wineries.

139.04(5) (5) Sale, possession or removal of fermented malt beverages or intoxicating liquor for shipment in interstate or foreign commerce.

139.04(6) (6) Sale and use of wine for sacramental purposes.

139.04(7) (7) Sale of alcohol to industrial permittees to be used for industrial purposes.

139.04(7m) (7m) Sale of fermented malt beverages to industrial permittees to be used for industrial purposes.

139.04(8) (8) Sale of alcohol to medicinal permittees to be used for hospital or medicinal purposes.

139.04(9) (9) Sale of wine to industrial wine permittees to be used for industrial purposes.

139.04 History History: 1973 c. 90; 1985 a. 29; 2007 a. 20; 2009 a. 177; 2011 a. 179, 200; 2023 a. 73.

139.04 Cross-reference Cross-reference: See also ss. Tax 8.31 and 8.35, Wis. adm. code.

139.04 Annotation The term “levied” in this section does not mean that tax liability arises but collection is delayed. This section by all appearances is a list of complete, and not delayed, exclusions. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.04 Annotation The plaintiff in this case bought various distilled spirits in bulk from a distillery and mixed the distilled spirits with soda, water, and various flavorings to produce bottles of premixed cocktails that the plaintiff sold to liquor wholesalers, who sold them to retailers. In this case, the first taxable sales of intoxicating liquors under s. 139.06 (1) (b) were sales by the plaintiff of its bottled mixtures to the plaintiff’s wholesaler customers. Sub. (4) excludes from consideration all transactions between the plaintiff and its distiller. Arty’s, LLC v. DOR, 2018 WI App 64, 384 Wis. 2d 320, 919 N.W.2d 590, 17-0886.

139.05 139.05 Payment of malt beverages tax.

139.05(1) (1) The tax imposed in s. 139.02 shall be paid on or before the 15th day of the month following the month in which such malt beverages are first sold in this state or shipped into this state.

139.05(2) (2) Each brewer, brewpub, and bottler in this state and each wholesaler of malt beverages within this state to whom malt beverages are shipped from outside this state shall on or before the fifteenth day of each month file with the secretary on forms prescribed by the secretary a verified return containing such information as may be required to compute and show the amount of occupational tax payable by the brewer, brewpub, bottler, or wholesaler or by the shipper for the next preceding calendar month on malt beverages.

139.05(2a) (2a) The payments and returns under subs. (1) and (2) that are mailed are furnished, filed or made on time, and payments therein referred to are timely, if 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, before midnight on the date prescribed for such furnishing, filing or making of such payment, provided such statement, return or payment is actually received by the secretary of revenue or at the destination that the department prescribes within 5 days of the prescribed date. Payments and returns that are not mailed are timely if they are 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.

139.05(3) (3) The amount of the occupational tax disclosed by the return shall accompany the return and shall be paid to the department.

139.05(4) (4) In order to ensure the payment of the tax under s. 139.02 together with all interest and penalties thereon, all persons required to make returns and payment of such tax shall first either deposit with the secretary security in the amount, and of a type, determined by the secretary or enter into a surety bond with corporate surety, both bond and surety to be approved by the secretary. The secretary shall require a bond in total amount equal to twice the taxpayer’s estimated maximum monthly tax, ascertained in such manner as the secretary deems proper, and the secretary may increase or reduce the amount of the bond, except that the amount of such bond required of any one taxpayer shall not be less than $1,000 nor more than $100,000. These bonds shall be filed. The state shall not pay interest on security placed with the secretary.

139.05(7) (7) 

139.05(7)(a) (a) If any present or future law or regulation effective in any state prohibits a person from shipping into such state a fermented malt beverage produced outside thereof except upon condition that the person shipping such fermented malt beverage into such state first obtain a license therefor from such state and if such license or a renewal thereof may be refused for violation of any law of such state relating to fermented malt beverages, it is unlawful to ship into this state or to purchase or sell within this state any fermented malt beverage produced in such state, unless and until the brewer or brewpub thereof is the holder of a valid subsisting license as provided in this subsection.

139.05(7)(b) (b) Such license shall be issued by the secretary to persons who hold a valid certificate issued under s. 73.03 (50). The application for such license shall be verified and shall contain an agreement on the part of the brewer or brewpub that the brewer or brewpub shall observe all laws of this state relating to fermented malt beverages, and such other information and statements as the secretary may require. Any such brewer or brewpub who has, directly or indirectly, violated any law of this state relating to fermented malt beverages shall not be entitled to such a license. The secretary may require the applicant to furnish a bond payable to the state in an amount not less than $1,000 nor more than $5,000 conditioned upon the faithful compliance by the applicant with the undertakings set forth in the application for the license.

139.05(7)(c) (c) The secretary may suspend or revoke any such license for any false statement made in the application therefor and for any prior or subsequent violation by the licensee, directly or indirectly, or by any person affiliated with or in any way subject to the direction or control of the licensee, of any of the laws of this state relating to fermented malt beverages.