CORRECTED COPY
LRB-1973/1
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2023 - 2024 LEGISLATURE
May 2, 2023 - Introduced by Senators Wanggaard, Taylor, Cowles and James,
cosponsored by Representatives Spiros, Drake, Macco, Steffen, Gundrum,
Ohnstad, O'Connor, Considine, Subeck, Donovan, Baldeh, Palmeri, Goyke,
Conley, C. Anderson, Wittke, Green and Summerfield. Referred to
Committee on Universities and Revenue.
SB268,2,2 1An Act to renumber 565.02 (8) (e); to renumber and amend 125.02 (6), 134.65
2(1), 134.65 (1m) and 565.02 (8) (f); to amend 40.02 (48) (am) 19., 40.02 (48) (c),
371.78 (1), 71.78 (4) (b), 71.78 (5), 71.78 (6), 72.06, 73.031, 77.61 (5) (b) 2., 77.61
4(5) (c), 77.61 (5) (d), 78.80 (3), 125.04 (3) (h), 125.04 (4), 134.65 (title), 134.65 (1r),
5134.65 (4), 134.65 (5m), 134.65 (8), 134.66 (1) (g), 139.11 (4) (a) (intro.), 139.38
6(6), 139.44 (2), 139.44 (8) (a), 139.44 (8) (b) and (c), 139.82 (6), 230.36 (1m) (b)
72. (intro.), 230.36 (2m) (a) 9., 565.17 (5) (a), 565.40 (title), 565.50 (2), 565.50 (3)
8and 946.82 (4); and to create 71.78 (1g), 71.78 (4) (v), 71.83 (6), 73.03 (51b),
977.61 (5) (am), 77.61 (5) (b) 15., 125.02 (1c), 125.02 (6) (b), 125.04 (8m), 125.09
10(8), 125.12 (7), 134.65 (1a), 134.65 (1g), 134.65 (1m) (a) 1. and 2., 134.65 (1m)
11(b), 134.65 (2m), 134.65 (3m), 139.44 (2m), 139.44 (8) (am), 139.44 (8) (d), 565.01
12(6c), 565.02 (9) (intro.), 565.17 (5) (d), 565.40 (4), 565.50 (2m) and 565.50 (4) of

1the statutes; relating to: Department of Revenue enforcement and providing
2a penalty.
Analysis by the Legislative Reference Bureau
This bill makes the following changes related to the Department of Revenue's
enforcement and administration of the laws under its purview:
License to sell cigarettes or tobacco products
The bill creates requirements relating to retail licenses to sell cigarettes or
tobacco products.
Under current law, a person must obtain an annual license from the person's
city, village, or town (municipality) before selling cigarettes or tobacco products.
Under the bill, DOR must create an application form for such licenses. The form
must include the applicant's history relevant to the applicant's fitness to hold a
license; the kind of retailer license for which the applicant is applying; the premises
where cigarettes or tobacco products will be sold or stored; if the applicant is a
corporation, the identity of the corporate officers and agent; if the applicant is a
limited liability company, the identity of the company members or managers and
agent; the applicant's trade name, if any; whether the applicant will sell, exchange,
barter, dispose of, or give away the cigarette or tobacco products over the counter or
in a vending machine, or both; and any other information required by DOR.
The bill requires an applicant for a retail license to sell cigarettes or tobacco
products to use the form created by DOR. An applicant must also sign the application
and notify the municipality of any changes in information to the application within
30 days of the change. In addition, the bill requires the municipality to keep all
submitted applications for at least four years.
Under the bill, a retail license to sell cigarettes or tobacco may be issued only
if the applicant has not been a habitual law offender or been convicted of a felony,
unless pardoned, and the applicant has submitted the proof required by DOR under
current law relating to the collection of sales and use tax. If the applicant is a
business entity that has been convicted of a crime, the business entity may not
receive a retail license unless it has terminated its relationship with the individuals
whose actions directly contributed to the conviction.
The bill also requires municipalities that issue retail licenses to sell cigarettes
or tobacco to submit a list annually to DOR with a list of those licenses and certain
information relating to the licenses and licensees, which DOR must post on its
website.
Finally, the bill requires a licensee to place the licensee's retail license in a
frame with a transparent front and to conspicuously display the license at all times
in the room or place where the licensed activity takes place.
License to sell electronic vaping devices
This bill requires a person who sells electronic vaping devices to obtain a
cigarette and tobacco products retailer license. Specifically, the bill requires a
retailer who sells or offers for sale electronic vaping devices to obtain an annual

license from the clerk of the city, village, or town where the retailer is located. The
bill defines an “electronic vaping device” as a device that may be used to deliver any
aerosolized or vaporized liquid or other substance for inhalation, regardless of
whether the liquid or other substance contains nicotine.
Definition of fermented malt beverages
The bill expands the definition of fermented malt beverages.
Under current law, alcohol beverages that do not meet the definition of
fermented malt beverages are considered intoxicating liquor. Fermented malt
beverages are defined as any beverage made by the alcohol fermentation of an
infusion in potable water of barley malt and hops, with or without unmalted grains
or decorticated and degerminated grains or sugar containing 0.5 percent or more of
alcohol by volume.
This bill expands the definition of a fermented malt beverage to include any
beverage that is recognized under federal regulations as beer, except sake or similar
products.
Publishing a list of retail licenses
The bill requires DOR to publish a list of retail licensees on DOR's website.
Under current law, DOR issues alcohol beverage permits, and municipalities
issue alcohol beverage licenses. Each municipality must annually provide DOR with
a list of the municipality's retail licensees, including name, address, and type of
license. The bill requires DOR to publish this list on DOR's website.
Criminal history search fee
The bill requires an applicant for an alcohol beverages permit issued by DOR
to pay to DOR the criminal history search fee associated with the application.
Under current law, DOR may not issue an alcohol beverages permit to an
applicant that has a disqualifying criminal record. The Department of Justice
charges a fee for a criminal history search. This bill requires the permit applicant
to pay this criminal history search fee incurred by DOR.
Tax return information disclosure
The bill authorizes employees of DOR and DOJ to disclose tax return
information under certain circumstances.
Under the bill, DOR employees may, in connection with their official duties,
disclose tax return information to the extent that the disclosure is necessary to
obtain information for the enforcement of Wisconsin's tax laws. The disclosure must
be strictly limited to, and used solely for the purposes of, obtaining information
necessary for an audit, collection, inspection, or investigation by the DOR employee.
The bill authorizes DOJ employees to disclose, in connection with their official
duties, the tax return information, other than copies of information, they are
authorized to access under current law to a law enforcement investigator
participating in a DOJ investigation. The disclosure must be strictly limited to, and
used solely for the purposes of, obtaining information necessary for a DOJ
investigation.
The bill also specifies that federal and Wisconsin grand juries are authorized
to access tax return information upon DOR's receipt of a grand jury subpoena.

Lottery
Under current law, no employee of the Lottery Division of DOR may purchase
a lottery ticket or lottery share. The bill allows such an employee to purchase a
lottery ticket or a lottery share, if the purchase is made on behalf of the Lottery
Division of DOR as part of an official lottery investigation.
Also under current law, if a person alters or forges a lottery ticket, or utters or
transfers an altered or forged lottery ticket, the person is guilty of a Class I felony.
The bill adds that if a person counterfeits or illegally obtains a lottery ticket, or utters
or transfers a counterfeit or illegally obtained lottery ticket, the person is also guilty
of a Class I felony. The bill also provides that any person who claims a lottery prize
from a winning lottery ticket or share and then transfers the same winning lottery
ticket or share to another person is guilty of a Class I felony.
Under current law, a person who possesses an altered or forged lottery ticket
or share with intent to defraud is guilty of a misdemeanor, subject to a fine of not more
than $10,000 or imprisonment for not more than nine months or both. The bill adds
that a person who possesses a counterfeit, illegally obtained, or previously redeemed
lottery ticket is also guilty of a misdemeanor, subject to a fine of not more than
$10,000 or imprisonment for not more than nine months or both.
Under current law, lottery winnings are subject to withholdings for state taxes,
child support, spousal support, maintenance or family support, assessments, fines,
restitution, and surcharges. Under the bill, if a person transfers a winning lottery
ticket to another person or claims a lottery prize from a transferred ticket with the
intent to avoid these withholdings, the person is guilty of a misdemeanor, subject to
a fine of not more than $10,000 or imprisonment for not more than nine months or
both.
Finally, the bill provides the special agents of DOR with all necessary police and
peace officer powers to prevent and enforce violations of the lottery law, including the
power to make an arrest under conditions set forth under current law for a law
enforcement officer to make an arrest. Under current law, a law enforcement officer
may arrest a person if the officer has a warrant for the person's arrest or has
reasonable grounds to believe that this state or another state has issued a warrant
for the person's arrest. In addition, a law enforcement officer may arrest a person
if the officer has reasonable grounds to believe that the person is committing or has
committed a crime.
Possession of alcohol vapor devices
The bill prohibits a person from using, possessing, or selling an alcohol vapor
device, which is a device that turns an alcohol beverage into a vapor or mist to be
inhaled.
Penalties for evading excise taxes and unlawful possession of cigarettes
The bill increases the penalties for evading the excise taxes imposed on
cigarettes, tobacco products, and electronic vaping devices.
Under current law, a person who attempts to evade these taxes, or who aids in
or abets the evasion or attempted evasion of these taxes, may be fined not more than
$10,000 or imprisoned for not more than nine months, or both.

Under the bill, a person who evades or attempts to evade these taxes, or who
aids in or abets the evasion or attempted evasion of these taxes, is guilty of the
following:
1. A Class A misdemeanor if the amount of the tax is no more than $2,500.
2. A Class I felony if the amount of the tax is more than $2,500, but no more
than $5,000.
3. A Class H felony if the amount of the tax is more than $5,000, but no more
than $10,000.
4. A Class G felony if the amount of the tax is more than $10,000, but no more
than $100,000.
5. A Class F felony if the amount of tax is more than $100,000.
The bill also increases the penalties for the unlawful possession of cigarettes.
Under current law, a person who unlawfully possesses up to 6,000 cigarettes is
subject to a fine of not more than $200 or imprisonment for not more than six months,
or both. A person who unlawfully possesses more than 6,000 cigarettes but no more
than 36,000 cigarettes is subject to a fine of not more than $1,000 or imprisonment
for not more than one year in county jail, or both. A person who unlawfully possesses
more than 36,000 cigarettes is guilty of a Class I felony.
Under the bill, the penalties are increased as follows:
1. A person who unlawfully possesses no more than 200 cigarettes may be fined
not more than $200 or imprisoned for not more than six months, or both.
2. A person who unlawfully possesses more than 200 cigarettes but no more
than 3,000 cigarettes may be fined not more than $1,000 or imprisoned for not more
than one year, or both.
3. A person who unlawfully possesses more than 3,000 cigarettes but no more
than 5,000 cigarettes is guilty of a Class I felony.
4. A person who unlawfully possesses more than 5,000 cigarettes but no more
than 10,000 cigarettes is guilty of a Class H felony.
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.
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