JK:jld&sac:rs
2013 - 2014 LEGISLATURE
November 1, 2013 - Introduced by Representatives Bies, Berceau, Bernard
Schaber, Bewley, Billings, Genrich, Goyke, Hesselbein, Hulsey, Kahl,
Kolste, Krug, T. Larson, Mason, Murphy, Ohnstad, A. Ott, Richards,
Riemer, Ringhand, Sargent, Spiros, Tittl and Wright, cosponsored by
Senators Harris, Carpenter, Hansen, Lehman and Shilling. Referred to
Committee on State Affairs and Government Operations.
AB481,1,6
1An Act to amend 73.01 (4) (a), 134.66 (4) (a) 1., 139.30 (1m), 139.75 (5d), 139.75
2(12), 139.76 (1), 139.78 (1), 139.78 (2), 139.803 (intro.), 139.805 and 139.82 (8);
3and
to create 134.66 (2) (f), 139.75 (4b), 139.75 (9n), 139.75 (14), 139.76 (3),
4139.761 and 139.78 (3m) of the statutes;
relating to: a minimum tax on tobacco
5products, placement of cigarettes or tobacco products by retailers, and
6providing a penalty.
Analysis by the Legislative Reference Bureau
Under current law, the excise tax rate on tobacco products sold in this state is
71 percent of the manufacturer's list price to distributors, except that the tax rate on
moist snuff sold in this state is 100 percent of the manufacturer's list price to
distributors. Under current law, the maximum tax on cigars is 50 cents for each
cigar.
This bill increases the tobacco products tax rate on tobacco products, not
including moist snuff, to 84 percent of the manufacturer's list price to distributors
and eliminates the maximum rate on cigars of 50 cents on each cigar. Under the bill,
however, the excise tax rate on tobacco products sold or consumed in this state is the
greater of the rate based on the manufacturer's list price or the rate determined as
follows:
1. For a package of four cigars, an amount equal to the amount of the cigarette
excise tax (cigarette tax) imposed on a pack of 20 cigarettes, and at a proportionate
rate for any other quantity.
2. For single-unit tobacco products, on each single-use unit, an amount equal
to the cigarette tax imposed on one cigarette.
3. For any smokeless tobacco product that consists of loose tobacco, including
moist snuff, on 1.2 ounces, an amount equal to the cigarette tax imposed on a pack
of 20 cigarettes, and at a proportionate rate for any other quantity.
4. For any loose tobacco that is intended for smoking, on 0.65 ounce, an amount
equal to the cigarette tax imposed on a pack of 20 cigarettes, and at a proportionate
rate for any other quantity.
5. For any other tobacco product, on each package or container, an amount
equal to the cigarette tax imposed on a pack of 20 cigarettes.
Under current law the cigarette tax is 12.6 cents per cigarette ($2.52 for a pack
of 20 cigarettes). Under current law, an inventory tax is imposed on cigarettes held
in inventory for sale or resale so that, if the cigarette tax rate increases, the person
holding cigarettes in inventory must pay the increase on those cigarettes. The bill
creates an inventory tax on tobacco products held in inventory for sale or resale so
that, if the tobacco products tax rates increase, the person holding tobacco products
must pay the increase on those products.
Under current law, for cigarette tax purposes, a cigarette is defined as any roll
of tobacco wrapped in paper or any substance other than tobacco. Under the bill, a
cigarette is defined as any roll of tobacco weighing not more than 4.5 pounds per
thousand that is wrapped in paper or any substance other than tobacco or that is
wrapped in any substance containing tobacco that, because of the type of tobacco
used in the filter or because of its appearance, size, packaging, pricing, or marketing,
is likely to be offered to, purchased by, or consumed by individuals as a cigarette,
regardless of how the roll of tobacco is labeled, but not including any roll of tobacco
that is wrapped in whole tobacco leaf and does not have a filter.
Under current law, for purposes of the tax imposed on tobacco products, moist
snuff is defined as any finely cut, ground, or powdered smokeless tobacco that is
intended to be placed or dipped in the mouth. Under the bill, moist snuff is defined
as any finely cut, ground, or powdered smokeless tobacco, or blend containing
tobacco, that is intended for oral consumption without being lit.
Under current law, a retailer of cigarettes or tobacco products must obtain a
license from the city, village, or town in which the sales take place. Current law also
imposes certain restrictions on a retailer's sale of cigarettes or tobacco products. This
bill creates a new restriction by allowing a retailer to place the cigarettes or tobacco
products only in locations that are inaccessible to customers without the assistance
of the retailer or the retailer's employee or agent. The bill specifies that an allowable
location includes behind the counter or in a locked case. The bill's restriction does
not apply to cigarettes or tobacco products sold in a vending machine or at a business
where individuals under the age of 18 are prohibited from entering. Current law
imposes restrictions on sales from a vending machine that this bill does not affect.
A retailer who violates the bill's restriction is subject to the same penalties that
apply to violations of certain restrictions that apply under current law to retailers
of cigarettes or tobacco products. Those penalties include: 1) a forfeiture of not more
than $500, if the retailer has committed a previous violation within 12 months; 2) a
forfeiture of not less than $200 nor more than $500, if the retailer has not committed
a previous violation within 12 months; and 3) suspension of the retailer's license for
a period of time that depends on the number of previous violations committed by the
retailer.
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:
AB481,1
1Section
1. 73.01 (4) (a) of the statutes is amended to read:
AB481,3,192
73.01
(4) (a) Subject to the provisions for judicial review contained in s. 73.015,
3the commission shall be the final authority for the hearing and determination of all
4questions of law and fact arising under sub. (5) and s. 72.86 (4), 1985 stats., and ss.
570.38 (4) (a), 70.397, 70.64, and 70.995 (8), s. 76.38 (12) (a), 1993 stats., ss. 76.39 (4)
6(c), 76.48 (6), 76.91, 77.26 (3), 77.59 (5m) and (6) (b), 78.01, 78.22, 78.40, 78.555,
7139.02, 139.03, 139.06, 139.31, 139.315, 139.33, 139.76,
139.761, 139.78, 341.405,
8and 341.45, subch. XIV of ch. 71, and subch. VII of ch. 77. Whenever with respect
9to a pending appeal there is filed with the commission a stipulation signed by the
10department of revenue and the adverse party, under s. 73.03 (25), or the department
11of transportation and the adverse party agreeing to an affirmance, modification, or
12reversal of the department of revenue's or department of transportation's position
13with respect to some or all of the issues raised in the appeal, the commission shall
14enter an order affirming or modifying in whole or in part, or canceling the assessment
15appealed from, or allowing in whole or in part or denying the petitioner's refund
16claim, as the case may be, pursuant to and in accordance with the stipulation filed.
17No responsibility shall devolve upon the commission, respecting the signing of an
18order of dismissal as to any pending appeal settled by the department of revenue or
19the department of transportation without the approval of the commission.
AB481,2
1Section
2. 134.66 (2) (f) of the statutes is created to read:
AB481,4,72
134.66
(2) (f) A retailer may place cigarettes or tobacco products only in
3locations that are inaccessible to customers without the assistance of the retailer or
4the retailer's employee or agent, including behind the counter or in a locked case.
5This paragraph does not apply to cigarettes or tobacco products sold from a vending
6machine or at a business where individuals who are less than 18 years old are
7prohibited from entering.
AB481,3
8Section
3. 134.66 (4) (a) 1. of the statutes is amended to read:
AB481,4,119
134.66
(4) (a) 1. In this paragraph, "violation" means a violation of sub. (2) (a),
10(am), (cm),
or (e)
, or (f) or a local ordinance which strictly conforms to sub. (2) (a), (am),
11(cm),
or (e)
, or (f).
AB481,4
12Section
4. 139.30 (1m) of the statutes is amended to read:
AB481,4,1913
139.30
(1m) "Cigarette" means any roll of tobacco
weighing not more than 4.5
14pounds per thousand that is wrapped in paper or any substance other than tobacco
15or that is wrapped in any substance containing tobacco that, because of the type of
16tobacco used in the filter or because of its appearance, size, packaging, pricing, or
17marketing, is likely to be offered to, purchased by, or consumed by individuals as a
18cigarette, regardless of how the roll of tobacco is labeled, but not including any roll
19of tobacco that is wrapped in whole tobacco leaf and does not have a filter.
AB481,5
20Section
5. 139.75 (4b) of the statutes is created to read:
AB481,4,2321
139.75
(4b) "Dry pipe tobacco" means tobacco that is labeled as pipe tobacco
22but, because of its moisture content and pricing, is likely to be offered to, purchased
23by, or consumed by individuals as tobacco for rolling cigarettes.
AB481,6
24Section
6. 139.75 (5d) of the statutes is amended to read:
AB481,5,4
1139.75
(5d) "Moist snuff" means any finely cut, ground, or powdered smokeless
2tobacco
, or blend containing tobacco, that is intended
to be placed or dipped in the
3mouth for oral consumption without being lit, not including any single-unit tobacco
4product.
AB481,7
5Section
7. 139.75 (9n) of the statutes is created to read:
AB481,5,96
139.75
(9n) "Single-unit tobacco product" means any tobacco product other
7than a cigarette or cigar that is is offered in discrete single-use tablets, lozenges,
8pouches, pills, or other single dose or single unit, or in packages of such single-use
9doses or units.
AB481,8
10Section
8. 139.75 (12) of the statutes is amended to read:
AB481,5,2311
139.75
(12) "Tobacco products" means cigars; cheroots; stogies; periques;
12granulated, plug cut, crimp cut, ready-rubbed and other smoking tobacco; snuff,
13including moist snuff;
single-unit tobacco products; snuff flour; cavendish; plug and
14twist tobacco; fine cut and other chewing tobaccos; shorts; refuse scraps, clippings,
15cuttings and sweepings of tobacco and
other kinds and forms of tobacco prepared in
16such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both
17for chewing and smoking any other product containing, or made or derived from,
18tobacco that is intended for human consumption, regardless of whether it is chewed,
19smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by other means;
20but "tobacco products" does not include cigarettes, as defined under s. 139.30 (1m)
,
21or any tobacco product that the federal Food and Drug Administration has approved
22for sale as a tobacco cessation or tobacco dependence product, or for another medical
23purpose, and that is being marketed and sold solely for the approved purpose.
AB481,9
24Section
9. 139.75 (14) of the statutes is created to read:
AB481,6,3
1139.75
(14) "Wet pipe tobacco" means tobacco that is intended for smoking in
2a pipe and that is not suitable or practical for use in rolling cigarettes because of its
3moisture content and pricing.
AB481,10
4Section
10. 139.76 (1) of the statutes is amended to read:
AB481,6,245
139.76
(1) An Except as provided in sub. (3), an excise tax is imposed upon the
6sale, offering or exposing for sale, possession with intent to sell or removal for
7consumption or sale or other disposition for any purpose of tobacco products by any
8person engaged as a distributor of them at the rate, for tobacco products, not
9including moist snuff, of
71 84 percent of the manufacturer's established list price
10to distributors without diminution by volume or other discounts on domestic
11products and, for moist snuff, at the rate of 100 percent of the manufacturer's
12established list price to distributors without diminution by volume or other discounts
13on domestic products.
The tax imposed under this subsection on cigars shall not
14exceed an amount equal to 50 cents for each cigar. On products imported from
15another country, not including moist snuff, the rate of tax is
71 84 percent of the
16amount obtained by adding the manufacturer's list price to the federal tax, duties
17and transportation costs to the United States. On moist snuff imported from another
18country, the rate of the tax is 100 percent of the amount obtained by adding the
19manufacturer's list price to the federal tax, duties, and transportation costs to the
20United States. The tax attaches at the time the tobacco products are received by the
21distributor in this state. The tax shall be passed on to the ultimate consumer of the
22tobacco products. All tobacco products received in this state for sale or distribution
23within this state, except tobacco products actually sold as provided in sub. (2), shall
24be subject to such tax.
AB481,11
25Section
11. 139.76 (3) of the statutes is created to read:
AB481,7,3
1139.76
(3) Beginning on the effective date of this subsection .... [LRB inserts
2date], a person who is subject to the tax imposed under sub. (1) shall pay the greater
3of the amount determined under sub. (1) or the following:
AB481,7,74
(a) For a package of 4 cigars, an amount equal to the amount of the tax imposed
5under s. 139.31 (1) (a) on a pack of 20 cigarettes, and at a proportionate rate for any
6other quantity. No cigars with a wholesale price of less than $1 per cigar may be sold
7in this state in a package containing fewer than 5 such cigars.
AB481,7,118
(b) For single-unit tobacco products, on each single-use unit, an amount equal
9to the amount of the tax imposed under s. 139.31 (1) (a) on one cigarette. No
10single-unit tobacco products may be sold in this state in packages containing fewer
11than 20 single-use units.
AB481,7,1512
(c) For any smokeless tobacco product that consists of loose tobacco, including
13moist snuff, or that is otherwise not a product described under par. (b), on 1.2 ounces,
14an amount equal to the tax imposed under s. 139.31 (1) (a) on a pack of 20 cigarettes,
15and at a proportionate rate for any other quantity.
AB481,7,1916
(d) For any loose tobacco that is intended for smoking, including dry pipe
17tobacco, but not including wet pipe tobacco, on 0.65 ounces, an amount equal to the
18tax imposed under s. 139.31 (1) (a) on a pack of 20 cigarettes, and at a proportionate
19rate for any other quantity.
AB481,7,2420
(e) For any tobacco product other than that listed in pars. (a) to (d), on each
21package or container, an amount equal to the tax imposed under s. 139.31 (1) (a) on
22a pack of 20 cigarettes. For purposes of this paragraph, the tax applies to the
23smallest, discrete package or container in any larger package or container intended
24for sale to consumers that contains multiple smaller packages or containers.
AB481,12
25Section
12. 139.761 of the statutes is created to read:
AB481,8,10
1139.761 Tobacco products inventory tax imposed; procedures. (1) 2Inventory tax imposed. On the effective date of any increase in the rates under s.
3139.76 (1) and (3), including any increase in the rates calculated under s. 139.76 (3)
4resulting from an increase in the rate imposed under s. 139.31 (1) (a), an inventory
5tax is imposed on tobacco products held in inventory for sale or resale on which the
6tobacco products tax has been paid at the prior rate. Any person who is in possession
7of any such tobacco products shall pay the tax imposed under this section. Any
8person liable for this tax shall determine the amount of the tobacco products in the
9person's possession on the effective date of the increase and shall file a return, and
10pay the tax due, on or before the 30th day after the effective date of the increase.
AB481,8,13
11(2) Inventory tax computation. The tobacco products inventory tax under this
12section is computed by multiplying the amount of tobacco products held in inventory
13for sale or resale by the difference between the prior tax rate and the new tax rate.
AB481,8,16
14(3) Administration. Sections 71.74 (1), (2), (10), (11), (13) and (14), 71.75 (4)
15to (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
16(1) (a) and (c) and (2) to (7), 71.92, 73.01, 73.015 and 73.0301 apply to this section.
AB481,9,2
17(4) Late filing fee. Any person who fails to file a tobacco products inventory
18tax return when due shall pay a late filing fee of $50. A return that is mailed is timely
19if it is mailed in a properly addressed envelope with postage prepaid, if the envelope
20is postmarked, or marked or recorded electronically as provided under section
7502 21(f) (2) (c) of the Internal Revenue Code, on the due date and if the return is actually
22received by the department or at the destination that the department prescribes
23within 5 days of the due date. A return that is not mailed is timely if it is received
24on or before the due date by the department or at the destination that the department
1prescribes. For purposes of this subsection, "mailed" includes delivery by a delivery
2service designated under section
7502 (f) of the Internal Revenue Code.
AB481,9,6
3(5) Interest on delinquent payments. If any person does not timely pay the
4tax imposed under this section, that person is liable for interest at the rate of 2
5percent per month or fraction of a month from the date on which the tax is due until
6the date when the tax is paid.
AB481,9,9
7(6) Penalty. If any person who is liable for the tax under this section files a false
8or fraudulent return, that person is also liable, in addition to the tax due, for an
9amount equal to the amount of tax the person evaded or attempted to evade.
AB481,13
10Section
13. 139.78 (1) of the statutes is amended to read:
AB481,9,1911
139.78
(1) A Except as provided in sub. (3m), a tax is imposed upon the use or
12storage by consumers of tobacco products in this state at the rate, for tobacco
13products, not including moist snuff, of
71 84 percent of the cost of the tobacco products
14and, for moist snuff, at the rate of 100 percent of the manufacturer's established list
15price to distributors without diminution by volume or other discounts on domestic
16products.
The tax imposed under this subsection on cigars shall not exceed an
17amount equal to 50 cents for each cigar. The tax does not apply if the tax imposed
18by s. 139.76 (1) on the tobacco products has been paid or if the tobacco products are
19exempt from the tobacco products tax under s. 139.76 (2).
AB481,14
20Section
14. 139.78 (2) of the statutes is amended to read:
AB481,9,2521
139.78
(2) On or before the 15th day of each month, every consumer who during
22the preceding month has acquired title to or possession for use or storage in this state
23of tobacco products upon which the tax imposed by s. 139.76 (1)
and (3) has not been
24paid shall file a return showing the quantity of tobacco products acquired. At the
25time when the return is filed, the consumer shall pay the tax.
AB481,15
1Section
15. 139.78 (3m) of the statutes is created to read:
AB481,10,52
139.78
(3m) Beginning on the effective date of this subsection .... [LRB inserts
3date], a person who is subject to the tax imposed under sub. (1) shall pay the greater
4of the amount determined under sub. (1) or the amount determined under s. 139.76
5(3).
AB481,16
6Section
16. 139.803 (intro.) of the statutes is amended to read:
AB481,10,11
7139.803 Refunds to Indian tribes. (intro.) The department may refund the
8taxes collected under s. 139.76 (1)
and (3) in respect to sales on reservations or trust
9lands of an Indian tribe to the tribal council of the tribe having jurisdiction over the
10reservation or trust land on which the sale is made only if all of the following
11conditions are fulfilled:
AB481,17
12Section
17. 139.805 of the statutes is amended to read:
AB481,10,20
13139.805 Agreements with Indian tribes. The department may enter into
14agreements with Indian tribes to provide for the refunding of the tobacco products
15tax imposed under s. 139.76 (1)
and (3). If the department enters into an agreement
16with an Indian tribe, the agreement may provide for refunding 100% of that tax on
17tobacco products sold on the tribal reservation to enrolled members of the tribe
18residing on the tribal reservation and may provide for refunding 50% of that tax on
19tobacco products sold on the tribal reservation to persons who are not enrolled
20members of the tribe residing on the tribal reservation.
AB481,18
21Section
18. 139.82 (8) of the statutes is amended to read:
AB481,10,2422
139.82
(8) Each distributor shall collect and remit the excise tax imposed by
23s. 139.76 (1)
and (3) on tobacco products not exempt from the tobacco products tax
24under s. 139.76 (2), with the reports required to be filed under this section.
AB481,19
25Section
19.
Nonstatutory provisions.
AB481,11,7
1(1)
Tobacco products inventory tax. Any person who is in possession of
2tobacco products in inventory for sale or resale on the effective date of this subsection
3is subject to the tobacco products inventory tax imposed under section 139.761 of the
4statutes, as created by this act, based on the difference between the prior tax rate
5imposed under section 139.76 (1) of the statutes and the new tax rates imposed under
6section 139.76 (1), 2011 stats., as affected by this act, and section 139.76 (3) of the
7statutes, as created by this act.
AB481,11,158
(2)
Cigarette inventory tax. Any person who is in possession of tobacco
9products in inventory for sale or resale on the effective date of this subsection is
10subject to the cigarette inventory tax imposed under section 139.315 of the statutes
11for any such tobacco products that are considered cigarettes under section 139.30
12(1m) of the statutes, as affected by this act. The calculation of the cigarette inventory
13tax is based on the difference between the tax rate imposed under section 139.76 (1)
14of the statutes, as affected by this act, and the tax rate imposed under section 139.31
15(1) of the statutes.
AB481,20
16Section
20.
Effective dates. This act takes effect on the day after publication,
17except as follows:
AB481,11,2118
(1)
The treatment of sections 73.01 (4) (a), 139.30 (1m), 139.75 (4b), (5d), (9n),
19(12), and (14), 139.76 (1) and (3), 139.761, 139.78 (1), (2), and (3m), 139.803 (intro.),
20139.805, and 139.82 (8) of the statutes takes effect on the first day of the 3rd month
21beginning after publication.
AB481,11,2322
(2)
The treatment of section 134.66 (2) (f) and (4) (a) 1. of the statutes takes
23effect on the first day of the 7th month beginning after publication.
