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LRB-2446/1
JK/AG/EL/MP/EW:kjf
2021 - 2022 LEGISLATURE
April 8, 2021 - Introduced by Representatives Spiros, Drake, Moses, Skowronski,
Baldeh, Emerson, Goyke, Haywood, Macco, Vruwink, McGuire, Wittke and
Conley, cosponsored by Senators Wanggaard and L. Taylor. Referred to
Committee on State Affairs.
AB250,1,10 1An Act to renumber and amend 134.65 (1m); to amend 71.78 (1), 71.78 (4) (b),
271.78 (5), 71.78 (6), 72.06, 77.61 (5) (b) 2., 77.61 (5) (c), 77.61 (5) (d), 78.80 (3),
3125.04 (4), 139.11 (4) (a) (intro.), 139.38 (6), 139.44 (2), 139.44 (8) (a), (b) and (c),
4139.82 (6), 227.52 (1), 565.17 (5) (a), 565.50 (2), 565.50 (3) and 946.82 (4); and
5to create 71.78 (1g), 71.78 (4) (v), 71.83 (6), 73.03 (51b), 77.61 (5) (am), 77.61
6(5) (b) 15., 125.02 (1c), 125.04 (8m), 125.09 (8), 125.09 (9), 125.112, 125.12 (7),
7134.65 (1g), 134.65 (1m) (a) 1., 2. and 3., 134.65 (1m) (b), 134.65 (2m), 134.65
8(3m), 139.44 (2m), 139.44 (8) (d), 227.43 (1) (bt), 227.43 (3) (bt), 227.43 (4) (bt),
9565.17 (5) (d) and 565.50 (4) of the statutes; relating to: Department of
10Revenue enforcement and providing a 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
10 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; the applicant has submitted the proof required by DOR under
current law relating to the collection of sales and use tax; and the applicant is at least
18 years old. 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
Internet site.
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.
Forfeitures for alcohol beverage violations
The bill creates an administrative procedure under which DOR may assess and
collect administrative forfeitures for alcohol beverage violations.
Current law provides as a general penalty for violating the state's alcohol
beverage laws a fine of not more than $1,000 or imprisonment for not more than 90
days, or both, if no specific penalty is provided. However, certain violations are
subject to specific penalties, which depending on the violation may be a forfeiture (a
civil penalty) or may be a fine (a criminal penalty) or imprisonment. Each such
penalty is enforced by means of a court proceeding.
Also under current law, DOR may institute an administrative proceeding to
suspend or revoke an alcohol beverage permit issued by DOR and may institute a
court proceeding to suspend or revoke an alcohol beverage license issued by a
municipality.

The bill authorizes DOR to directly assess against a person specified forfeitures
for specified violations of the alcohol beverage laws. If DOR determines that a
forfeiture should be assessed, DOR must issue a notice of assessment (citation) to the
person that includes the amount of the forfeiture and the alleged violation and
informs the person of the person's right to a hearing. The person issued the citation
may contest the assessment by means of a hearing before the Division of Hearings
and Appeals in the Department of Administration. DOR has authority to settle the
matter after issuing the citation, but only in an amount that is at least the minimum
statutory forfeiture amount for the alleged violation.
Publishing a list of retail licenses
The bill requires DOR to publish a list of retail licensees on DOR's Internet site.
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 Internet site.
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 for the
enforcement of Wisconsin's tax laws. The disclosure must be limited to the
information relevant to a particular matter in connection with an audit, collection,
inspection, or investigation.
The bill authorizes DOJ employees to disclose, in connection with their official
duties, the tax return information they are authorized to access under current law
to a law enforcement investigator participating in a DOJ investigation. The
disclosure must be limited to the information relevant to a particular matter in
connection with the 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.
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.
Finally, 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.
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 vapor products.
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 3,000 cigarettes may be
fined not more than $1,000 or imprisoned for not more than one year, or both.
2. A person who unlawfully possesses more than 3,000 cigarettes but no more
than 5,000 cigarettes is guilty of a Class I felony.
3. A person who unlawfully possesses more than 5,000 cigarettes but no more
than 10,000 cigarettes is guilty of a Class H felony.
4. 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 refuses to issue, refuses to renew, or revokes an
alcohol beverages permit, the applicant or permit holder may not reapply to DOR for
the permit for a period of 12 months.
Possession of a still
The bill generally prohibits a person from possessing a still or other apparatus
for manufacturing, rectifying, distilling, refining, or purifying intoxicating liquor
other than wine. A person who violates this prohibition may be fined not more than
$10,000 or imprisoned for not more than nine months or both. The prohibition does
not apply to a person that holds an intoxicating liquor manufacturer's or rectifier's
permit from DOR or that has registered the still or a distilled spirits plant under
federal law.
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 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.
Under the bill, an “automated sales suppression device” is a software program
that falsifies the electronic records of electronic cash registers and other
point-of-sale systems. The bill defines “phantomware” as a programming option
embedded in the operating system of an electronic cash register, or hardwired into
an electronic cash register, that can be used to create a virtual second electronic cash
register or eliminate or manipulate transaction records. Automated sales
suppression devices and phantomware are typically used to evade the payment of
taxes.
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