AB250: Bill Text

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.

Because this bill creates a new crime or revises a penalty for an existing crime, the Joint Review Committee on Criminal Penalties may be requested to prepare a report.

For further information see the state and local 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:

AB250,1 Section 1. 71.78 (1) of the statutes is amended to read:

AB250,6,19 71.78 (1) Divulging information. Except as provided in subs. (1g), (4), (4m) and (10), no person may divulge or circulate or offer to obtain, divulge, or circulate any information derived from an income, franchise, withholding, fiduciary, partnership, or limited liability company tax return or tax credit claim, including information which may be furnished by the department as provided in this section. This subsection does not prohibit publication by any newspaper of information lawfully derived from such returns or claims for purposes of argument or prohibit any public speaker from referring to such information in any address. This subsection does not prohibit the department from publishing statistics classified so as not to disclose the identity of particular returns, or claims or reports and the items thereof. This subsection does not prohibit employees or agents of the department of revenue from offering or submitting any return, including joint returns of a spouse or former spouse, separate returns of a spouse, individual returns of a spouse or former spouse, and combined individual income tax returns, or from offering or submitting any claim, schedule, exhibit, writing, or audit report or a copy of, and any information derived from, any of those documents as evidence into the record of any contested matter involving the department in proceedings or litigation on state tax matters if, in the department's judgment, that evidence has reasonable probative value.

AB250,2 Section 2. 71.78 (1g) of the statutes is created to read:

AB250,7,6 71.78 (1g) Permissible disclosure by department employees. An employee of the department may, in connection with the employee's official duties, disclose information derived from a return or claim specified in sub. (1) to the extent that the disclosure is necessary for the enforcement of the tax laws of this state. The disclosure shall be limited to the information relevant to a particular matter in connection with an audit, collection, inspection, or investigation.

AB250,3 Section 3. 71.78 (4) (b) of the statutes is amended to read:

AB250,7,13 71.78 (4) (b) The attorney general and department of justice employees. A department of justice employee may, in connection with the employee's official duties, disclose information derived under this paragraph to a law enforcement investigator participating in a department of justice investigation. The disclosure shall be limited to the information relevant to a particular matter in connection with the department of justice investigation.

AB250,4 Section 4. 71.78 (4) (v) of the statutes is created to read:

AB250,7,16 71.78 (4) (v) A federal grand jury or grand jury of this state, upon receipt by the department of a grand jury subpoena.

AB250,5 Section 5. 71.78 (5) of the statutes is amended to read:

AB250,7,22 71.78 (5) Agreement with department. Copies of returns and claims specified in sub. (1) and related schedules, exhibits, writings or audit reports shall not be furnished to the persons listed under sub. (4), except persons under sub. (4) (e), (k), (n), (o) and, (q), and (v) or under an agreement between the department of revenue and another agency of government.

AB250,6 Section 6. 71.78 (6) of the statutes is amended to read:

AB250,8,4 71.78 (6) Restriction on use of information. The use of information obtained under sub. (4) or (5) is restricted to the discharge of duties imposed upon the persons by law or by the duties of their office or by order of a court as provided under sub. (4) (f) or (v).

AB250,7 Section 7. 71.83 (6) of the statutes is created to read:

AB250,8,7 71.83 (6) Automated sales suppression devices and phantomware. (a) Definitions. In this subsection:

AB250,8,10 1. “Automated sales suppression device" means a software program that falsifies the electronic records, including transaction data and transaction reports, of electronic cash registers and other point-of-sale systems.

AB250,8,14 2. “Electronic cash register" means a device that keeps a register or supporting documents by means of an electronic device or computer system designed to record transaction data for the purpose of computing, compiling, or processing retail sales transaction data or transaction reports.

AB250,8,20 3. “Phantomware" means 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 that may or may not be preserved in digital formats to represent the true or manipulated record of transactions in the electronic cash register.

AB250,9,2 4. “Transaction data" includes items purchased by a customer, the price for each item, a taxability determination for each item, a segregated tax amount for each of the taxed items, the amount of cash or credit tendered, the net amount returned to the customer in change, the date and time of the purchase, the name, address, and identification number of the vendor, and the receipt or invoice number of the transaction.

AB250,9,6 5. “Transaction report" means a report that includes the sales, taxes collected, media totals, and discount voids at an electronic cash register that is printed on cash register tape at the end of a day or shift or a report documenting every action at an electronic cash register that is stored electronically.

AB250,9,10 (b) Automated sales suppression devices and phantomware. 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.

AB250,8 Section 8. 72.06 of the statutes is amended to read:

AB250,9,15 72.06 Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m. apply to any information obtained from any person by the department on a death tax return, report, schedule, exhibit or other document or from an audit report pertaining to the tax return.

AB250,9 Section 9. 73.03 (51b) of the statutes is created to read:

AB250,9,18 73.03 (51b) To revoke all permits, licenses, and certificates that the department has issued to a person for up to 10 years for violating s. 71.83 (6) (b).

AB250,10 Section 10. 77.61 (5) (am) of the statutes is created to read:

AB250,9,25 77.61 (5) (am) Notwithstanding par. (a), an employee of the department may, in connection with the employee's official duties, disclose information derived from a return specified in par. (a) to the extent that the disclosure is necessary for the enforcement of the tax laws of this state. The disclosure shall be limited to the information relevant to a particular matter in connection with an audit, collection, inspection, or investigation.

AB250,11 Section 11. 77.61 (5) (b) 2. of the statutes is amended to read:

AB250,10,7 77.61 (5) (b) 2. The attorney general and department of justice employees. A department of justice employee may, in connection with the employee's official duties, disclose information derived under this subdivision to a law enforcement investigator participating in a department of justice investigation. The disclosure shall be limited to the information relevant to a particular matter in connection with the department of justice investigation.

AB250,12 Section 12. 77.61 (5) (b) 15. of the statutes is created to read:

AB250,10,10 77.61 (5) (b) 15. A federal grand jury or grand jury of this state, upon receipt by the department of a grand jury subpoena.

AB250,13 Section 13. 77.61 (5) (c) of the statutes is amended to read:

AB250,10,15 77.61 (5) (c) Copies of sales tax or use tax returns, schedules, exhibits, writings or audit reports shall not be furnished to the persons listed under par. (b), except persons under par. (b) 5. or 15. or under an agreement between the department and another agency of government.