ATCP 105.07ATCP 105.07 Factors for allocating expenses. Under the average expense allocation method, all expenses incurred in the operation of the business shall be allocated to the sale of cigarettes and other tobacco products using the following methods: ATCP 105.07(1)(a)(a) The expenses listed in par. (b), plus any other expenses incurred in the operation of the business that are not listed elsewhere in this section, shall be allocated according to the percentage that the sale of cigarettes and other tobacco products comprises of total sales. ATCP 105.07(1)(b)4.4. Depreciation on lease improvements on the wholesaler’s general facilities, other than its warehouse. ATCP 105.07(1)(b)7.7. Dues, subscriptions, and licenses. Wholesale cigarette sales permit expenses shall be allocated entirely as overhead associated with the sale of cigarettes and other tobacco products. No permit or license expenses required to sell other specific commodities may be allocated to the sale of cigarettes and other tobacco products. ATCP 105.07(1)(b)9.9. Insurance on inventory. If a wholesaler’s inventory insurance is based on the value of inventory these expenses may be allocated based on the percentage that cigarettes and other tobacco product inventory value comprises of total inventory value, rather than on sales. The inventory valuation reports required by the insurer shall be used as the basis of allocation according to inventory value. ATCP 105.07(2)(a)(a) The expenses listed in par. (b) shall be allocated according to the percentage that the cubic feet of warehouse space used to store cigarettes and other tobacco products comprises of total warehouse space used for the storage of goods for sale. All other space in the warehouse shall be excluded from this percentage calculation, although expenses associated with this space shall be allocated. ATCP 105.07(2)(b)5.5. Heat, light, power, and water. If any of these items is separately metered for warehouse areas not serving cigarettes and other tobacco products, such as freezers or coolers, these expenses may not be allocated to the sale of cigarettes and other tobacco products. If any of these items is separately metered for warehouse areas serving only cigarettes and other tobacco products, such as humidity-controlled rooms, these expenses shall be allocated entirely to the sale of cigarettes and other tobacco products. ATCP 105.07(2)(b)12.12. Fees of professionals whose work is principally associated with the wholesaler’s warehouses. ATCP 105.07(3)(a)(a) The expenses listed in par. (b) shall be allocated according to the percentage that the cubic feet of space in vehicles used for transporting cigarettes and other tobacco products comprises of total space used for the transportation of goods in delivery vehicles. All other space in the delivery vehicles shall be excluded from this percentage calculation, although expenses associated with this space shall be allocated. ATCP 105.07(3)(b)(b) The delivery vehicle space allocation factor applies to the following expenses: ATCP 105.07(3)(b)1.1. Salaries, fringe benefits, and other remunerations of delivery vehicle drivers. ATCP 105.07(4)(4) Direct assignment of expenses. Upon approval of the department, a wholesaler that maintains sufficient sub-records may assign expenses directly to cigarettes and other tobacco products instead of using the indirect allocation methods listed in this section. ATCP 105.07 HistoryHistory: Cr. Register, October, 1988, No. 394, eff. 11-1-88; correction in (1) (b) 16. made under s. 13.93 (2m) (b) 6., Stats., Register October 2004 No. 586; CR 06-028: am. (1) (b) 16. Register November 2006 No. 611, eff. 12-1-06. ATCP 105.08ATCP 105.08 Application of discounts and allowances. ATCP 105.08(1)(a)(a) “Allowance” means a manufacturer’s payment of consideration to a wholesaler who, in exchange, performs some service for or provides something of value to the manufacturer. “Allowance” includes advertising allowances, customary discounts for cash payment, and manufacturer’s hand stamping allowances. ATCP 105.08(1)(b)(b) “Consideration” means something of value in any form, including adjustments a manufacturer makes to the list price of cigarettes and other tobacco products and an offer of other goods for free or at reduced prices. ATCP 105.08(1)(c)(c) “Manufacturer’s discount” includes any trade discount and any allowance. ATCP 105.08(1)(d)(d) “Trade discount” means a manufacturer’s payment of consideration to a wholesaler to account for differences in the cost of manufacture, sale, or delivery resulting from differing methods or quantities in which the manufacturer’s cigarettes or other tobacco products are sold or delivered to the wholesaler. “Trade discount” does not include allowances. ATCP 105.08 NoteNote: State v. Eau Claire Oil, 35 Wis. 2d 724 (1967), 63 OAG 516 (1974) and 72 OAG 126 (1983) all provide definitions of trade discounts and allowances under s. 100.30, Stats. Section 100.30, Stats., uses the terms “trade discount” and “manufacturer’s discount” more loosely than they are defined in these rules. As a result, the definitions of “trade discount” and “manufacturer’s discount” in these rules may not be appropriate in interpreting these phrases where they appear in the statute. ATCP 105.08(2)(2) Jobber’s application of discounts and allowances. The following provisions interpret s. 100.30 (2) (c) 1. a., Stats., regarding the proper accounting treatment of trade discounts and allowances by cigarette jobbers: ATCP 105.08(2)(a)(a) All trade discounts may be used to reduce the cost of merchandise to the jobber. ATCP 105.08(2)(b)(b) To the extent provided under this paragraph, allowances may be deducted from the jobber’s cost of doing business. Each allowance so used shall offset expenses incurred when performing the service or providing the item of value; customary discounts for cash payment shall offset interest expenses and other bank charges. These offsets may not exceed the amount of expense incurred for performing the service or providing the item of value that is allocated to cigarettes and other tobacco products. ATCP 105.08(3)(3) Distributors’ application of discounts and allowances. The following provisions interpret s. 100.30 (2) (c) 1. b., Stats., regarding the proper accounting treatment of trade discounts, manufacturer’s discounts, and allowances by cigarette distributors holding permits under s. 139.30 (3), Stats.: ATCP 105.08(3)(a)(a) Neither the state stamping discount under s. 139.32 (5), Stats., nor any manufacturer’s discount may be used to reduce the cost of merchandise to the cigarette distributor. ATCP 105.08(3)(b)(b) To the extent provided under this paragraph, allowances and the state stamping discount under s. 139.32 (5), Stats., may be deducted from the cost of doing business. If an allowance or the state stamping discount is so used it shall offset expenses incurred when performing the service or providing the item of value; customary discounts for cash payment shall offset interest expenses and other bank charges. These offsets may not exceed the amount of expense incurred for performing the service or providing the item of value that is allocated to cigarettes and other tobacco products. ATCP 105.08 HistoryHistory: Cr. Register, October, 1988, No. 394, eff. 11-1-88. ATCP 105.09ATCP 105.09 Specific expense allocation. In lieu of using the average expense allocation method specified in ss. ATCP 105.06 and 105.07, a wholesaler may prove a lesser cost of doing business using its own specific allocation method. An independent certified public accountant shall attest that the method is appropriate for complying with the purposes of s. 100.30, Stats., and the wholesaler shall support its allocation of expenses with a time and motion study. The certified public accountant’s attestation is not binding on the department and any wholesaler’s specific allocation method is subject to the department’s review and approval under s. ATCP 105.03 (2). ATCP 105.09 HistoryHistory: Cr. Register, October, 1988, No. 394, eff. 11-1-88. ATCP 105.10ATCP 105.10 Applicability. This subchapter applies to any offer to sell or sale of cigarettes and other tobacco products occurring on or after November 1, 1988. ATCP 105.10 NoteNote: References in this chapter to “sell”, “sale,” and “sold” include offers to sell. See s. 100.30 (2) (g), Stats., for the complete definition of these words. ATCP 105.10 HistoryHistory: Cr. Register, October, 1988, No. 394, eff. 11-1-88; am. Register, August, 1990, No. 416, eff. 9-1-90. ATCP 105.21ATCP 105.21 Calculating cost of motor fuel. For the purpose of calculating the cost of motor fuel under s. 100.30, Stats., the following terms have the following meanings: ATCP 105.21(1)(1) “At the close of business on the determination date,” as used in s. 100.30 (2) (a), Stats., means the time at which the petroleum price reporting service no longer posts new price data. ATCP 105.21 NoteNote: As of May, 1998, this time was 4:00 p.m. eastern time for the largest petroleum price reporting service.
ATCP 105.21(2)(2) “Cost of doing business” means the allocation of all costs of a seller related to sales of motor vehicle fuel meeting all of the following requirements. ATCP 105.21(2)(a)(a) Operating costs are allocated between sales of motor vehicle fuel and sales of all other products. ATCP 105.21(2)(b)(b) Cost allocations are based on overall average sales of motor vehicle fuel. ATCP 105.21(2)(c)(c) Marginal costs or decreasing costs for each additional gallon of fuel sold are excluded in calculating the cost of doing business. ATCP 105.21(3)(3) “Terminal located closest to the retail station” or “terminal located closest to the retailer,” as used in s. 100.30 (2), Stats., means the closest terminal based on straight line distance, not road distance. ATCP 105.21 HistoryHistory: Cr., Register, May, 1999, No. 521, eff. 6-1-99; correction in (3) made under s. 35.17, Stats., Register May 2024 No. 821. ATCP 105.22ATCP 105.22 Unavailability of average posted terminal price for fuel sold. When calculating “cost to retailer” under s. 100.30 (2) (am) 1m., Stats., if an average posted terminal price for the specific grade of motor vehicle fuel sold by a retailer or retail station is unavailable from the terminal located closest to the seller, the seller shall use one of the following: ATCP 105.22(1)(1) The average posted terminal price at the next closest terminal that is based upon the prices of 3 or more suppliers for the same grade of motor vehicle fuel sold, as required under s. 100.30 (2) (j), Stats. ATCP 105.22(2)(2) The average posted terminal price at the closest terminal for a fuel which is most nearly similar in terms of octane rating and content to the motor vehicle fuel sold. ATCP 105.22 HistoryHistory: Cr., Register, May, 1999, No. 521, eff. 6-1-99.
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