Chapter ATCP 105

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) (b) The sales allocation factor applies to the following expenses:

ATCP 105.07(1)(b)1. 1. Bad debts.

ATCP 105.07(1)(b)2. 2. Data processing.

ATCP 105.07(1)(b)3. 3. Depreciation on buildings, except as allocated under sub. (2) (b) 1.

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)5. 5. Depreciation on office equipment.

ATCP 105.07(1)(b)6. 6. Non-delivery vehicles.

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)8. 8. Miscellaneous expenses.

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(1)(b)10. 10. Insurance, except as allocated under subd. 9. and subs. (2) (b) 6. and (3) (b) 2. b.

ATCP 105.07(1)(b)11. 11. Interest, except as allocated under sub. (2) (b) 7.

ATCP 105.07(1)(b)12. 12. Office expenses and supplies.

ATCP 105.07(1)(b)13. 13. Professional fees, except as allocated under sub. (2) (b) 12.

ATCP 105.07(1)(b)14. 14. Promotion and advertising.

ATCP 105.07(1)(b)15. 15. Retirement and employee welfare.

ATCP 105.07(1)(b)16. 16. Salaries, fringe benefits, and other remuneration, including officers’ salaries and payroll taxes, except as allocated under subs. (2) (b) 13. and (3) (b) 1. and 2. a.

ATCP 105.07(1)(b)17. 17. Telephone.

ATCP 105.07(1)(b)18. 18. Rent and real estate taxes, except as allocated under sub. (2) (b) 8.

ATCP 105.07(2) (2) Warehouse space allocation.

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) (b) The space allocation factor applies to the following expenses:

ATCP 105.07(2)(b)1. 1. Depreciation on warehouse buildings.

ATCP 105.07(2)(b)2. 2. Depreciation on lease improvements on warehouses.

ATCP 105.07(2)(b)3. 3. Depreciation on warehouse equipment.

ATCP 105.07(2)(b)4. 4. Warehouse equipment rental.

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)6. 6. Insurance on warehouse equipment and buildings.

ATCP 105.07(2)(b)7. 7. Interest on real estate.

ATCP 105.07(2)(b)8. 8. Warehouse rent and warehouse property taxes.

ATCP 105.07(2)(b)9. 9. Repairs, maintenance, and groundskeeping.

ATCP 105.07(2)(b)10. 10. Garbage pickup.

ATCP 105.07(2)(b)11. 11. Security.

ATCP 105.07(2)(b)12. 12. Fees of professionals whose work is principally associated with the wholesaler’s warehouses.

ATCP 105.07(2)(b)13. 13. Salaries, fringe benefits, and other remuneration of warehouse employees.

ATCP 105.07(2)(b)14. 14. Warehouse supplies.

ATCP 105.07(3) (3) Delivery vehicle space allocation.

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(3)(b)2. 2. Garage expenses for the housing and maintenance of vehicles, including:

ATCP 105.07(3)(b)2.a. a. Salaries, fringe benefits, and other remuneration of garage employees.

ATCP 105.07(3)(b)2.b. b. Depreciation and insurance on garage equipment.

ATCP 105.07(3)(b)2.c. c. Noncapitalized expendable tools.

ATCP 105.07(3)(b)2.d. d. Garage supplies.

ATCP 105.07(3)(b)2.e. e. Purchased parts.

ATCP 105.07(3)(b)2.f. f. Purchased repairs to vehicles.

ATCP 105.07(3)(b)3. 3. Gas, oil, tires and licenses.

ATCP 105.07(3)(b)4. 4. Delivery vehicle insurance and depreciation.

ATCP 105.07(3)(b)5. 5. Delivery vehicle lease payments.

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 History History: 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 105.08 ATCP 105.08 Application of discounts and allowances.

ATCP 105.08(1) (1) Definitions. In this section:

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 Note Note: 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 History History: Cr. Register, October, 1988, No. 394, eff. 11-1-88.

ATCP 105.09 ATCP 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 History History: Cr. Register, October, 1988, No. 394, eff. 11-1-88.

ATCP 105.10 ATCP 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 Note Note: 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 History History: Cr. Register, October, 1988, No. 394, eff. 11-1-88; am. Register, August, 1990, No. 416, eff. 9-1-90.

subch. III of ch. ATCP 105 Subchapter III — Motor Fuel Pricing

ATCP 105.21 ATCP 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 Note Note: 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 History History: 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 105.22 ATCP 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 History History: Cr., Register, May, 1999, No. 521, eff. 6-1-99.

ATCP 105.23 ATCP 105.23 Notice of price offered to meet competition. Except as provided in s. ATCP 105.009 (5) (c):

ATCP 105.23(1) (1) Time of notice. A person who purports to justify a motor fuel selling price by giving notice to the department under s. 100.30 (7), Stats., shall send that notice on the same day that the person lowers the price of motor fuel to that price. The person shall send the notice before the actual close of the person’s motor fuel selling business at the relevant location on that day or, if that business remains open for 24 hours a day, before the time at which the business day ends for accounting purposes.

ATCP 105.23 Note Note: Section 100.30 (7), Stats., only requires sellers of motor vehicle fuel to file a notice on the day that they lower their price to meet a competitor’s price. It is not necessary for a seller to provide notice on a day they did not change their price, even if they are selling motor vehicle fuel below cost in order to meet competition. The department recommends that sellers maintain daily price surveys [see s. ATCP 105.009 (3)], especially for days that they are selling motor vehicle fuel below cost, as defined in s. 100.30 (2), Stats.