Wisconsin Legislature: EmR2419 Rule Text

The statement of scope for this rule, SS 009-24, was approved by the Governor on January 18, 2024, published in Register No. 813A3 on February 19, 2024, and approved by the Secretary of Revenue on March 7, 2024. This emergency rule was approved by the Governor on December 6, 2024.

FINDING OF EMERGENCY

2023 Wisconsin Act 73 is a complex and detailed change to alcohol beverage regulations not seen since 2011. The Act touches all tiers of the alcohol beverage industry. Many provisions impact both existing and new businesses. Many provisions of the Act have already come into effect and additional significant provisions come into effect on January 1, 2025. Due to the legislative review schedule, impact to existing businesses, and short time horizon for implementation of some items, emergency rulemaking is necessary to preserve public peace, health, safety, and welfare and to ensure tax compliance and regulatory fairness in the alcohol beverage industry.

ANALYSIS

Statutes interpreted: chs. 125 and 139, Stats.

Statutory authority: ss. 125.03 (1) (a), 139.08 (2), and 227.11 (2), Stats.

Explanation of agency authority:

Section 125.03 (1) (a), Stats., provides statutory rule-making authority as follows:

(a) The department, in furtherance of effective control, may promulgate rules consistent with this chapter and ch. 139.

2023 Wisconsin Act 73 amended sec. 125.03 (1) (a), Stats., above, effective March 1, 2024, as follows:

(a) The division may promulgate rules consistent with this chapter and ch. 139 to carry out the division's duties under this chapter.

Section 139.08 (2), Stats, provides statutory rule-making authority as follows:

(2) RULES. The secretary of revenue shall adopt rules necessary to carry out the secretary's duties under this chapter.

Section 227.11 (2), Stats., provides statutory rule-making authority as follows:

(a) "Each agency may promulgate rules interpreting the provisions of any statute enforced or administered by the agency, if the agency considers it necessary to effectuate the purpose of the statute...”

(c) "Each agency authorized to exercise discretion in deciding individual cases may formalize the general policies evolving from its decisions by promulgating the policies as rules …"

Related statute or rule: There are no other applicable statutes or rules.

Plain language analysis:

Structure: Under the current Wisconsin Administrative Code, Chapter Tax 7 contains all rules relating to the taxation and regulation of fermented malt beverages, and Chapter Tax 8 contains all rules relating to taxation and regulation of intoxicating liquor. This emergency rule separates the taxation and regulation of all alcohol beverages, regardless of type, due to the regulation and enforcement of alcohol beverages under ch. 125, Stats, occurring under the newly created Division of Alcohol Beverages pursuant to 2023 Act 73. The recreated Chapter Tax 7 in this emergency rule primarily relates to the regulation of alcohol beverages under ch. 125, Stats. and is promulgated and enforced by the Division of Alcohol Beverages. The recreated Chapter Tax 8 in this emergency rule primarily relates to the taxation of alcohol beverages and is promulgated and enforced by the Division of Income, Sales and Excises Taxes within the Department of Revenue. Both recreated chapters generally follow the structure and flow of information found in chapters 125 and 139 of the Wisconsin Statutes.

Removal of outdated and superseded rules: Several provisions of Tax 7 and 8 were outdated, superseded by 2023 Act 73, or redundant to rules or statute. Sections Tax 8.35, 8.61, and 8.66 have not been incorporated into this rule order.

New rules relating to alcohol beverage regulation: The following provisions of Tax 7 are new:

Tax 7.01 Authority and Purpose cites the statutory authority for the chapter and outlines the responsibilities of the Division of Alcohol Beverages.

Tax 7.03 Background check fees describes the purpose for background checks for alcohol beverage permit applicants and which members of the applicant business are subject to criminal history checks. Authority for the Division of Alcohol Beverages to charge these fees was granted in s. 125.04(8m), Stats.

Tax 7.04 Permits and fees outlines expiration dates and amounts of permit fees for all alcohol beverage permits issued by the Division of Alcohol Beverages and when an application fee may be refunded.

Tax 7.06 Responsible beverage server training course standards establishes requirements that alcohol beverage server training courses must meet to be approved. This codifies the department's long-standing guidance into administrative code.

Tax 7.11 Operators' permits establishes the expiration date and application process for operator's permits issued by the Division of Alcohol Beverages.

Tax 7.12 Alcohol beverage warehouse standards establishes long-standing department practice for regulation of alcohol beverage warehouse permittees including who may hold the permit, authorized activities under the permit, and requirements of the premises.

Tax 7.13 Permissible interests provides definitions and processes necessary to administer s. 125.20, Stats, created in 2023 Wisconsin Act 73.

Tax 7.14 Production agreements provides clarification for producers engaging in production agreements under s. 125.21, Stats., including requirements for disclosure of agreements to the Division of Alcohol Beverages and examples for tax payment and reporting requirements specifically relating to contract production agreements with out-of-state recipe suppliers.

7.15 Common carrier permit; shipments into state clarifies that common carrier permits may be issued to one entity for multiple locations and requires that the monthly report be filed electronically.