Chapter Tax 61

Tax 61.085(4)(c)4. 4. A statement of how much funding may be made available for payment under the plan, not to exceed $300,000 per short-term incentive.

Tax 61.085(4)(c)5. 5. A detailed explanation of how the incentive is calculated, to be consistent with other aspects of the RPP where appropriate.

Tax 61.085(4)(c)6. 6. A detailed explanation of how incentive payments will be made, and that payments shall be made no later than the last Thursday of the month following the last day of the sales quarter in which the short-term incentive ends. If payment is made in merchandise or lottery product, the explanation will include information about the merchandise or lottery product.

Tax 61.085(4)(c)7. 7. Any other features or procedures determined by the administrator to be appropriate.

Tax 61.085(4)(d) (d) Merchandise as payment. If merchandise is used as payment, all of the following conditions must be met:

Tax 61.085(4)(d)1. 1. The lottery may spend up to 10% of the funding available for the RPP, under s. 565.02 (4) (g), Stats., for merchandise or lottery product per fiscal year.

Tax 61.085(4)(d)2. 2. The lottery shall procure appropriate merchandise, merchandise fulfillment or inventory control for the implementation of short-term incentives by conducting procurement activities under s. 565.25, Stats. The lottery shall properly account for lottery product used in a short-term incentive.

Tax 61.085(4)(d)3. 3. The lottery shall provide for the appropriate control of the merchandise or lottery product, including provisions for inventory and physical security where necessary.

Tax 61.085(5) (5) Qualification for product types.

Tax 61.085(5)(a) (a) To qualify annual sales goals incentives under sub. (4) (b) 2., jackpot terminal-generated sales product type, a retail location shall have a comparable history fiscal year as defined under sub. (2) (b).

Tax 61.085(5)(am) (am) If no appropriate sales history can be determined, the retail location may not be considered qualified for annual incentives for that product type. The administrator shall review qualification under each product type no less often than yearly, so that retail locations that become qualified may be included for incentive payments as soon as possible.

Tax 61.085(5)(b) (b) To qualify for quarterly sales goals incentives under sub. (4) (b) 1., a retail location shall meet the qualification criteria for that product type. Each product type shall be reviewed separately to determine if an appropriate quarterly sales history as defined under sub. (2) (a) is available to satisfy the criteria. The criteria are as follows:

Tax 61.085(5)(b)1. 1. For a retail location, if there is comparable history quarter sales data as defined under sub. (2) (c), the retailer shall be considered qualified for that product type.

Tax 61.085(5)(b)2. 2. If no comparable history quarter exists for a retail location, the administrator shall substitute sales history from the immediately previous quarter as defined under sub. (2) (e).

Tax 61.085(5)(b)3. 3. If no appropriate quarterly sales history can be determined, either by using data from a comparable history quarter or from an immediately previous quarter, the retail location may not be considered qualified for quarterly incentives for that product type. The administrator shall review qualification under each product type no less often than quarterly so that retail locations that become qualified may be included for incentive payments as soon as possible.

Tax 61.085(6) (6) Payment of incentives. The RPP incentives shall be paid in the following sequential order:

Tax 61.085(6)(a) (a) Winning Ticket Incentives, under sub. (4) (a).

Tax 61.085(6)(b) (b) Short-Term Incentives, under sub. (4) (c).

Tax 61.085(6)(c) (c) Quarterly Sales Goals Incentives, under sub. (4) (b) 1., where the sequence of product types paid shall be instant ticket sales products, then non-jackpot terminal-generated products.

Tax 61.085(6)(d) (d) Annual Sales Goals Incentives, under sub. (4) (b) 2., where the sequence of product types paid shall be instant ticket sales products, then non-jackpot terminal-generated products, and last jackpot terminal-generated products.

Tax 61.085(6)(e) (e) The RPP incentives shall be paid in the following manner:

Tax 61.085(6)(e)1. 1. The winning ticket incentive shall be paid no later than the last Thursday of the month following the last day of the quarter in which the incentive is earned. This incentive may be paid more frequently if the administrator determines that a more frequent schedule is not prohibitive to the effective operation of Wisconsin lottery activities and does not have a negative impact upon the appropriate funding authority of the program.

Tax 61.085(6)(e)2. 2. The short-term incentive shall be paid no later than the last Thursday of the month following the last day of the quarter in which the incentive is earned. This incentive may be paid more frequently if the administrator determines that a more frequent schedule is not prohibitive to the effective operation of Wisconsin lottery activities and does not have a negative impact upon the appropriate funding authority of the program.

Tax 61.085(6)(e)3. 3. The sales goals quarterly incentive shall be paid no later than the last Thursday of the month following the last day of the quarter in which the incentive is earned. The sales goals incentive may be paid more frequently if the administrator determines that a more frequent schedule is not prohibitive to the effective operation of Wisconsin lottery activities and does not have a negative impact upon the appropriate funding authority of the program.

Tax 61.085(6)(e)4. 4. The annual incentive payments shall be paid no later than the last Thursday of the month following the last day of the fiscal year in which the incentive is earned. Jackpot terminal-generated products shall be paid last of all incentive payments in a fiscal year. This incentive may be paid more frequently if the administrator determines that a more frequent schedule is not prohibitive to the effective operation of Wisconsin lottery activities and does not have a negative impact upon the appropriate funding authority of the program.

Tax 61.085(7) (7) Funding authority. The administrator shall monitor the expenditures of the RPP at least quarterly, to ensure that the funding authority is not exceeded. Prior to the payment of incentives under sub. (4) (b), the administrator may implement a pre-payment adjustment to ensure that funding authority for the RPP is not exceeded, by reducing the payment of incentives earned. Any pre-payment adjustment in any product type shall be implemented as indicated under sub. (4) (b), to limit the incentive paid so that the payments do not exceed the funding available or negatively impact the payment of earned incentives in the other components of the RPP.

Tax 61.085(8) (8) Right to appeal. In the event the administrator terminates the eligibility or qualification of a retailer under the RPP, or in the event the retailer disputes their payments from the RPP, the retailer is entitled to an appeal in accordance with the provisions set forth under s. Tax 61.10.

Tax 61.085(9) (9) Report. The administrator shall document the total payments made to retailers under the RPP. The report shall include a breakdown of any incentives paid under the winning ticket incentive, the sales goals incentive and the short-term incentive. The report shall be available within 90 days of the completion of a fiscal year.

Tax 61.085 Note Note: Section Tax 61.085 interprets ss. 565.02 (4) (g) and 565.10 (14) (b) 3m., Stats.

Tax 61.085 History History: Cr. Register, October, 2000, No. 538, eff. 11-1-00; CR 04-083: cr. (2) (f) and (4) (d), am. (4) (a) 1. and 2., (c) (intro.), 3., 4., 6., and (7) Register April 2005 No. 592, eff. 5-1-2005; CR 04-083: am. (2) (a), (4) (b) (intro.), (5) (a), (b), and (6), renum. (2) (b) to (i), (4) (b) 1. to 3., (6) (a) and (b) to be (2) (c) to (j), (4) (b) 1. a., b., 2. c., and (6) (e) 1. and 3., and am. (2) (h), (4) (b) 1. a., b., 2. c., and (6) (e) 3., cr. (2) (b) and (f), (4) (b) 1. to 3., (5) (am), (6) (a), (b), (d), (e) (intro.), 2. and 4., r. and recr. (6) (c) Register April 2005 No. 592, eff. 7-2-05; CR 07-087: am. (3) (a) and (4) (b) (intro.), r. (4) (a) 2. Register April 2008 No. 628, eff. 5-1-08.

Tax 61.09 Tax 61.09 Limitation on length of suspension. A suspension shall be limited to a maximum of 45 calendar days, during which time the administrator shall consider the appropriate permanent action to be taken, including, but not limited to, termination of the retailer contract.

Tax 61.09 Note Note: Section Tax 61.09 interprets s. 565.12, Stats.

Tax 61.09 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; CR 01-088: am. Register February 2002 No. 554, eff. 3-1-02.

Tax 61.10 Tax 61.10 Appeal procedure.

Tax 61.10(1) (1) The administrator shall give the retailer written notice of the retailer’s terminated contract and state the grounds for the termination. The retailer shall also be notified that a request for a reconsideration must be made by the retailer within 30 calendar days and that the request must contain the information in sub. (2).

Tax 61.10(2) (2) Within 30 calendar days of the mailing of the notice, the retailer may request a reconsideration by filing with the administrator a written statement setting forth the retailer’s legal, factual or equitable arguments and submitting any supporting documents. The request for reconsideration shall be deemed filed on the date it is received by the administrator.

Tax 61.10(3) (3) Within 20 calendar days of receipt of the request for reconsideration, the administrator may, in writing, request the retailer to submit any additional facts, legal and equitable arguments or documents that the administrator deems necessary to make a determination.

Tax 61.10(4) (4) The Wisconsin lottery’s legal counsel shall compile all relevant correspondence, lottery accounting records and all materials submitted to the administrator by the retailer for reconsideration. Legal counsel shall then review the file, research, if necessary, the applicable laws and rules and prepare an analysis and recommendation for the administrator’s consideration.

Tax 61.10(5) (5) The administrator, after considering all the facts and arguments submitted by the retailer, and legal counsel’s recommendation, shall independently evaluate whether to either reinstate or terminate the contract. Within 45 calendar days of the administrator’s receipt of the request for reconsideration or any supplemental information and documentation requested, the administrator shall notify the retailer, in writing, of the determination. If the contract is terminated, the notification shall include a statement setting forth the reasons for the termination and notifying the retailer of the right to a hearing under s. 227.42, Stats. The retailer shall also be notified that a request for a hearing must be made by the retailer within 20 calendar days and that the request must contain the information in sub. (6).

Tax 61.10(6) (6) Within 20 calendar days of the administrator’s mailing of the final determination, the retailer may request, in writing, a hearing under s. 227.42, Stats. A request shall be deemed filed on the date it is received by the administrator. A request for a hearing under s. 227.42, Stats., shall contain all of the following:

Tax 61.10(6)(a) (a) The retailer’s name and address.

Tax 61.10(6)(b) (b) The reasons why a retailer requests a hearing.

Tax 61.10(6)(c) (c) The facts that the retailer intends to prove at the hearing.

Tax 61.10(6)(d) (d) A description of the mistake the retailer believes was made, if the retailer claims that the termination of contract is based on a mistake in fact or in law.

Tax 61.10(6)(e) (e) Any supporting documents not previously submitted to the administrator.

Tax 61.10(7) (7) Within 20 calendar days of receipt of a request for hearing, the administrator shall grant or deny the request for a hearing, in writing, under s. 227.42, Stats. A hearing shall be granted if the criteria under s. 227.42 (1), Stats., are met. The administrator shall reasonably notify the retailer of the time and place of the hearing. The administrator shall inform the retailer, in writing, of the reason for denying a hearing.

Tax 61.10(8) (8) In the event that neither the retailer nor the retailer’s representative appears at the time and place designated for the hearing, the administrator may take action based upon the record as submitted. By failing to appear, the retailer waives any further right to appeal before the Wisconsin lottery.

Tax 61.10 Note Note: Section Tax 61.10 interprets s. 565.12, Stats.

Tax 61.10 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; CR 01-088: am. Register February 2002 No. 554, eff. 3-1-02; CR 07-087: am. (title) and (2) Register April 2008 No. 628, eff. 5-1-08.

Tax 61.25 Tax 61.25 Discretion of enforcement.

Tax 61.25(1) (1) Consistent with s. 227.04, Stats., the lottery shall exercise the following discretion in the enforcement of rules and guidelines against a small business:

Tax 61.25 Note Note: Section 227.04 (2m) (a), Stats., provides that: “Each agency shall promulgate a rule that requires the agency to disclose in advance the discretion that the agency will follow in the enforcement of rules against a small business that has committed a minor violation.” Section 227.04 (1) (a), Stats., defines minor violation as follows: “ “Minor violation” means a rule violation that does not cause serious harm to the public, is committed by a small business, and the violation is not willful, the violation is not likely to be repeated, there is a history of compliance by the violator, or the small business has voluntarily disclosed the violation.”

Tax 61.25(1)(a) (a) For purposes of this section the definition of small business, under s. 227.114 (1), Stats., shall include any retailer who holds a contract under s. Tax 61.08, so that all retailers may expect the same treatment with respect to this section.

Tax 61.25(2) (2) If a retailer voluntarily discloses an actual or potential violation of lottery rules, guidelines, or terms of a contract with the lottery, the retailer shall be entitled to a reduction or waiver of any penalties associated with the disclosed potential violation. The amount of the reduction or the extent of the waiver shall be determined by the administrator on a case-by-case basis.

Tax 61.25(3) (3) Notwithstanding the provisions of sub. (2), no reduction or waiver may be granted for any of the following situations:

Tax 61.25(3)(a) (a) The agency discovers the violation before the small business discloses the violation.

Tax 61.25(3)(b) (b) The violation is disclosed after an agency audit or inspection of the small business has been scheduled.

Tax 61.25(3)(c) (c) The violation was identified as part of the monitoring or sampling requirements that are consistent with the requirements under an existing permit.

Tax 61.25(3)(d) (d) The violation results in a substantial economic advantage for the small business.

Tax 61.25(3)(e) (e) The small business has repeatedly violated the same rule or guideline.

Tax 61.25(3)(f) (f) The violation may result in an imminent endangerment to the environment, or to public health or safety.

Tax 61.25(3)(g) (g) The violation is determined to be an act of deceit, fraud, misrepresentation or other conduct prejudicial to public confidence in the lottery.

Tax 61.25(3)(h) (h) The violation may give the retailer an unfair economic advantage over another retailer.

Tax 61.25(4) (4) A retailer may appeal a determination of inappropriate use of discretion as outlined in section s. Tax 61.10. The administrator shall review each appeal on a case by case basis.

Tax 61.25 Note Note: Section Tax 61.25 interprets ss. 227.04, 565.10, and 565.12, Stats.

Tax 61.25 History History: CR 07-087: cr. Register April 2008 No. 628, eff. 5-1-08; correction in (1) made under s. 13.92 (4) (b) 7., Stats., Register June 2014 No. 702.