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)(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)(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 105.09ATCP 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 105.10ATCP 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.