Chapter 139

139.37(1)(a) (a) No person shall sell or take orders for cigarettes for resale in this state for any manufacturer or permittee without first obtaining a salesperson’s permit from the department of revenue. No manufacturer or permittee shall authorize any person to sell or take orders for cigarettes in this state without first having such person secure a salesperson’s permit. The department shall issue the required number of permits to manufacturers and permittees who hold a valid certificate issued under s. 73.03 (50). Each application for a permit shall disclose the name and address of the employer and such permit shall remain effective only while the salesperson represents such named employer. If such salesperson is thereafter employed by another manufacturer or permittee the salesperson shall obtain a new salesperson’s permit. Each manufacturer and permittee shall notify the department within 10 days after the resignation or dismissal of any such salesperson holding a permit.

139.37(1)(c) (c) Subject to ss. 111.321, 111.322 and 111.335, no permit under this section may be granted to any person who:

139.37(1)(c)1. 1. Has been convicted of a misdemeanor not involving chs. 340 to 349, at least 3 times;

139.37(1)(c)2. 2. Has been convicted of a felony, unless pardoned;

139.37(1)(c)3. 3. Is addicted to the use of a controlled substance or controlled substance analog under ch. 961;

139.37(1)(c)4. 4. Has income which comes principally from gambling, or who has been convicted of 2 or more gambling offenses;

139.37(1)(c)5. 5. Has been guilty of crimes relating to prostitution; or

139.37(1)(c)6. 6. Has been guilty of crimes relating to loaning money or anything of value to persons holding licenses or permits pursuant to ch. 125.

139.37(1)(d) (d) The department of revenue shall immediately notify any person who is denied a permit in writing of the denial and the reasons therefor.

139.37(1)(e) (e) A denial of a permit by the department of revenue is subject to judicial review under ch. 227.

139.37(2) (2) No representative of any manufacturer shall sell more than 3 cartons of any one kind of cigarettes to any retailer at one time.

139.37 History History: 1971 c. 219; 1973 c. 198; 1975 c. 39 s. 732 (2m); 1975 c. 199; 1977 c. 125; 1979 c. 89; 1981 c. 79 s. 18; 1981 c. 334 s. 25 (1); 1981 c. 380, 391; 1983 a. 27 s. 2200 (45); 1995 a. 27, 448.

139.38 139.38 Records, returns.

139.38(1) (1) Every manufacturer located out of the state shall keep records of all sales of cigarettes shipped into this state. Every manufacturer located in the state shall keep records of production, sales and withdrawals of cigarettes. Every distributor and direct marketer shall keep records of purchases and sales of cigarettes. Every manufacturer, bonded direct marketer, and distributor who is authorized by the department to purchase and apply stamps shall also keep records of purchases and disposition of stamps. Every jobber, multiple retailer, and vending machine operator shall keep records of all purchases and disposition of cigarettes. Every warehouse operator shall keep records of receipts and withdrawals of cigarettes. All such records shall be accurate and complete and be kept in a manner prescribed by the secretary. These records shall be preserved on the premises described in the permit or license in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the department.

139.38(1m) (1m) Records of purchases and sales of cigarettes under sub. (1) that are kept by direct marketers shall indicate, for each shipment of cigarettes into this state in the month preceding the report under sub. (2), the invoice date and number; the quantity of cigarettes shipped; the brand name of the cigarettes shipped; the manufacturer of the cigarettes shipped and the point of origin; the purchaser’s name, address, and birth date; the name of the person to whom the cigarettes were shipped; the address to which the cigarettes were shipped; and any other information the department requires.

139.38(2) (2) 

139.38(2)(a) (a) Except as provided in par. (b), every manufacturer, distributor, jobber, and direct marketer shall render a true and correct invoice of every sale of cigarettes and every permittee shall on or before the 15th day of each calendar month file a verified report of all cigarettes purchased, sold, received, warehoused or withdrawn during the preceding calendar month.

139.38(2)(b) (b) The department may allow any jobber, multiple retailer, nonbonded direct marketer, or vending machine operator permittee who does not sell cigarettes, except for those on which the tax under this chapter is paid, to file a quarterly report. The quarterly report shall be filed on or before the 15th day of the next month following the close of each calendar quarter. The report shall specify the number of cigarettes purchased and sold during the preceding calendar quarter.

139.38(2m) (2m) The provisions on timely filing under s. 71.80 (18) apply to the tax under this subchapter.

139.38(3) (3) The secretary shall prescribe reasonable and uniform methods of keeping records and making reports. The secretary shall prescribe and furnish the necessary report forms.

139.38(4) (4) If the secretary finds that the records of any permittee are not kept in the prescribed form or are in such condition that an unusual amount of time is required to determine therefrom the amount of tax due, the secretary shall give notice of such fact to such permittee and, in such notice, require that the records be revised and kept in the prescribed form. If such permittee fails to comply within 30 days the permittee shall pay the expenses reasonably attributable to a proper examination and tax determination at the rate of $30 per day of each auditor. The secretary shall send a bill for such expenses and the permittee shall pay the amount of such bill within 10 days.

139.38(5) (5) If any permittee fails to file a report when due the permittee shall be required to pay a late filing fee of $10. A report that is mailed is filed in time if it is mailed in a properly addressed envelope with postage duly prepaid, which envelope is officially postmarked, or marked or recorded electronically as provided under section 7502 (f) (2) (c) of the Internal Revenue Code, on the date due, and if the report is actually received by the secretary or at the destination that the department prescribes within 5 days of the due date. A report that is not mailed is timely if it is received on or before the due date by the secretary or at the destination that the department prescribes. For purposes of this subsection, “mailed” includes delivery by a delivery service designated under section 7502 (f) of the Internal Revenue Code.

139.38(6) (6) Sections 71.78 (1), (1g), (1m), and (4) to (9) and 71.83 (2) (a) 3. and 3m., relating to confidentiality of income and franchise tax returns, apply to any information obtained from any person on a cigarette tax return, report, schedule, exhibit, or other document or from an audit report pertaining to the return, report, schedule, exhibit, or document, except that the department shall publish on its website, at least quarterly, a current list of permits issued to distributors and jobbers under s. 139.34 and include on the list the name and address of the permit holder and the date on which the department issued the permit.

139.38(7) (7) The department may inspect the business records of any retailer doing business on a reservation or on an Indian tribe’s trust land.

139.38 History History: 1977 c. 289 ss. 9, 11m; 1981 c. 20; 1983 a. 27; 1985 a. 302; 1987 a. 312 ss. 11, 17; 1991 a. 39; 1993 a. 482; 1997 a. 27; 2005 a. 25, 49; 2011 a. 68; 2015 a. 216; 2017 a. 17; 2023 a. 73.

139.38 Cross-reference Cross-reference: See also ss. Tax 9.19, 9.22, 9.46, and 9.47, Wis. adm. code.

139.39 139.39 Administration and enforcement.

139.39(1) (1) The department shall administer and enforce ss. 139.30 to 139.44, 139.75 to 139.85 and 134.65. The department shall adopt rules necessary to administer and enforce its duties.

139.39(1m) (1m) The duly authorized employees of the department have all necessary police powers to prevent violations of this subchapter.

139.39(2) (2) Authorized personnel of the department of justice and the department of revenue, and any sheriff, police officer, marshal or constable, within their respective jurisdictions, may at all reasonable hours enter the premises of any permittee or retailer and examine the books and records to determine whether the tax imposed by s. 139.31 has been fully paid and may enter and inspect any premises where cigarettes are made, sold or stored to determine whether ss. 139.30 to 139.44 are being complied with.

139.39(3) (3) The secretary may suspend or revoke the permit of any permittee who violates ss. 100.30 or 139.30 to 139.44 or any rules adopted under sub. (1). The secretary shall revoke the permit of any permittee who violates s. 100.30 3 or more times within a 5-year period.

139.39(4) (4) No suit shall be maintained in any court to restrain or delay the collection or payment of the tax levied in s. 139.31. The aggrieved taxpayer shall pay the tax when due and, if paid under protest, may at any time within 90 days from the date of payment, sue the state to recover the tax paid. If it is finally determined that any part of the tax was wrongfully collected, the secretary of administration shall pay the amount wrongfully collected out of the general fund. A separate suit need not be filed for each separate payment made by any taxpayer, but a recovery may be had in one suit for as many payments as may have been made.

139.39(4m) (4m) Any person who sells, distributes, or manufactures cigarettes and who sustains direct economic or commercial injury as the result of a violation of this chapter may bring an action for injunctive relief.

139.39(5) (5) 

139.39(5)(a) (a) Any person may be compelled to testify in regard to any violation of ss. 134.65 and 139.30 to 139.44 of which the person may have knowledge, even though such testimony may tend to incriminate the person, upon being granted immunity from prosecution in connection therewith, and upon the giving of such testimony, the person shall not be prosecuted because of the violation relative to which the person has testified.

139.39(5)(b) (b) The immunity provided under par. (a) is subject to the restrictions under s. 972.085.

139.39(6) (6) Sections 71.74 (1), (2), (10), (11) and (14), 71.77, 71.80 (12), 71.91 (1) (a) and (c) and (2) to (7), 71.92 and 73.0301 as they apply to the taxes under ch. 71 apply to the taxes under this subchapter. Section 71.74 (13) as it applies to the collection of the taxes under ch. 71 applies to the collection of the taxes under this subchapter, except that the period during which notice of an additional assessment shall be given begins on the due date of the report under this subchapter.

139.39 History History: 1975 c. 39, 199; 1979 c. 34; 1981 c. 20; 1985 a. 135 s. 83 (5); 1989 a. 31, 122, 359; 1991 a. 39; 1995 a. 233, 408; 1997 a. 35, 237; 2001 a. 16; 2003 a. 33.

139.39 Cross-reference Cross-reference: See also s. Tax 9.36, Wis. adm. code.

139.395 139.395 Theft of tax moneys. All cigarette tax moneys received by a distributor, bonded direct marketer, or manufacturer for the sale of cigarettes on which the tax under this subchapter has become due and has not been paid are trust funds in the hands of the distributor, bonded direct marketer, or manufacturer and are the property of this state. Any distributor, bonded direct marketer, or manufacturer who fraudulently withholds, appropriates or otherwise uses cigarette tax moneys that are the property of this state is guilty of theft under s. 943.20 (1), whether or not the distributor, bonded direct marketer, or manufacturer has or claims to have an interest in those moneys.

139.395 History History: 1993 a. 16; 2005 a. 25.

139.40 139.40 Seizure and confiscation.

139.40(1) (1) All cigarettes acquired, owned, imported, possessed, kept, stored, made, sold, distributed or transported in violation of this chapter, and all personal property used in connection therewith is unlawful property and subject to seizure by the secretary or any peace officer. All cigarettes seized for violating s. 139.31 (4) or (5) shall be destroyed.

139.40(2) (2) If cigarettes which do not bear the proper tax stamps or on which the tax has not been paid are so seized they may be given to law enforcement officers to use in criminal investigations or sold to qualified buyers by the secretary, without notice. If the cigarettes are sold, after deducting the costs of the sale and the keeping of the property, the proceeds of the sale shall be paid into the state treasury. If the secretary finds that such cigarettes may deteriorate or become unfit for use in criminal investigations or for sale or that those uses would otherwise be impractical, the secretary may order them destroyed or give them to a charitable or penal institution for free distribution to patients or inmates.

139.40(3) (3) If cigarettes on which the tax has been paid and which bear the proper tax stamps are seized they shall be returned to the true owner if ownership can be ascertained and such owner or the owner’s agent is not involved in the violation resulting in such seizure. If such ownership cannot be ascertained or if the owner or the owner’s agent was guilty of a violation of any of the provisions of ss. 139.30 to 139.44, which resulted in the seizure of such cigarettes, they may be sold or otherwise disposed of as provided in sub. (2).

139.40(4) (4) If personal property other than cigarettes is so seized the secretary shall advertise the same for sale by publication of a class 2 notice under ch. 985. If no claimant, either of lien or ownership, has notified the secretary within 10 days after last insertion of such notice, the property shall be sold. If such sale is not practical the property may be destroyed. If a claimant of a lien or ownership notifies the secretary within the prescribed time, the secretary may apply to a court of record in the county where the property was seized for an order directing disposition of said property or the proceeds thereof. If a sale of such seized property is ordered, all liens, if any, may be transferred from the property to the proceeds of such sale. Neither the property seized nor the proceeds from the sale thereof shall be turned over to any claimant of lien or ownership unless such claimant first establishes that the property was not used in connection with any violation of ss. 139.30 to 139.44 or that, if so used, it was done without the claimant’s knowledge or consent and without the claimant’s knowledge of such facts as should have given the claimant reason to believe it would be put to such use. If no claim of lien or ownership is so established the property may be ordered destroyed. In case of sale, the net proceeds after deducting costs, expenses and established claims shall be paid into the state treasury.

139.40 History History: 1993 a. 482; 1997 a. 291; 2001 a. 16.

139.41 139.41 Place to place delivery. No person shall peddle any cigarettes from house to house, where the sale is consummated and delivery made concurrently.

139.42 139.42 Nuisance. Any building or place of any kind where cigarettes are sold, possessed, stored or manufactured without a lawful permit in violation of ss. 139.30 to 139.41 is declared a public nuisance and may be closed and abated as such.

139.43 139.43 Statewide concern. Sections 139.30 to 139.44 shall be construed as an enactment of statewide concern for the purpose of providing a uniform regulation of the sale of cigarettes.

139.43 History History: 1993 a. 213; 1995 a. 225.

139.43 Annotation The state regulatory scheme for tobacco sales preempts municipalities from adopting regulations that are not in strict conformity with those of the state. U.S. Oil, Inc. v. City of Fond du Lac, 199 Wis. 2d 333, 544 N.W.2d 589 (Ct. App. 1995), 95-0213.

139.44 139.44 Interest and penalties.

139.44(1) (1) Any person who falsely or fraudulently makes, alters or counterfeits any stamp or procures or causes the same to be done, or who knowingly utters, publishes, passes or tenders as true any false, altered or counterfeit stamp, or who affixes the same to any package or container of cigarettes, or who possesses with the intent to sell any cigarettes in containers to which false, altered or counterfeit stamps have been affixed is guilty of a Class G felony.

139.44(1m) (1m) Any person who falsely or fraudulently tampers with a cigarette meter in order to evade the tax under s. 139.31 is guilty of a Class G felony.

139.44(2) (2) Any person who makes or signs any false or fraudulent report may be fined not more than $10,000 or imprisoned for not more than 9 months or both.

139.44(2m) (2m) Any person who evades or attempts to evade, or who aids or abets the evasion or attempted evasion of, a tax imposed under s. 139.31 or 139.76 is guilty of the following:

139.44(2m)(a) (a) A Class A misdemeanor if the amount of the tax is no more than $2,500.

139.44(2m)(b) (b) A Class I felony if the amount of the tax is more than $2,500, but no more than $5,000.

139.44(2m)(c) (c) A Class H felony if the amount of the tax is more than $5,000, but no more than $10,000.

139.44(2m)(d) (d) A Class G felony if the amount of the tax is more than $10,000, but no more than $100,000.

139.44(2m)(e) (e) A Class F felony if the amount of the tax is more than $100,000.

139.44(3) (3) Any permittee who fails to keep the records required by ss. 139.30 to 139.42 or 139.77 to 139.82 shall be fined not less than $100 nor more than $500 or imprisoned not more than 6 months or both.

139.44(4) (4) Any person who refuses to permit the examination or inspection authorized in s. 139.39 (2) or 139.83 may be fined not more than $500 or imprisoned not more than 90 days or both. Such refusal shall be cause for immediate suspension or revocation of permit by the secretary.

139.44(5) (5) Any person who violates any of the provisions of ss. 139.30 to 139.41 or 139.75 to 139.83 for which no other penalty is prescribed shall be fined not less than $100 nor more than $1,000 or imprisoned not less than 10 days nor more than 90 days or both.

139.44(6) (6) Any person who violates any of the rules of the department shall be fined not less than $100 nor more than $500 or be imprisoned not more than 6 months or both.

139.44(7) (7) In addition to the penalties imposed for violation of ss. 139.30 to 139.41 or 139.75 to 139.83 or any of the rules of the department, the permit of any person convicted shall be automatically revoked and he or she shall not be granted another permit for a period of 2 years following such revocation.

139.44(8) (8) Penalties for violation of s. 139.321 (1) shall be as follows:

139.44(8)(a) (a) If the number of cigarettes does not exceed 200, the person may be fined not more than $200 or imprisoned for not more than 6 months or both.

139.44(8)(am) (am) If the number of cigarettes exceeds 200 but does not exceed 3,000, the person may be fined not more than $1,000 or imprisoned for not more than one year or both.

139.44(8)(b) (b) If the number of cigarettes exceeds 3,000 but does not exceed 5,000, the person is guilty of a Class I felony.

139.44(8)(c) (c) If the number of cigarettes exceeds 5,000 but does not exceed 10,000, the person is guilty of a Class H felony.

139.44(8)(d) (d) If the number of cigarettes exceeds 10,000, the person is guilty of a Class F felony.

139.44(9) (9) Unpaid taxes bear interest at the rate of 12 percent per year from the due date of the return until paid or deposited with the department, and all refunded taxes bear interest at the rate of 3 percent per year from the due date of the return to the date on which the refund is certified on the refund rolls.

139.44(10) (10) All nondelinquent payments of additional amounts owed shall be applied in the following order: penalties, interest, tax principal.

139.44(11) (11) Delinquent cigarette taxes bear interest at the rate of 1.5 percent per month until paid. The taxes imposed by this subchapter shall become delinquent if not paid:

139.44(11)(a) (a) In the case of a timely filed return, no return filed or a late return, on or before the due date of the return; or

139.44(11)(b) (b) In the case of a deficiency determination of taxes, within 2 months after the date of demand.

139.44(12) (12) If due to neglect an incorrect return is filed, the entire tax finally determined is subject to a penalty of 25 percent of the tax exclusive of interest or other penalty. A person filing an incorrect return has the burden of proving that the error or errors were due to good cause and not due to neglect.

139.44 History History: 1981 c. 20; 1983 a. 63; 1985 a. 302; 1987 a. 399; 1989 a. 31; 1993 a. 16; 1997 a. 27, 283; 2001 a. 109; 2013 a. 20; 2023 a. 73.

139.45 139.45 Prosecutions by attorney general. Upon request by the secretary of revenue, the attorney general may represent this state or assist a district attorney in prosecuting any case arising under this subchapter or under ss. 134.65 and 134.66. The attorney general may take any action necessary to enforce s. 139.345.

139.45 History History: 1985 a. 302; 2005 a. 25.

139.46 139.46 Lists. The department shall compile and maintain a list of direct marketers who have complied with the requirements of s. 139.345 and a list of direct marketers who the department knows have not complied with such requirements. The department shall provide copies of the lists described under this section to the attorney general and to each person who delivers cigarettes to consumers in this state that are sold by direct marketing under s. 139.345.

139.46 History History: 2005 a. 25.

subch. III of ch. 139 SUBCHAPTER III

TOBACCO PRODUCTS TAX

Subch. III of ch. 139 Cross-reference Cross-reference: See also s. Tax 9.69, Wis. adm. code.

139.75 139.75 Definitions. In this subchapter:

139.75(1d) (1d) “Actual cost” means the total price of cigars or pipe tobacco charged by the manufacturer or other seller to an unrelated distributor or remote retail seller. The total price includes all charges by the manufacturer or other seller that are necessary to complete the sale. The total price does not include a reduction for any cost or expense, regardless of whether the cost or expense is separately stated on an invoice, that is incurred by the manufacturer or other seller, including fees, delivery, freight, transportation, packaging, handling, or marketing costs, federal excise taxes, import fees, or duties. The total price does not include a reduction for the value or cost of discounts or free promotional or sample products. For purposes of this subsection, a manufacturer or other seller is related to a distributor or remote retail seller if the 2 parties have significant common purposes and substantial common membership or, directly or indirectly, substantial common direction or control.