Chapter 139

139.76(1p) (1p) An excise tax is imposed upon the sale, offering or exposing for sale, possession with intent to sell, or removal for consumption or sale or other disposition for any purpose of cigars and pipe tobacco by any person engaged as a distributor or remote retail seller of them at the rate of 71 percent of the actual cost to the distributor or remote retail seller. The tax imposed under this subsection on cigars shall not exceed an amount equal to 50 cents for each cigar. The tax attaches at the time the cigars or pipe tobacco are received by the distributor in this state, except that for cigars and pipe tobacco sold by a remote retail seller, the tax attaches at the time the remote retail seller makes a remote retail sale of cigars or pipe tobacco to a consumer. The tax shall be passed on to the ultimate consumer of the cigars and pipe tobacco. All cigars and pipe tobacco received in this state for sale or distribution within this state, except tobacco products actually sold as provided in sub. (2), shall be subject to such tax.

139.76(2) (2) Tobacco products and vapor products sold to or by post exchanges of the U.S. armed forces, to or by federally operated veterans hospitals in this state, and tobacco products and vapor products sold to an interstate carrier of passengers for hire to be resold to bona fide passengers actually being transported and tobacco products and vapor products sold for shipment outside this state in interstate commerce are not subject to the tax.

139.76 History History: 1981 c. 20; 1983 a. 27; 1989 a. 56; 1999 a. 9; 2001 a. 16; 2005 a. 22; 2007 a. 20; 2009 a. 28; 2019 a. 9; 2023 a. 150.

139.76 Cross-reference Cross-reference: See also ch. Tax 9, Wis. adm. code.

139.77 139.77 Distributors, monthly returns.

139.77(1) (1) On or before the 15th day of each month, every distributor with a place of business in this state shall file a return showing the quantity, including milliliters in the case of a vapor product, and taxable price of each tobacco product or vapor product brought, or caused to be brought, into this state for sale; or made, manufactured or fabricated in this state for sale in this state, during the preceding month. Every distributor outside this state shall file a return showing the quantity, including milliliters in the case of a vapor product, and taxable price of each tobacco product or vapor product shipped or transported to retailers in this state to be sold by those retailers during the preceding month. At the time that the return is filed, the distributor shall pay the tax.

139.77(2) (2) As soon as practicable after any return is filed, the department shall examine each return and correct it, if necessary, according to its best judgment and information. If the department finds that any amount of tax is due from the taxpayer and unpaid, it shall notify the taxpayer of the deficiency, stating that it proposes to assess the amount due together with interest and penalties. If a deficiency disclosed by the department’s examination cannot be allocated to one or more particular months, the department shall notify the taxpayer of the deficiency, stating its intention to assess the amount due for a given period without allocating it to any particular months.

139.77(3) (3) If, within 60 days after the department sends notice of the proposed assessment, the taxpayer files a protest to the proposed assessment and requests a hearing on it, the department shall give notice to the taxpayer of the time and place fixed for the hearing, shall hold a hearing on the protest, and shall issue a final assessment to the taxpayer for the amount found to be due as a result of the hearing. If the taxpayer does not file a protest within 60 days, the department shall issue a final assessment to the taxpayer. In any action or proceeding in respect to the proposed assessment, the taxpayer has the burden of establishing the incorrectness or invalidity of any final assessment made by the department.

139.77(4) (4) If any taxpayer required to file any return fails to do so within the time prescribed, the taxpayer shall, on the written demand of the department, file the return within 20 days after the department sends the demand and at the same time pay the tax due on its basis. If the taxpayer fails within that time to file the return, the department shall prepare the return from the department’s own knowledge and from the information that the department obtains and on that basis shall assess a tax that the taxpayer shall pay within 10 days after the department sends to the taxpayer a written notice of the amount and a demand for its payment. In any action or proceeding in respect to the assessment, the taxpayer has the burden of establishing the incorrectness or invalidity of any return or assessment made by the department because of the failure of the taxpayer to make a return.

139.77(5) (5) All taxes are due not later than the 15th day of the month following the calendar month in which they were incurred.

139.77(7) (7) The department may recover the amount of any tax due and unpaid, interest and any penalty in a civil action. The collection of the tax, interest or penalty is not a bar to any prosecution under s. 139.85 (1).

139.77 History History: 1981 c. 20; 1985 a. 302; 1987 a. 399; 1991 a. 39; 1997 a. 27; 2017 a. 324; 2019 a. 9.

139.78 139.78 Use tax.

139.78(1) (1) Except as provided in sub. (1p), a tax is imposed upon the use or storage by consumers of tobacco products in this state at the rate, for tobacco products, not including moist snuff, vapor products, cigars, and pipe tobacco, of 71 percent of the cost of the tobacco products and, for moist snuff, at the rate of 100 percent of the manufacturer’s established list price to distributors without diminution by volume or other discounts on domestic products. The tax imposed under this subsection on cigars shall not exceed an amount equal to 50 cents for each cigar. The tax does not apply if the tax imposed by s. 139.76 (1) on the tobacco products has been paid or if the tobacco products are exempt from the tobacco products tax under s. 139.76 (2).

139.78(1m) (1m) A tax is imposed upon the use or storage by consumers of vapor products in this state at the rate of 5 cents per milliliter of the liquid or other substance based on the volume as listed by the manufacturer and at a proportionate rate for any other quantity or fractional part thereof. The tax does not apply if the tax imposed by s. 139.76 (1m) on the vapor products has been paid or if the vapor products are exempt from the vapor products tax under s. 139.76 (2).

139.78(1p) (1p) A tax is imposed upon the use or storage by consumers of cigars and pipe tobacco in this state at the rate and basis under s. 139.76 (1p). The tax does not apply if the tax imposed by s. 139.76 (1p) on the cigars or pipe tobacco has been paid or if the cigars or pipe tobacco are exempt from the tax under s. 139.76 (2).

139.78(2) (2) On or before the 15th day of each month, every consumer who during the preceding month has acquired title to or possession for use or storage in this state of tobacco products or vapor products upon which the tax imposed by s. 139.76 has not been paid shall file a return showing the quantity of tobacco products and vapor products acquired. At the time when the return is filed, the consumer shall pay the tax.

139.78(3) (3) If any return is not filed within the time specified in this section, a penalty of 5 percent of the tax, with an additional 5 percent for each additional 30 days or fraction thereof up to a maximum of 25 percent is imposed, but the penalty for failing to file timely shall not be less than $10. The department may for good cause shown extend the time for filing the return without penalty.

139.78(4) (4) Sections 139.30 to 139.44 relating to enforcement of the excise tax imposed by s. 139.31 apply to enforcement of the use tax imposed by this section.

139.78 History History: 1981 c. 20; 1985 a. 332; 1987 a. 312 s. 17; 1991 a. 39; 1997 a. 27; 2001 a. 16; 2007 a. 20; 2009 a. 28; 2019 a. 9; 2023 a. 150.

139.79 139.79 Permits; distributor; subjobber.

139.79(1) (1) No person may engage in the business of a distributor or subjobber of tobacco products or vapor products at any place of business unless that person has filed an application for and obtained a permit from the department to engage in that business at such place.

139.79(2) (2) Section 139.34 (1) (b) to (f), (4) and (9) applies to the permits under this section.

139.79(3) (3) Any person holding a cigarette distributor permit under s. 139.34 may obtain a distributor permit under this section at no charge, and any person holding a cigarette jobber permit under s. 139.34 may obtain a subjobber permit under this section at no charge.

139.79 History History: 1981 c. 20; 1983 a. 27; 1989 a. 56; 1995 a. 27; 1997 a. 27; 2019 a. 9.

139.795 139.795 Permits; remote retail seller.

139.795(1) (1) No person may engage in the business of a remote retail seller at any place of business, including a legal location in any state at which records are kept or accessed by the remote retail seller, unless that person has filed an application for and obtained a permit from the department to engage in that business at such place.

139.795(2) (2) Section 139.34 (1) (b) to (f) and (9) applies to the permit under this section.

139.795 History History: 2023 a. 150.

139.80 139.80 Refunds, credits. If tobacco products or vapor products upon which the tax has been reported and paid are shipped or transported by the distributor to consumers to be consumed outside the state or to retailers or subjobbers outside the state to be sold by those retailers or subjobbers outside the state or are returned to the manufacturer by the distributor or destroyed by the distributor, the tax may be refunded or credited to the distributor, as prescribed by the department. Any overpayment of the tax imposed under s. 139.78 may be refunded or credited to the taxpayer, as prescribed by the department.

139.80 History History: 1981 c. 20; 2019 a. 9.

139.801 139.801 Bad debt deductions.

139.801(1) (1) In this section, “bad debt” means an amount that is equal to the purchase price of tobacco products and vapor products, if such amount may be claimed as a deduction under section 166 of the Internal Revenue Code. “Bad debt” does not include financing charges, interest on the wholesale price of tobacco products and vapor products, uncollectible amounts on property that remains in the seller’s possession until the full purchase price is paid, expenses incurred in attempting to collect any debt, debts sold or assigned to 3rd parties for collection, and repossessed property.

139.801(2) (2) A distributor who pays the taxes imposed under s. 139.76 may claim as a deduction on a return under s. 139.77 the amount of any such taxes that are attributable to bad debt that the distributor writes off as uncollectible in the distributor’s books and records and that is eligible to be deducted as bad debt for federal income tax purposes, regardless of whether the distributor is required to file a federal income tax return. A distributor who claims a deduction under this section shall claim the deduction on the return under s. 139.77 that is submitted for the period in which the distributor writes off the amount of the deduction as uncollectible in the distributor’s books and records and in which such amount is eligible to be deducted as bad debt for federal income tax purposes. If the distributor subsequently collects in whole or in part any bad debt for which a deduction is claimed under this section, the distributor shall include the amount collected in the return filed for the period in which the amount is collected and shall pay the tax with the return.

139.801(3) (3) A distributor who claims a deduction under this section shall submit with the return under sub. (2) all of the following:

139.801(3)(a) (a) A copy of the original invoice for the sale of tobacco products or vapor products that represents bad debt.

139.801(3)(b) (b) Evidence that the tobacco products or vapor products described in the invoice under par. (a) were delivered to the person who ordered them.

139.801(3)(c) (c) Evidence that the person who ordered and received the tobacco products or vapor products did not pay the distributor for them.

139.801(3)(d) (d) Evidence that the distributor used reasonable collection practices in attempting to collect the amount owed under par. (c).

139.801(4) (4) Any person who possesses tobacco products or vapor products for which the taxes imposed under this subchapter have not been paid and have been claimed as a deduction under this section shall file a report as prescribed by the department, pay the taxes imposed under this subchapter on tobacco products and vapor products, and be subject to this subchapter in the same manner as is provided for persons who hold valid permits under this subchapter.

139.801 History History: 2005 a. 25; 2019 a. 9.

139.802 139.802 Preferred claims. If the property of any purchaser of tobacco products or vapor products from any permittee under this subchapter is seized upon any intermediate or final process of any court in this state, or if the business of any purchaser of tobacco products or vapor products from any permittee under this subchapter is suspended by the action of creditors or put into the hands of any assignee, receiver, or trustee, all amounts that are due from the purchaser to any permittee for taxes imposed under this subchapter that the permittee has paid to the state for tobacco products or vapor products purchased from the permittee shall be considered preferred claims, and shall be paid in full, and the permittee shall be a preferred creditor.

139.802 History History: 2005 a. 25; 2019 a. 9.

139.803 139.803 Refunds to Indian tribes. The department may refund the taxes collected under s. 139.76 in respect to sales on reservations or trust lands of an Indian tribe to the tribal council of the tribe having jurisdiction over the reservation or trust land on which the sale is made only if all of the following conditions are fulfilled:

139.803(1) (1) The tribal council has filed a claim for the refund with the department.

139.803(2) (2) The tribal council has approved the retailer.

139.803(3) (3) The land on which the sale occurred was designated a reservation or trust land on or before January 1, 1983, or on a later date as determined by an agreement between the department and the tribal council.

139.803(4) (4) The tobacco products or vapor products were not delivered by the retailer to the buyer by means of a common carrier, a contract carrier, or the U.S. postal service.

139.803(5) (5) The retailer has not sold the tobacco products or vapor products to another retailer or to a subjobber.

139.803 History History: 1999 a. 9; 2009 a. 28; 2019 a. 9.

139.805 139.805 Agreements with Indian tribes. The department may enter into agreements with Indian tribes to provide for the refunding of the tax imposed under s. 139.76. If the department enters into an agreement with an Indian tribe, the agreement may provide for refunding 100 percent of that tax on tobacco products and vapor products sold on the tribal reservation to enrolled members of the tribe residing on the tribal reservation and may provide for refunding 50 percent of that tax on tobacco products and vapor products sold on the tribal reservation to persons who are not enrolled members of the tribe residing on the tribal reservation.

139.805 History History: 1999 a. 9; 2019 a. 9.

139.81 139.81 Salespersons.

139.81(1) (1) No person may sell or take orders for tobacco products or vapor products for resale in this state for any manufacturer or permittee unless the person has filed an application for and obtained a valid certificate under s. 73.03 (50) and a salesperson’s permit from the department. No manufacturer or permittee shall authorize any person to sell or take orders for tobacco products or vapor products in this state unless the person has filed an application for and obtained a valid certificate under s. 73.03 (50) and a salesperson’s permit. Each application for a permit shall disclose the name and address of the employer and shall remain effective only while the salesperson represents the named employer. If the 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 salesperson holding a permit.

139.81(2) (2) Section 139.34 (1) (b) to (e) applies to the permits under this section.

139.81(3) (3) Any person holding a cigarette salesperson’s permit under s. 139.37 may obtain a salesperson’s permit under this section at no charge.

139.81 History History: 1981 c. 20; 1983 a. 27; 1997 a. 27; 2019 a. 9.

139.815 139.815 Remote retail sales. No person may make remote retail sales to consumers unless all of the following apply:

139.815(1) (1) The person obtains a remote retail seller permit under s. 139.795.

139.815(2) (2) The person registers with the department and collects the taxes administered or imposed under s. 77.52 or 77.53.

139.815(3) (3) The person collects and remits the tax under s. 139.76.

139.815(4) (4) The person uses an independent, 3rd-party age verification service that compares information available from a commercially available database or aggregate of databases that are regularly used by government agencies and business for age and identity verification to determine whether a prospective consumer has attained the minimum age for purchasing a tobacco product under the federal Food, Drug, and Cosmetic Act based on the personal information provided by the prospective consumer during the ordering process.

139.815 History History: 2023 a. 150.

139.82 139.82 Records, returns.

139.82(1) (1) Every manufacturer located out of the state shall keep records of all sales of tobacco products and vapor products shipped into this state. Every manufacturer located in this state shall keep records of production, sales and withdrawals of tobacco products and vapor products. Every distributor and remote retail seller shall keep records of purchases and sales of tobacco products and vapor products. Every subjobber shall keep records of all purchases and disposition of tobacco products and vapor products. Every warehouse operator shall keep records of receipts and withdrawals of tobacco products and vapor products. All records shall be accurate and complete and be kept in a manner prescribed by the department. These records shall be preserved on the premises described in the permit in such a manner as to ensure permanency and accessibility for inspection at reasonable hours by authorized personnel of the department.

139.82(2) (2) 

139.82(2)(a) (a) Except as provided in par. (b), every permittee shall render a true and correct invoice of every sale of tobacco products and vapor products at wholesale, or, if the permittee is a remote retail seller, at retail, and shall on or before the 15th day of each calendar month file a verified report of all tobacco products and vapor products purchased, sold, received, warehoused or withdrawn during the preceding calendar month.

139.82(2)(b) (b) The department may allow any subjobber permittee who does not sell tobacco products or vapor products, except for those on which the tax under this subchapter 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 value of tobacco products and vapor products purchased and sold during the preceding calendar quarter.

139.82(3) (3) The department shall prescribe reasonable and uniform methods of keeping records and making reports and shall prescribe and furnish the necessary report forms.

139.82(4) (4) If the department 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 from them the amount of tax due, the department shall give notice of such fact to that permittee and require that the records be revised and kept in the prescribed form. If that permittee fails to comply within 30 days that 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 department shall send a bill for expenses and the permittee shall pay the amount of the bill within 10 days.

139.82(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 shall be considered filed in time if it is mailed in a properly addressed envelope with first class postage prepaid, if the envelope is officially postmarked on the date due, and if the report is actually received by the department 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 department or at the destination that the department prescribes.

139.82(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 remote retail sellers, 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.

139.82 Note NOTE: Sub. (6) is shown as amended by 2023 Wis. Acts 73 and 150 and as merged by the legislative reference bureau under s. 13.92 (2) (i).

139.82(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.

139.82(8) (8) Each distributor and remote retail seller shall collect and remit the excise tax imposed by s. 139.76 on tobacco products and vapor products not exempt from tax under s. 139.76 (2), with the reports required to be filed under this section.

139.82 History History: 1981 c. 20; 1987 a. 312; 1991 a. 39; 1997 a. 27; 1999 a. 9; 2011 a. 68; 2015 a. 216; 2017 a. 17; 2019 a. 9; 2023 a. 73, 150; s. 13.92 (2) (i).

139.83 139.83 Administration and enforcement. Sections 139.355, 139.365, 139.39 and 139.40, as they apply to the tax under subch. II, apply to the administration and enforcement of this subchapter.

139.83 History History: 1981 c. 20; 1985 a. 302; 1991 a. 39.

139.832 139.832 Police powers. The duly authorized employees of the department have all necessary police powers to prevent violations of this subchapter.

139.832 History History: 1989 a. 31.

139.835 139.835 Timely filing. The provisions on timely filing under s. 71.80 (18) apply to the tax under this subchapter.

139.835 History History: 1985 a. 302; 1987 a. 312 s. 17.

139.84 139.84 Bonds. Section 78.11, as it applies to suppliers of motor vehicle fuel, applies to persons liable for the tax under this subchapter.

139.84 History History: 1985 a. 302; 1995 a. 408.

139.85 139.85 Interest and penalties.

139.85(1) (1) The interest and penalties under s. 139.44 (2) to (7) and (9) to (12) apply to this subchapter. In addition, a person who violates s. 139.82 (8) may be fined not more than $10,000 or imprisoned for not more than 9 months or both.

139.85(2) (2) If a person fails to file any return required under s. 139.77 (1) by the due date, unless the person shows that that failure was due to reasonable cause and not due to neglect, the department shall add to the amount of tax required to be shown on that return 5 percent of the amount of the tax if the failure is for not more than one month and an additional 5 percent of the tax for each additional month or fraction of a month during which the failure continues, but not more than 25 percent of the tax. For purposes of this subsection, the amount of tax required to be shown on the return shall be reduced by the amount of tax that is paid on or before the due date and by the amount of any credit against the tax that may be claimed on the return.

139.85 History History: 1981 c. 20; 1987 a. 399; 1991 a. 39; 1999 a. 9; 2001 a. 109.

139.86 139.86 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.