Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB835 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 835
5	5	December 19, 2023 - Introduced by Senators FEYEN and BALLWEG, cosponsored by
6	6	Representatives SWEARINGEN, C. ANDERSON, BALDEH, DALLMAN, MYERS,
7	7	OHNSTAD, SINICKI, SUBECK and STEFFEN. Referred to Committee on
8	8	Universities and Revenue.
9	9	*AUTHORS SUBJECT TO CHANGE*
10	10	AN ACT to renumber 139.75 (1); to amend 139.76 (1); and to create 139.75 (1d),
11	11	139.75 (1p), 139.75 (5u), 139.75 (6c), 139.75 (6g), 139.75 (9w), 139.76 (1e),
12	12	139.775, 139.795 and 139.815 of the statutes; relating to: remote sellers of
13	13	cigars and pipe tobacco.
14	14	Analysis by the Legislative Reference Bureau
15	15	This bill prohibits a person from making remote retail sales of cigars or pipe
16	16	tobacco unless the person obtains a remote retail seller permit from the Department
17	17	of Revenue; uses an independent, third-party age verification service to determine
18	18	whether prospective buyers are 21 years of age; and satisfies certain other
19	19	requirements specified in the bill, including, in certain circumstances, collection of
20	20	the state sales and use tax. Under the bill, a “remote retail sale” of cigars or pipe
21	21	tobacco is a sale for which a consumer submits an order while not in the physical
22	22	presence of the seller or for which a consumer is not in the physical presence of the
23	23	seller when obtaining possession of the cigars or pipe tobacco. The bill also requires
24	24	a person to obtain a remote retail seller permit from DOR for each place of business
25	25	at which the person engages in the business of a remote retail seller. Remote retail
26	26	sellers must file a report and certain other forms specified in the bill with DOR each
27	27	month, and must pay to DOR the tobacco products tax incurred by the deadline for
28	28	filing those materials. The bill also specifies requirements regarding the calculation
29	29	of the tobacco products tax imposed on remote retail sales of cigars and pipe tobacco.
30	30	Under current law, a person who brings or causes to be brought into the state
31	31	tobacco products for the purpose of selling the tobacco products is a tobacco products
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37	37	SENATE BILL 835
38	38	distributor and must obtain a permit from DOR to engage in that business. Current
39	39	law requires distributors to file monthly returns with DOR, and must pay to DOR
40	40	the tobacco products tax incurred by the deadline for filing those returns.
41	41	For further information see the state fiscal estimate, which will be printed as
42	42	an appendix to this bill.
43	43	The people of the state of Wisconsin, represented in senate and assembly, do
44	44	enact as follows:
45	45	SECTION 1. 139.75 (1) of the statutes is renumbered 139.75 (1h).
46	46	SECTION 2. 139.75 (1d) of the statutes is created to read:
47	47	139.75 (1d) “Actual cost” means the price paid by a remote retail seller for a
48	48	product.
49	49	SECTION 3. 139.75 (1p) of the statutes is created to read:
50	50	139.75 (1p) “Cigar” means any roll of tobacco wrapped in leaf tobacco or in any
51	51	substance containing tobacco but does not include a cigarette.
52	52	SECTION 4. 139.75 (5u) of the statutes is created to read:
53	53	139.75 (5u) “Pipe tobacco” means any tobacco that, because of its appearance,
54	54	type, packaging, or labeling, is suitable for use and likely to be offered to or purchased
55	55	by consumers as tobacco to be smoked in a pipe.
56	56	SECTION 5. 139.75 (6c) of the statutes is created to read:
57	57	139.75 (6c) “Remote retail sale” means any sale of cigars or pipe tobacco to a
58	58	consumer that satisfies any of the following:
59	59	(a) The consumer submits the order for the sale by telephone, a method of voice
60	60	transmission, mail, or the Internet or other online service, or the seller is otherwise
61	61	not in the physical presence of the buyer when the order or request for purchase is
62	62	made.
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85	85	(b) The cigars or pipe tobacco are delivered to the buyer by common carrier,
86	86	private delivery service, or other method of remote delivery, or the seller is not in the
87	87	physical presence of the buyer when the buyer obtains possession of the cigars or pipe
88	88	tobacco.
89	89	SECTION 6. 139.75 (6g) of the statutes is created to read:
90	90	139.75 (6g) “Remote retail seller” means a person located inside or outside of
91	91	this state who makes remote retail sales.
92	92	SECTION 7. 139.75 (9w) of the statutes is created to read:
93	93	139.75 (9w) “Stock keeping unit number” means a unique identifier assigned
94	94	by a distributor or remote retail seller to a product to track inventory.
95	95	SECTION 8. 139.76 (1) of the statutes is amended to read:
96	96	139.76 (1) An excise tax is imposed upon the sale, offering or exposing for sale,
97	97	possession with intent to sell or removal for consumption or sale or other disposition
98	98	for any purpose of tobacco products by any person engaged as a distributor of them
99	99	at the rate, for tobacco products, not including moist snuff and vapor products, of 71
100	100	percent of the manufacturer's established list price to distributors without
101	101	diminution by volume or other discounts on domestic products and, for moist snuff,
102	102	at the rate of 100 percent of the manufacturer's established list price to distributors
103	103	without diminution by volume or other discounts on domestic products. The tax
104	104	imposed under this subsection on cigars shall not exceed an amount equal to 50 cents
105	105	for each cigar. On products imported from another country, not including moist snuff
106	106	and vapor products, the rate of tax is 71 percent of the amount obtained by adding
107	107	the manufacturer's list price to the federal tax, duties and transportation costs to the
108	108	United States. On moist snuff imported from another country, the rate of the tax is
109	109	100 percent of the amount obtained by adding the manufacturer's list price to the
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136	136	SECTION 8 SENATE BILL 835
137	137	federal tax, duties, and transportation costs to the United States. The tax attaches
138	138	at the time the tobacco products are received by the distributor in this state, except
139	139	that for cigars and pipe tobacco sold by a remote retail seller, the tax attaches at the
140	140	time the remote retail seller makes a remote retail sale of cigars or pipe tobacco to
141	141	a consumer. The tax shall be passed on to the ultimate consumer of the tobacco
142	142	products. All tobacco products received in this state for sale or distribution within
143	143	this state, except tobacco products actually sold as provided in sub. (2), shall be
144	144	subject to such tax.
145	145	SECTION 9. 139.76 (1e) of the statutes is created to read:
146	146	139.76 (1e) The tax under sub. (1) imposed on cigars and pipe tobacco sold by
147	147	remote retail sellers shall apply to the actual cost of the cigars and pipe tobacco to
148	148	the remote retail seller, or if the actual cost is not available, the average of the actual
149	149	cost to the remote retail seller of cigars or pipe tobacco identified by the same stock
150	150	keeping unit number as the cigars or pipe tobacco over the 12 months before January
151	151	1 of the year in which the sale occurs.
152	152	SECTION 10. 139.775 of the statutes is created to read:
153	153	139.775 Records, reports, and returns of remote retail sellers. (1) A
154	154	remote retail seller shall keep all records of remote retail sales.
155	155	(2) A remote retail seller shall file a report with the department no later than
156	156	the 15th day of each month identifying the total quantity, date, and dollar value of
157	157	all remote retail sale shipments made during the preceding month.
158	158	(3) A remote retail seller that does not hold a distributor permit under s. 139.79
159	159	shall file a return described under s. 139.77 (1) on a form prescribed by the
160	160	department and shall report on the return the quantity and actual cost of each cigar
161	161	or pipe tobacco product shipped or transported to consumers during the preceding
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189	189	SECTION 10
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191	191	month and any other information required by the department. The department may
192	192	require remote retail sellers to electronically file returns required under this
193	193	subsection.
194	194	(4) A remote retail seller shall at the time of filing a return required under sub.
195	195	(3) pay to the department the taxes incurred in the preceding month.
196	196	SECTION 11. 139.795 of the statutes is created to read:
197	197	139.795 Permits; remote retail seller. (1) No person may engage in the
198	198	business of a remote retail seller at any place of business, including a legal location
199	199	in any state at which records are kept or accessed by the remote retail seller, unless
200	200	that person has filed an application for and obtained a permit from the department
201	201	to engage in that business at such place.
202	202	(2) Section 139.34 (1) (b) to (f) and (9) applies to the permit under this section.
203	203	SECTION 12. 139.815 of the statutes is created to read:
204	204	139.815 Remote retail sales. No person may make remote retail sales to
205	205	consumers unless all of the following apply:
206	206	(1) The person obtains a remote retail seller permit under s. 139.795.
207	207	(2) If the person's annual gross sales into this state exceed $100,000 in the
208	208	previous calendar year, the person registers with the department and collects the
209	209	taxes administered under s. 77.52 or 77.53 on sales sourced to this state under s.
210	210	77.522 for the entire current calendar year.
211	211	(3) The person collects and remits the tax under s. 139.76.
212	212	(4) The person uses an independent, 3rd-party age verification service that
213	213	compares information available from a commercially available database or
214	214	aggregate of databases that are regularly used by government agencies and business
215	215	for age and identity verification to determine whether a prospective buyer is 21 years
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242	242	SECTION 12 SENATE BILL 835
243	243	of age based on the personal information provided by the prospective buyer during
244	244	the ordering process.
245	245	(5) If the person calculates the amount of tax incurred under s. 139.76 by using
246	246	the average of the actual cost to the remote retail seller of cigars or pipe tobacco
247	247	identified by the same stock keeping unit numbers over the 12 months before
248	248	January 1 of the year of sale, the person does all of the following:
249	249	(a) Annually, no later than December 31, provides to the department a list
250	250	containing the average actual costs and stock keeping unit number of each cigar or
251	251	tobacco product that the person offers for sale.
252	252	(b) If the person offers a cigar or tobacco product that is not represented on the
253	253	list described in par. (a), by the end of the quarter in which the person first offers the
254	254	product, the person provides the department with an updated list that includes the
255	255	stock keeping unit number of the product and the actual cost first paid for the
256	256	product.
257	257	SECTION 13.0Effective date.
258	258	(1) This act takes effect on January 1, 2025.
259	259	(END)
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