Tobacco Products Tax

  1. What are the definitions of "tobacco products," "moist snuff," "person" and "permittee?"
  2. What is the tax rate on tobacco products?
  3. Do I need a permit to handle tobacco products?
  4. What requirements does a retailer need to meet to sell tobacco products to consumers in the State of Wisconsin?
  5. Who pays the tobacco products tax?
  6. What is the tobacco products use tax?
  7. How do I pay the tobacco products tax?
  8. How do I file my tobacco products return?
  9. What should I do if filing electronically causes a hardship?
  10. When is the tobacco products return due?
  11. Are any tobacco products exempt from the tobacco products tax?
  12. Will the Wisconsin Department of Revenue (DOR) refund or credit any tobacco products taxes I paid?
  13. How do I correct a tobacco products return I already filed?
  14. If I file an incorrect tobacco products return, will I have to pay interest or penalties?
  15. Should I notify DOR if the business has a change to its name, address, or ownership or if the business no longer operates in Wisconsin?
  16. What records should I keep for Wisconsin tax purposes, and how long should I keep them?
  17. How can I get additional information regarding tobacco products tax?

  1. What are the definitions of "tobacco products", "moist snuff", "person" and "permittee"?
    • Tobacco products - Wisconsin law defines tobacco products as cigars, cheroots, granulated, plug cuts, snuff, chewing tobacco, clippings, and other forms of tobacco prepared in such a manner as to be suitable for chewing or smoking in a pipe or otherwise. The definition includes tobacco that can be used for "roll your own" cigarettes, but it does not include cigarettes [sec. 139.75(12), Wis. Stats.].
    • Moist snuff- Any finely cut, ground, or powdered smokeless tobacco that is intended to be placed or dipped in the mouth.
    • Person - The term includes a natural person, sole proprietorship, partnership, limited liability company (LLC), corporation or association.
    • Permittee - A person who holds a tobacco products permit issued by the Wisconsin Department of Revenue (DOR).
  2. What is the tax rate on tobacco products?

    Tax Type
    Prior to January 1, 2008
    January 1, 2008 to August 31, 2009
    September 1, 2009 and thereafter
    Tobacco Products

     

     

    25% of manufacturer's established list price to distributors

    50% of manufacturer's established list price to distributors

    71% of manufacturer's established list price to distributors
    Moist Snuff $1.31 per ounce 100% of manufacturer's established list price to distributors
    Cigars Lesser of 50% of manufacturer's established list price to distributors or $0.50 per cigar Lesser of 71% of manufacturer's established list price to distributors or $0.50 per cigar
  1. Do I need a permit to handle tobacco products?

    Yes. If one of the following applies, you must have a permit to handle tobacco products:

    1. You handle tobacco products at the wholesale level in Wisconsin as a distributor or subjobber.
    2. You are a retailer who purchases tobacco products from sources outside Wisconsin that do not hold a distributor permit.

    If you apply for a tobacco products permit, you must hold a Business Tax Registration (BTR) Certificate [sec. 73.03(50), Wis. Stats.].

    To apply for a BTR Certificate and a beverage permit:

    • Call the Excise Tax Unit at: (608) 266-6701.

    BTR Certificate

    • There is a $20 registration fee for the BTR Certificate.
    • The certificate is renewable every two years for $10.

    Note: The BTR certificate and tobacco products permits are valid until canceled by the permittee or until revoked by the department. You only need one BTR certificate regardless of the number of permits or licenses you hold with DOR.

    DOR issues these wholesale tobacco products permits

    Types of Wholesale Permits / (Account Prefix) Statute Fee Term of Permit
    Wisconsin distributor (405) sec. 139.79 none 2 years
    Wisconsin subjobber (406) sec. 139.79 none 2 years
    Out-of-state distributor (411) sec. 139.79 none 2 years
    Wisconsin and out-of-state tobacco products salespersons sec. 139.81 none 2 years

    If you are a permittee and purchased tobacco products from an out-of-state wholesaler that does not hold a permit with DOR, our Alcohol & Tobacco Enforcement Unit may confiscate the tobacco products [sec. 139.83, Wis. Stats.].

    • Security required
      • If you are responsible for paying the tobacco products tax, you must have security (e.g., cash, bond) on file with DOR.
      • The amount of security cannot exceed three times a permittee's average monthly liability for tobacco products tax [sec. 139.84, Wis. Stats.].
  2. What requirements does a retailer need to meet to sell tobacco products to consumers in the State of Wisconsin?

    As a retailer, you must meet the following requirements for all tobacco products sold to Wisconsin consumers:

    • You must purchase and sell tobacco products with Wisconsin excise tax included (in the purchase/sales price).
    • You must hold a valid license to sell tobacco products to consumers in Wisconsin.  Licenses are issued by the municipality (city, village or town) for each location where tobacco products are received and stored for sale to consumers.  You must contact the clerk for the city, village or town where you want to do business and apply for the tobacco products retail license with the clerk.
    • You may not sell/transfer tobacco products to another retailer, wholesaler or location, even if owned by the same person, unless you hold a valid tobacco products wholesale (distributor or subjobber) permit with the department.  All sales/transfers of tobacco products require an invoice showing the seller to the purchaser as permitted or licensed (legal name, doing business as name, and business address).

    As a licensed retailer, you are required to purchase your tobacco products for sale to Wisconsin consumers from permitted wholesalers (distributors or jobbers) who sell tobacco products on which the Wisconsin excise taxes have been paid. If the wholesaler is not reimbursed by the retailer for the sale of the tax-included tobacco products, the department may bill the retailer for the portion of tax unpaid to the wholesaler on which they claimed credit from the state. Tobacco products possessed and/or offered for sale to consumers in this state on which the tobacco products tax has not been paid is unlawful property and subject to seizure.

  3. Who pays the tobacco products tax?

    The following permittees pay DOR the tobacco products tax [sec. 139.76(1), Wis. Stats.]:

    • Any person in Wisconsin who acquires tobacco products for sale or resale from sources that do not hold a valid distributor or subjobber permit with us.
    • Any person who manufactures tobacco products in Wisconsin for sale in Wisconsin.
    • Any person outside Wisconsin who ships tobacco products to persons in Wisconsin who do not hold a valid tobacco products distributor permit with us.
  4. Who pays the tobacco products use tax?
    • Any person in Wisconsin who acquires tobacco products and the Wisconsin tobacco products tax is due and has not been paid, must file a use tax return (Form TT-104S).
    • The use tax rate is the same rate as the Wisconsin tobacco products tax.
    • The return and use tax are due 15 days after the close of the month in which the tobacco products are acquired. Example: a return for October is due by November 15.
  5. How do I pay the tobacco products tax?

    The tobacco products tax is paid by distributors or reported by subjobbers with one of the following returns [sec. 139.77(1), Wis. Stats.]:

    • Wisconsin Distributor's Tobacco Products Tax Return, Form TT-100.
    • Subjobbers Quarterly Report of Tax-Paid Tobacco Products, Form TT-114 (quarterly informational report, no tax owing).

    Note: You can pay your taxes by electronic funds transfer (EFT). For more information, visit the Electronic Funds Transfer page or contact us at (608) 264-9918.

  6. How do I file my tobacco products return?

    You are required to file all tobacco products tax reports and returns electronically. For more information, visit the cigarettes and tobacco products tax page revenue.wi.gov/html/cigtob1.html.

  7. What should I do if filing electronically causes a hardship?

    If the Secretary of Revenue determines the requirement causes a hardship, the Secretary may waive your requirement to file electronically. If you feel filing electronically causes you a hardship, you must request a waiver.

    To request a waiver, you must do the following:

    • Request the waiver in writing. Mail your written request to:

      Mandate Waiver Request MS 5-77
      Wisconsin Department of Revenue
      PO Box 8949
      Madison, Wisconsin 53708-8949
    • Clearly state why the requirement causes a hardship.
    • The Secretary of Revenue may consider the following factors when deciding if this requirement causes a hardship:
      1. An unusual circumstance that may prevent you from filing electronically.
        Example: You do not have access to a computer connected to the Internet.
      2. Any other factor the Secretary determines is relevant.
    • If you have any  questions, contact us at (608) 266-6701.
  8. When is the tobacco products return due?

    All returns are due by the 15th day of the month following the month or quarter covered by the return [sec. 139.82(2), Wis. Stats.]. Example: a return for October is due November 15.

    If you file a late return, you will be charged:

    • Late-filing fee - $10 [sec. 139.82(5), Wis. Stats.].
    • Delinquent interest - 1.5% of the amount of tax due with the return per month until paid [sec. 139.85(1), Wis. Stats.].
    • Late-filing penalty - 5% of the amount of tax due with the return per month until paid, maximum of 25% [sec. 139.85(2), Wis. Stats.].
  9. Are any tobacco products exempt from the tobacco products tax?

    Yes. The following are exempt from the Wisconsin tobacco products tax [sec. 139.76(2), Wis. Stats.]:

    • Tobacco products shipped by interstate commerce to customers in other states.
    • Tobacco products sold to the Armed Forces (e.g., Fort McCoy, Coast Guard stations, etc.) or state or federally operated veterans' hospitals.
    • Tobacco products sold to interstate carriers of passengers for hire to be resold to bona fide passengers being transported.
  10. Will DOR refund or credit any tobacco products taxes I paid?

    Yes. There are distributor refunds/credits and Tribal refunds:

    1. Distributor Refunds/credits – a licensed tobacco products distributor can receive a refund or credit on the following [sec. 139.80, Wis. Stats.]:
      • Tobacco products shipped to customers outside Wisconsin.
      • Tobacco products returned to the manufacturer and/or short shipments.
      • Tobacco products destroyed due to damage or becoming unfit for sale. Call (608) 266-6701 for requirements that must be met to destroy tobacco products and claim a tax credit.
    2. Tribal Refunds [effective December 1, 1999, per 1999 Wis. Act 9]:
      If your Tribal council entered into agreements with the State of Wisconsin, your Tribe is eligible for two refunds:
      • 50% refund – the Tribal council can receive a 50% refund of the tobacco products tax paid for tobacco products sold by authorized retailers to enrolled tribal members living on the reservation or on trust land over which the Tribe has jurisdiction. The land must have been designated a reservation or trust land on or before January 1, 1983, or on a later date as determined by an agreement between DOR and the Tribal council. The Tribe must send the refund claim to DOR at the end of each quarter [secs. 139.803 and 139.805, Wis. Stats.].
      • 50% refund – a Tribal council can receive a 50% refund of the tobacco products tax paid on tobacco products, sold by authorized Tribal retailers on reservation or trust land, over which a Tribe has jurisdiction. The land must have been designated a reservation or trust land on or before January 1, 1983, or on a later date as determined by an agreement between DOR and the Tribal council. Only two refund claims (Form TT-001) may be filed within a calendar month [secs.139.803 and 139.805, Wis. Stats.].
  11. How do I correct a tobacco products return I already filed?
    • You must electronically file an amended return. You are required to electronically file all tobacco products tax reports, returns and amended returns, with us (see question #8).
    • If you are filing an amended tobacco products tax return, you must file a true, corrected and complete return. Include all previously reported unchanged transactions.
    • Do not file a return that only reports the changes.
  12. If I file an incorrect tobacco products return, will I have to pay interest or penalties?

    Yes. If you file an incorrect tobacco products return, the following will be imposed:

    • Unpaid taxes – 12% interest per year [sec. 139.85(1), Wis. Stats.].
    • Refunded taxes – 3% interest per year [sec. 139.85(1), Wis. Stats.].
    • Negligence penalty – 25% of the tax if there was negligence in filing a return [sec. 139.85(1), Wis. Stats.].
  13. Should I notify DOR if the business has a change to its name, address, or ownership or if the business no longer operates in Wisconsin?

    Yes. You must notify us when your business has any change to its name, address, or ownership, or when you stop operating in Wisconsin.

    • You can tell us by letter or attach a note to your return.
    • If your name or ownership changes or you receive a new Federal Employer Identification Number (FEIN), you must file a new application and update your security.
    • When you end operations, you must file a return for the last month (or quarter) of operations even if you were in business only a few days during that period.
    • If you have any questions about your tobacco products tax permit, contact us at (608) 266-6701.
  14. What records should I keep for Wisconsin tax purposes and how long should I keep them?
    • You must keep a complete copy of your tobacco products tax returns and all records related to your business for at least four years so we can verify your tax liabilities [secs. 139.82(1) and 139.83, Wis. Stats.].
    • Required records include, but are not limited to: purchases and sales, receipts (whether taxable or exempt), inventories, distribution, and consumption of products.
    • You must keep your records organized and in a place available for review by DOR. Records must be available for inspection at all reasonable hours, including all business hours.
    • If you do not maintain your records, all products purchased or received are subject to tax without benefit of any deductions.
  15. How can I get additional information regarding tobacco products tax?

    FOR MORE INFORMATION PLEASE CONTACT:

      Excise Tax Unit
      Wisconsin Department of Revenue
      PO Box 8900
      Madison, WI 53708-8900
      Phone: (608) 266-6701
      Fax: (608) 261-7049
      Email: DORExciseTaxpayerAssistance@revenue.wi.gov

Last updated January 6, 2014