Tobacco Products Tax

What definitions apply for purposes of the Wisconsin tobacco products tax law?
What is the tax rate on tobacco products?
Who must obtain a tobacco products permit?
Who pays the tobacco products tax?
How is the tobacco products tax paid?
Where are the tobacco products returns filed?
When are the tobacco products returns due?
Are any tobacco products exempt from the tobacco products tax?
Who may receive a refund or credit of tobacco products tax paid?
How do I correct a tobacco products return that I previously filed?
Am I subject to interest or penalties if I file an incorrect tobacco products return?
Should I notify the Department of Revenue if the business has a change to its name, address, or ownership or if the business ceases operating in Wisconsin?
How can I obtain additional information or forms relating to the tobacco products tax?
What records should I keep for Wisconsin tax purposes, and how long should I keep them?

What definitions apply for purposes of the Wisconsin tobacco products tax law?
- 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, corporation or association.
- Permittee - A person who holds a tobacco products permit issued by the Wisconsin Department of Revenue.

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

Who must obtain a tobacco products permit?

The following persons must obtain a tobacco products permit from the Department of Revenue:

Any person that handles tobacco products at the wholesale level in Wisconsin as a distributor or subjobber.
Retailers who purchase tobacco products from sources outside Wisconsin that do not hold a distributor permit.

Persons who apply for a tobacco products permit must hold a Business Tax Registration (BTR) Certificate [sec. 73.03(50), Wis. Stats.]. The BTR certificate and tobacco products permits are issued by the Excise Section in Madison. There is a one-time $20 charge for the BTR certificate. This certificate is renewable every two years for $10. The BTR certificate and tobacco products permits are valid until canceled by the permittee or revoked by the department. A person need only obtain one BTR certificate regardless of the number of permits or licenses held with the department.

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

Tobacco products found in Wisconsin upon which the tax has not been paid may be confiscated by the Department's Alcohol and Tobacco Enforcement Section [sec. 139.83, Wis. Stats.].

Security required - The department may require persons who are responsible for paying the tobacco products tax to have security (e.g., cash, bond) on file. The amount of security cannot exceed three times a permittee's average monthly liability for tobacco products tax [sec. 139.84, Wis. Stats.].

Who pays the tobacco products tax?
The tobacco products tax is paid by a tobacco products distributor to the department. A distributor may be one of the following [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 the department.
- 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 the department.
Tobacco products use tax - Any person in Wisconsin who acquires tobacco products upon which 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. If the use tax is not paid when due, it is subject to a late-filing penalty (minimum of $10, maximum of 25% of the use tax) and delinquent interest of 1.5% per month [sec. 139.78, Wis. Stats.].
How is the tobacco products tax paid?
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 Report of Tax-Paid Tobacco Products, Form TT-114 (quarterly informational report, no tax owing).
EFT tax payments - Taxes may be paid to the department by electronic funds transfer (EFT). Information about paying by EFT can be obtained from the Electronic Funds Transfer page or by calling (608) 264-9918.
Where are the tobacco products returns filed?
Send the monthly return (Form TT-100) and quarterly informational report (Form TT-114) and remittances to

Wisconsin Department of Revenue
Excise Tax Section
Mail Stop 5-107
P.O. Box 8900
Madison, WI 53708-8900
When are the tobacco products returns 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.]. For example, a return for October is due November 15.

Late filed returns are subject to the following charges:
- Late-filing fee - $10 [sec. 139.82(5), Wis. Stats.].
- Delinquent interest - 1.5% per month [sec. 139.85(1), Wis. Stats.].
- Late-filing penalty - 5% per month, maximum of 25% [sec. 139.85(2), Wis. Stats.].
Important: There are no extensions of time granted if you are unable to file a tobacco products return and pay any amount owing by the due date.
Are any tobacco products exempt from the tobacco products tax?
The Wisconsin tobacco products tax is not imposed upon the following [sec. 139.76(2), Wis. Stats.]:
- Tobacco products shipped to customers in other states via interstate commerce.
- Tobacco products sold to the Armed Forces (e.g., Camp McCoy) 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.
Who may receive a refund or credit of tobacco products tax paid?
A licensed tobacco products distributor can receive a refund or credit on the following [sec. 139.80, Wis. Stats.]:
- Native American Refunds [effective December 1, 1999, per 1999 Wis. Act 9]
  
  Indian tribal councils who have entered into agreements with the State of Wisconsin are eligible for two refunds:
  - 50% of the tobacco products tax paid on tobacco products sold on reservations to enrolled members of the tribe residing on the reservation. The refund claim is sent by the department to tribes at the end of each quarter [secs. 139.803 and 139.805, Wis. Stats.].
  - 50% of the tobacco products tax paid on tobacco products sold by authorized Native American retailers on reservation 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 the department and the tribal council. No more than two refund claims (Form TT-001) can be filed within a calendar month [secs.139.803 and 139.805, Wis. Stats.].
How do I correct a tobacco products return that I previously filed?
To change a return previously filed, send your corrected return and/or schedules labeled "corrected" or "amended" to the following address:

Wisconsin Department of Revenue
Excise Tax Section
Mail Stop 5-107
P.O. Box 8900
Madison, WI 53708-8900
Am I subject to interest or penalties if I file an incorrect tobacco products return?
The following interest and discretionary penalty may be applied when you file incorrect tobacco products returns:
- Unpaid taxes bear interest at the rate of 12% per year [sec. 139.85(1), Wis. Stats.].
- Refunded taxes bear interest at the rate of 9% per year [sec. 139.85(1), Wis. Stats.].
- Negligence penalty of 25% of the tax is imposed if there is negligence in filing a return [sec. 139.85(1), Wis. Stats.].
Should I notify the Department of Revenue if the business has a change to its name, address, or ownership or if the business ceases operating in Wisconsin?
You must notify the Department of Revenue when your business has any change to its name, address, or ownership, or when you cease operating in Wisconsin. You can notify the department by letter or by attaching a note to your return. If your name or ownership changes, or you receive a different Federal Employer Identification Number (FEIN), you must file a new application with the Department and update your security. When you cease operations, you must to file a return for the last month (or quarter) of operations even if you were in business only a few days during that period. Call (608) 261-6435 if you have any questions about your tobacco products tax permit.
How can I obtain additional information or forms relating to the tobacco products tax?
Contact the following department offices to receive more information or forms regarding Wisconsin's tobacco products tax:

Wisconsin Department of Revenue
Excise Tax Section
Mail Stop 5-107
P.O. Box 8900
Madison, WI 53708-8900

Registration and Security
(608) 261-6435

Filing Returns, Paying Tax, Forms, and Other Information
(608) 266-8970 or 261-8985
Fax: 608) 261-7049
E-Mail Additional Questions
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 pertaining to your business for at least four years so the department can determine how you computed your tax liabilities [secs. 139.82(1) and 139.83, Wis. Stats.]. The required records include, but are not limited to, your purchases, receipts, inventories, sales (whether taxable or exempt), distribution, and consumption of products. The records must be stored on the premises described in the permit and in a manner easily accessible for review by department representatives. When records are not maintained, the department presumes that all products you purchase or receive are subject to tax without benefit of any deductions.

FOR MORE INFORMATION PLEASE CONTACT:

WISCONSIN DEPARTMENT OF REVENUE
Excise Tax Section
Mail Stop 5-107
P.O. Box 8900
Madison, WI 53708-8900
Phone: (608) 266-8970
Fax: (608) 261-7049
E-Mail Additional Questions

Last updated November 6, 2009

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Tobacco Products Tax

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