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?
From October 1, 2001, through December 31, 2007, the tax rate on tobacco products is 25% of the manufacturer's established list price without reduction for volume or other discounts. For periods after January 1, 2008, the tax rate on tobacco products is 50% of the manufacturer's established list price without reduction for volume or other discounts except on moist snuff and cigars. The tax rate on moist snuff rate is $1.31 per ounce. The topbacco tax on cigars is the lower of either:
- 50% of the manufacturer's established list price to distributors (prior to any reduction for volume or discount); OR
- $0.50 per single cigar [sec. 139.76, Wis. Stats., effective January 1, 2008].

Inventory tax: An inventory tax is imposed on all distributors who have moist snuff in inventroy as of January 1, 2008 and the tax had been previously paid [sec. 139.76, Wis. Stats.].

Who must obtain a tobacco products permit?

The following persons must obtain a tobacco products permit:

Any person who wants to handle tobacco products at the wholesale level in Wisconsin as a distributor or subjobber must obtain a permit from the Department of Revenue.
Retailers who purchase tobacco products from sources outside Wisconsin that do not hold a distributor permit must obtain a distributor permit and pay the tax to the Department.

Persons who want 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, (608) 261-6435. 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 & 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 with a monthly return by distributors [sec. 139.77(1), Wis. Stats.]. The three different tobacco products returns are as follows:
- Wisconsin Distributor's Tobacco Products Tax Return, Form TT-100.
- Wisconsin Distributor's Tobacco Products Tax Return - Out-of-State Permittees, Form TT-105.
- Subjobbers Report of Tax-Paid Tobacco Products, Form TT-114 (quarterly informational report, no tax owing).
EFT tax payments - Taxes can 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 returns (Forms TT-100 and TT-105) and remittances to:

Wisconsin Department of Revenue
Box 93640
Milwaukee, WI 53293-0640

Send the quarterly informational reports (Form TT-114) to:

Wisconsin Department of Revenue
Excise Tax Section
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.].
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 tobacco products distributor can receive a refund or credit on the following [sec. 139.80, Wis. Stats.]:
- Distributor Credits [sec. 139.80, Wis. Stats.]
  Licensed tobacco products distributors can receive credit on their monthly returns for the following:
  - 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) 266-8970 for requirements that must be met in order to destroy tobacco products and claim a tax credit.
- Native American Refunds [effective December 1, 1999, per 1999 Wis. Act 9]
  
  Indian tribal councils who have entered into agreements with the State 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 Indian 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. 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?
If you need to change a return previously filed, send your corrected return and/or schedules labeled "corrected" or "amended" to the following address:
- Tax due on corrected return (Forms TT-100 and TT-105)
  Send return plus your remittance to:
  
  Wisconsin Department of Revenue
  Box 93640
  Milwaukee, WI 53293-0640
- No tax owing or refund due on corrected return (Form TT-100, TT-105 or TT-114)
  Send return to:
  
  Wisconsin Department of Revenue
  Excise Tax Section
  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 be sure 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:
- Registration and Security
  
  Wisconsin Department of Revenue
  Excise Tax Section
  P.O. Box 8900
  Madison, WI 53708-8900
  (608) 261-6435
  FAX: (608) 261-7049
  E-Mail Additional Questions
- Filing Returns, Paying Tax, Forms, and Other Information
  
  Wisconsin Department of Revenue
  Excise Tax Section
  P.O. Box 8900
  Madison, WI 53708-8900
  (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 4 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 January 8, 2008

Wisconsin Department of Revenue

Main Navigation Links

Tobacco Products Tax

FOR MORE INFORMATION PLEASE CONTACT: