Overview of Alcohol & Tobacco Unit

1

Special Agents Jason Lee & Rick Uhlig

Wisconsin Department of RevenueAlcohol & Tobacco Enforcement Unit

June 23, 2016

Special Agents Jason Lee & Rick Uhlig

Wisconsin Department of RevenueAlcohol & Tobacco Enforcement Unit

June 23, 2016

Overview of Alcohol & Tobacco Unit

Dept of Taxation, Beverage & Cigarette Tax Division

Created in 1933

2

2016 AgentTerritories2016 AgentTerritories

9 Enforcement Agents

1 Special Agent in Charge-Tyler Quam

9 Enforcement Agents

1 Special Agent in Charge-Tyler Quam

RETIRED RETIRED

3

Community with the highest density of alcohol licenses in the state of WI?Community with the highest density of alcohol licenses in the state of WI?

ALCOHOL INFORMATIONALCOHOL INFORMATION

The City of Green Lake has 1 alcohol license for about every 80 persons— NOT THE WINNER(12 licenses and population of 960)

The City of Green Lake has 1 alcohol license for about every 80 persons— NOT THE WINNER(12 licenses and population of 960)

City of Green Lake??City of Green Lake??

4

Community with the highest density of alcohol licenses in the state of WI?Community with the highest density of alcohol licenses in the state of WI?

Approximately 17,000 alcohol licensed outlets in WI(12,500 taverns/restaurants)

ALCOHOL INFORMATIONALCOHOL INFORMATION

The Village of Egg Harbor has 1 alcohol license for about every 10 persons (21 licenses and population of 201)The Village of Egg Harbor has 1 alcohol license for about every 10 persons (21 licenses and population of 201)

EGG HARBOREGG HARBOR

6

TAX INFORMATIONTAX INFORMATION

Total excise tax liquor, beer, cigs & tobacco

Over $699 Million, fy 2015Over $699 Million, fy 2015

Wisconsin beer tax has not increased since 1969Wisconsin beer tax has not increased since 1969

Wisconsin cigarette tax ________ per pack?Wisconsin cigarette tax ________ per pack?

$2.52 $2.52 Cigarette taxes alone generate almost $569 million

Liquor Administrative Fee= $.029 per literLiquor Administrative Fee= $.029 per liter

$1,626,891.90$1,626,891.90

7

LICENSING BASICSLICENSING BASICSAlcohol laws found in State Statutes 125 & 139.

BEER: A fermented malt beverage containing .5% or more of alcohol by volume.

INTOXICATING LIQUOR OR LIQUOR: All other alcohol beverages containing .5% or more alcohol by volume, and all wines.

ALCOHOL BEVERAGES: A statutory term which includes beer, wine and liquor.

What am I??

8

LICENSE ‐‐ A license is a privilege granted by localauthorities (city, village or township) to run a particularplace for a particular time period.

-may “extend” premises with approval of governing body

An alcohol license, like a drivers license, can only be used by the person to whom it is issued.

A municipality may refuse to issue licenses as long as it uses good judgment and doesn’t discriminate.

THERE IS NO RIGHT TO AN ALCOHOL LICENSE IN WISCONSIN.

IT IS A PRIVILEGE.

9

No person may “sell” alcohol without holding the appropriate license.

No person may “give away” alcohol to evade any law relating to the sale of alcohol.

LICENSING BASICSLICENSING BASICS

“Sale” or “Sell” - includes any transfer of alcohol or any shift, scheme, device or transaction to obtain alcohol beverages. S.S.125.02(20)

Examples: admission to enter,"donation" jar,buying a cup, buying the mix, trespass fee.

SELL = DISPENSE


10

No owner or person in charge of a public placemay permit the consumption of alcohol on the premises unless the person has an appropriate license or permit.

SS.125.09(1)

- Spas, Nail Salons serving wine to customers.- Spas, Nail Salons serving wine to customers.- Furniture Stores offering bottles of wine with purchase.- Men’s Night at jewelry stores with beer for shoppers.- Art galleries providing wine for viewers.- Funeral homes having alcohol available for grieving persons.


Licenses required for these?:

11

Application Process ss 125.04

State Required Steps:

--Sworn application form filed with municipal clerk at least 15 days prior to granting.

--Municipal publication of the application in local newspaper prior to issuance.

Renewals?Temporary/Picnic Licenses?

--Vote by municipal governing body grantinglicense

--Issuance of license by Clerk

Application Process

Municipalities may require more of their applicants:

-Supplemental License Applications

-Must contact the Alderperson, Neighborhood Association and/or Police Department prior to council/board meeting

-Business plan

-Provide copy of Seller's Permit/Business Tax Registration

12


Individual or Partnership -- John Doe or John & Jane Doe (Actual persons)

Corporation or Limited Liability CompanyABC Inc or ABC LLCMust appoint an “Agent” Name of Corp/LLC AND Agent on license

Individual or Partnership -- John Doe or John & Jane Doe (Actual persons)

Corporation or Limited Liability CompanyABC Inc or ABC LLCMust appoint an “Agent” Name of Corp/LLC AND Agent on license

Seller’s Permit

Required for any place that sells taxable goods orservices.

Required for any place that sells taxable goods orservices.

Failure to possessa valid Seller’s Permit is a crimeunder SS 77.52(12)

Failure to possessa valid Seller’s Permit is a crimeunder SS 77.52(12)

License may notbe issued w/o proofof Seller's Permitper 77.61(11)

14

Ma’s Bar

15

1100.00

AnytownAnywhere

ABC Incorporated50.00

50.00

Quicky Mart Store

June 1 2014 May 31 2015

AnytownAnywhere

25th May 2014Rick Uhlig

_____


Persons, including ALL members of a corporation or LLC, must meet certain requirements to receive a license.

These requirements relate to:

Persons, including ALL members of a corporation or LLC, must meet certain requirements to receive a license.

These requirements relate to:

Arrest or conviction record (habitual law offender or felony)Arrest or conviction record (habitual law offender or felony)

State residency (AGENTS=YES OFFICERS=NO)State residency (AGENTS=YES OFFICERS=NO)

State Sellers PermitState Sellers Permit

Responsible beverage server training (Corp/LLC officers do not) Responsible beverage server training (Corp/LLC officers do not)

16

TYPES OF ALCOHOL LICENSESTYPES OF ALCOHOL LICENSES

CLASS A‐ “away” Sale for off premises consumption

Current law allows a Class A to permit wine & beer sampling

NO State quota on Class A licenses, may issue as many as municipality wants to issue-can self impose a quota by ordinance.

Can be issued for beer, or liquor, or both in combination.

Do not need to hold Class A beer to be issued Class A liquor.

Must have licensed operator on site making or supervising all sales.

TYPES OF ALCOHOL LICENSESTYPES OF ALCOHOL LICENSES

CLASS A‐ CiderCurrent law allows for a Class A-Cider license:

• Must hold a Class "A"-Beer License• No Fee for the Cider License• If you hold a Class "A" Beer License you

qualify for a Cider License• Must be published and approved by Board

(Can charge actual cost of publication)• (Cider must be made from apples or pears)

17

TYPES OF ALCOHOL LICENSESTYPES OF ALCOHOL LICENSESCLASS B‐ “bar” Sale for on premises or off premises.Class B beer only, or Class B liquor and beer combination. Must issue Class B beer to receive Class B Liquor license-- unless issued to a permitted Winery.

To go sales are allowed and must be in the original, unopened container—-beer and wine sealed container sales allowed in any quantity.-liquor up to 4 liters of sealed container sales allowed if allowed by

ordinance.

Must have licensed operator on site making or supervising all sales.

State Quota on how many Class B LIQUOR licenses you can issue.

Regular Class B vs. Reserve Class B

Regular Class B Intoxicating liquor licenses—

Your number of Regular "Class B" Licenses was set December 1, 1997. (grandfathered)

WI DOR does not maintain this number, your municipality does.

Your number of Regular "Class B" Licenses will not change.

18


Reserve Class B Intoxicating liquor licenses—

Your initial number of Reserve "Class B" Licenses was set December 1, 1997.Add one additional Reserve License for each population increase of 500 since 1997.

Your QUOTA equals Regular "B" + Reserve "B" licenses.


Your initial number of Reserve "Class B" Licenses was set December 1, 1997.Add one additional Reserve License for each population increase of 500 since 1997.

Your QUOTA equals Regular "B" + Reserve "B" licenses.

19



Minimum $10,000 initial issuance fee.Cannot transfer license to different premises.If new owner/entity, then new fee applies.


Minimum $10,000 initial issuance fee.Cannot transfer license to different premises.If new owner/entity, then new fee applies.

2015 Wis. Act 286

Effective June 1, 2016:

"Titletown" legislation provides a municipality may grant up to 2 additional Reserve "Class B" Licenses to an economic development district which meets certain conditions. (Minimum initial issuance fee of $30,000)

Reserve license initial issuance fees cannot be refunded or rebated by a municipality. Includes restriction on any refunds (grants, tax credits, etc.)


"Titletown" legislation provides a municipality may grant up to 2 additional Reserve "Class B" Licenses to an economic development district which meets certain conditions. (Minimum initial issuance fee of $30,000)

Reserve license initial issuance fees cannot be refunded or rebated by a municipality. Includes restriction on any refunds (grants, tax credits, etc.)

20

2015 Wis. Act 286 Effective June 1, 2016:

Municipalities can make an agreement to transfer available Reserve "Class B" Licenses to another municipality:

Must be contiguous with, or within 2 miles

May not transfer more than 3 Reserve Licenses

Quota is adjusted ‐1 and +1 respectively

Transferring municipality receives the initial fee

Transferring municipality must have at least one "Class B" issued.


Municipalities can make an agreement to transfer available Reserve "Class B" Licenses to another municipality:

Must be contiguous with, or within 2 miles

May not transfer more than 3 Reserve Licenses

Quota is adjusted ‐1 and +1 respectively

Transferring municipality receives the initial fee

Transferring municipality must have at least one "Class B" issued.

Above Quota Class B Liquor Licenses

These are not Regular or Reserve Class B Liquor Licenses, they are licenses issued above your quota (must not have any Regular or Reserve Class B available, you set the fees):

Full-service restaurant with at least 300 seats.

Hotel with at least 50 rooms and, either 150 seat restaurant or 400 person banquet room.

An opera house or theater for the performing arts operated by a non-profit organization.

Six other "special" locations listed in statutes that qualify.

Above Quota Class B Liquor Licenses

These are not Regular or Reserve Class B Liquor Licenses, they are licenses issued above your quota (must not have any Regular or Reserve Class B available, you set the fees):

Full-service restaurant with at least 300 seats.

Hotel with at least 50 rooms and, either 150 seat restaurant or 400 person banquet room.

An opera house or theater for the performing arts operated by a non-profit organization.

Six other "special" locations listed in statutes that qualify.

21

2015 Wis. Act 286


"Titletown" legislation included new language regarding 300 seat restaurant "Above Quota" licenses.

Provides an Above Quota "Class B" liquor license may be issued to "A full‐service restaurant that has a an interior, permanent seating capacity of 300 or more persons."—The "interior, permanent" seating applies to licenses initially issued AFTER June 1, 2016.


"Titletown" legislation included new language regarding 300 seat restaurant "Above Quota" licenses.

Provides an Above Quota "Class B" liquor license may be issued to "A full‐service restaurant that has a an interior, permanent seating capacity of 300 or more persons."—The "interior, permanent" seating applies to licenses initially issued AFTER June 1, 2016.


And FINALLY‐One last Class B Liquor=

"Class B" Liquor License issued to a permitted and qualified Winery…

• Does not count toward any quota.

• Is valid only for wine, not any other intoxicating liquor.

• Is for the sale of open or sealed containers of wine.

• Winery must be capable of producing 5000 gallons of wine per year to qualify.

And FINALLY‐One last Class B Liquor=

"Class B" Liquor License issued to a permitted and qualified Winery…

• Does not count toward any quota.

• Is valid only for wine, not any other intoxicating liquor.

• Is for the sale of open or sealed containers of wine.

• Winery must be capable of producing 5000 gallons of wine per year to qualify.

22

Why can't I have a Class B here?State Statute 125.32(3m) limits the "other business" that may be conducted at a Class B.Exceptions exist for:

*Hotel,*Restaurant,*Combination grocery store AND tavern,*Combination sporting goods store AND tavern

in towns, villages and 4th class cities,*Combination novelty store AND tavern,*Bowling center or "recreation premises",*Club, society or lodge in existence for 6 months or

more prior to the date of filing application,*Movie theater,*PAINTING STUDIO*PREMISES PARTICIPATING IN A WINE WALK

TYPES OF ALCOHOL LICENSESTYPES OF ALCOHOL LICENSESCLASS C ‐‐ allows restaurants to sell wine only.

May NOT sell unopened bottles to go.Don't need to be up to quota to issue Class C.

Temporary B Licenses ‐‐ allows bona fide clubs, and chambers of commerce, churches,lodges or societies to sell beer or wine (Wine limited to 2 per year) at a particular gathering.

`(The term "non-profit" is not used in statute)

Often referred to as “picnic” license.

Rules very similar to regular Class B license.

23

Temporary B-Wine Walk LicensesTemporary B-Wine Walk Licenses2015 Wis. Act 62- (Effective October 23, 2015)

A qualified group can receive up to 20 Temporary Class B beer and/or wine licenses for a single day, multiple location event

being sponsored by the group.

An admission fee must be charged for participation in the event, and no separate fees for service of the beer or wine charged.

Can only hold two (2) such events in any 12-month period -- by any group in the municipality (same group could sponsor both).

9:00PM Closing Hour

HOURS OF SALE Class A premises may not sell:

Beer – Midnight to 6:00 AM

Liquor – 9:00 PM to 6:00 AM

• Municipalities MAY impose MORE restrictive hours

• Municipalities MAY NOT impose LESS restrictive hours

Class B premises may not sell: Beer & Liquor – 2:00 AM – 6:00 AM; Monday – Friday

Beer & Liquor – 2:30 AM – 6:00 AM; Saturday & Sunday

Carryout sales must cease at 12:00 AM

• Municipalities MAY impose MORE restrictive carryout hours

24

ALCOHOL SAMPLINGALCOHOL SAMPLINGSS 125.06(13) authorizes sampling of WINE at “Class A”

premises.

SS 125.25(1) authorizes sampling of FERMENTED MALT BEVERAGES at Class “A” premises.

Free of chargeFree of chargeNot to exceed 3 fluid ounces/sampleNot to exceed 3 fluid ounces/sample2 samples per day per person2 samples per day per personHours 11 am to 7 pmHours 11 am to 7 pm

ALCOHOL SAMPLINGALCOHOL SAMPLINGSS 125.51(2)am authorizes sampling of LIQUOR at

"Class A” premises.

Free of chargeFree of chargeNot to exceed .5 fluid ounces/sampleNot to exceed .5 fluid ounces/sample1sample per day per person1sample per day per person

Hours 11 am to 7 pmHours 11 am to 7 pm

25

O'DOUL'S OR SIMILAR BEERS ?

License needed?

Products such as O’Douls, Sharps and others are not considered alcohol beverages under Wisconsin Law.

They may be sold to anyone.

No alcohol license required.

A person must be at least 18 years old to sell or serve alcohol and/or be issued an Operators' license.

An Operators' License is valid only within the municipality where issued, but it can be used anywhere in that municipality.

A current Operator’s License issued in one municipality does not automatically guarantee approval in a second municipality.

(A current Operator’s license from Community A can substitutefor proof of training when applying in Community B)

26

Municipalities may establish specific internal criteria for operators, not in conflict with state law. However, municipalities may not require operators' licenses for any purposes other than those provided for in state law.

Municipalities should conduct background checks prior to issuing operators' licenses.

Proof of Responsible Beverage Server Training required. (When needed?)

Who has "privilege" to bartend without a license?

LICENSING BASICSLICENSING BASICSState law 139.08(4) provides that licensed premises

are subject to inspection at “all reasonable hours”.

-inspection may include books, papers and records.

-refusal to permit inspection may result in suspension or revocation of license or criminal charges.

-inspection may be conducted by DOR, DOJ, sheriff,police, marshal or constables.

27

Recent LegislationRecent Legislation

Commercial Quadricycles (Pedal Pubs) legal Jan 2014Exception made to Public Place statute

Under 125.10(5) municipalities may prohibit consumption of alcohol on commercial quadricycles"Open Container" ordinances enacted prior to 1/1/2014 do not prohibit consumption of alcohol on commercial quadricycles

What could possibly go wrong?

28

Recent legislationRecent legislation

2015 Act 221- Indoor golf and baseball facilities now have exemptions for allowing underage on premises and closing hours.

2015 Act 339 - Only the server may be issued a citation for serving underage person who is part of a compliance check, not the licensee.

2015 Act 372 - Repeals 125.05, local referendum not required to issue retail alcohol licenses (dry municipalities are now determined by the board). Authorized electronic invoices for alcohol retailers.

2015 Act 221- Indoor golf and baseball facilities now have exemptions for allowing underage on premises and closing hours.

2015 Act 339 - Only the server may be issued a citation for serving underage person who is part of a compliance check, not the licensee.

2015 Act 372 - Repeals 125.05, local referendum not required to issue retail alcohol licenses (dry municipalities are now determined by the board). Authorized electronic invoices for alcohol retailers.

Recent legislationRecent legislation

2015 Act 193- Repealed Wisconsin Drug Tax.

2015 Act 279 - Provides legal protections to underage person who has been consuming alcohol but calls law enforcement or medical assistance to report sexual assaults.

2015 Act 193- Repealed Wisconsin Drug Tax.

2015 Act 279 - Provides legal protections to underage person who has been consuming alcohol but calls law enforcement or medical assistance to report sexual assaults.

29

CIGARETTE/TOBACCO LICENSING

State created form.

Not required to usefor local licensing.

State created form.

Not required to usefor local licensing.

31

ME

NHVT

NY

PA

VAWV

OH

MI

IN

KY

WI

IL

MN

IA

ND

SD

NE

KS MO

NC

SCTN

GAALMS

LA

AROK

TX

NMAZ

CA

NV

UT CO

AK

WY

ID

OR

WA

MT

HI

DC

3.025

1.31

1.70

.57

.44

1.53

.60

2.90

1.36

.87

.80

1.70

2.00 1.66

.84

.64

.79

1.03

.17

1.15

1.41 .36

.68

2.00

.37.425

.57

.45.62

.60

1.98 .9951.25

.30 2.50

DE 1.60

NJ 2.70

CT 3.40

RI 3.50

MA 3.51

.55

2.52

2.00

2.002.751.78

4.35

1.60

MD 2.00

$3.20

STATE EXCISE TAX RATE ON CIGARETTES20 Cigarette Pack

NO TAX STAMP ON PACKS

01/2015 Taxadmin.org

1.33

33

CIGARETTES/TOBACCO LAWSCIGARETTES/TOBACCO LAWS

Roll your own shops have closed for the most part. Any in your communities?

Delivery and sales of untaxed Native brand cigarettes have been halted.

CIGARETTES/TOBACCO LAWSCIGARETTES/TOBACCO LAWS

2015 Wis. Act 275- (Effective May 1, 2016)Provides procedures for revocation and

suspension of cigarette and tobacco retail licenses by 1st Class Cities.

"A city, village, or town may adopt an ordinance regulating the issuance, suspension, revocation, or renewal of a license under this section only if the ordinance strictly conforms to this section. If a

city, village, or town has in effect on May 1, 2016 an ordinance that does not strictly conform to this section, the ordinance does not apply and may not

be enforced."

34

CIGARETTE & TOBACCO LAWSCIGARETTE & TOBACCO LAWSThis creates a black market for untaxed products $$$This creates a black market for untaxed products $$$

35

Questions for discussion--Are auxiliary questionnaires required for renewals?

Does every member of a Corp/LLC need to sign app?

Do Temporary Operator License holders require RBS?

Can you use the street address as premise description?

What is your quota?

How soon after denial can someone reapply?

Catering alcohol? Catering license?

36

Less frequent questions--Is your Town required to issue bartender licenses?

There is a floral shop in town that wants to sell wine and do wine tasting. What do they need to do?

Restaurants from outside your town want to set up a table at a local event and have specialty drinks available. Is this allowed?

What are the rights of someone denied a bartender license? Did the city violate their constitutional rights?

Can your local art/painting studio provide wine or can they just allow people attending the class to bring their own?

A sole proprietor holds the liquor license, but their spouse is aconvicted felon. Can the spouse bartend without a license?

Less frequent questions--A financial institution in your town wants to serve wineto clients who come in for one-to-one consultations claiming it is a private event. Can they do this?

Your city issued a liquor license to a renewal applicant and after doing so found out the payment check bounced.What happens now?

You have a landlord in your town who leases out the space to a different entity who actually holds the liquor license. The landlord is delinquent on property taxes for the location. Do you withhold the liquor license?

37

THANK YOU

Jason LeeTelephone # 608‐267‐5190 (Call Rick, he loves talking on the phone)

Email‐ [email protected]

Rick UhligTelephone # 920‐832‐2905Email‐ [email protected]

Overview of Alcohol & Tobacco Unit

Documents

Transcript of Overview of Alcohol & Tobacco Unit