Current through August 26, 2024
(1) DEFINITIONS. In
this section:
(a) "Allowance" means a
manufacturer's payment of consideration to a wholesaler who, in exchange,
performs some service for or provides something of value to the manufacturer.
"Allowance" includes advertising allowances, customary discounts for cash
payment and manufacturer's hand stamping allowances.
(b) "Consideration" means something of value
in any form, including adjustments a manufacturer makes to the list price of
cigarettes and other tobacco products and an offer of other goods for free or
at reduced prices.
(c)
"Manufacturer's discount" includes any trade discount and any
allowance.
(d) "Trade discount"
means a manufacturer's payment of consideration to a wholesaler to account for
differences in the cost of manufacture, sale or delivery resulting from
differing methods or quantities in which the manufacturer's cigarettes or other
tobacco products are sold or delivered to the wholesaler. "Trade discount" does
not include allowances.
Note: State v. Eau Claire Oil, 35 Wis. 2d 724 (1967), 63
OAG 516 (1974) and 72 OAG 126 (1983) all provide definitions of trade discounts
and allowances under s.
100.30, Stats.
Section
100.30, Stats.,
uses the terms "trade discount" and "manufacturer's discount" more loosely than
they are defined in these rules. As a result, the definitions of "trade
discount" and "manufacturer's discount" in these rules may not be appropriate
in interpreting these phrases where they appear in the statute.
(2) JOBBER'S
APPLICATION OF DISCOUNTS AND ALLOWANCES. The following provisions interpret s. 100.30(2) (c)
1 a., Stats., regarding the proper accounting
treatment of trade discounts and allowances by cigarette jobbers:
(a) All trade discounts may be used to reduce
the cost of merchandise to the jobber.
(b) To the extent provided under this
paragraph, allowances may be deducted from the jobber's cost of doing business.
Each allowance so used shall offset expenses incurred when performing the
service or providing the item of value; customary discounts for cash payment
shall offset interest expenses and other bank charges. These offsets may not
exceed the amount of expense incurred for performing the service or providing
the item of value that is allocated to cigarettes and other tobacco
products.
(3)
DISTRIBUTORS' APPLICATION OF DISCOUNTS AND ALLOWANCES. The following provisions
interpret s. 100.30(2) (c)
1 b., Stats., regarding the proper accounting
treatment of trade discounts, manufacturer's discounts and allowances by
cigarette distributors holding permits under s.
139.30(3),
Stats.:
(a) Neither the state stamping
discount under s.
139.32(5),
Stats., nor any manufacturer's discount may be used to reduce the cost of
merchandise to the cigarette distributor.
(b) To the extent provided under this
paragraph, allowances and the state stamping discount under s.
139.32(5),
Stats., may be deducted from the cost of doing business. If an allowance or the
state stamping discount is so used it shall offset expenses incurred when
performing the service or providing the item of value; customary discounts for
cash payment shall offset interest expenses and other bank charges. These
offsets may not exceed the amount of expense incurred for performing the
service or providing the item of value that is allocated to cigarettes and
other tobacco products.
