Wisconsin Administrative Code
Department of Revenue
Chapter Tax 7 - Fermented Malt Beverages
Section Tax 7.23 - Activities of brewers, bottlers, out-of-state shippers, and wholesalers
Universal Citation: WI Admin Code ยง Tax 7.23
Current through August 26, 2024
(1) DEFINITIONS. In this section and in ss. 125.02, 125.06, 125.28, 125.29, 125.295, 125.30, 125.33, 125.34, and 139.01, Stats.:
(a) "Brewer" has the meaning given in ss.
125.02(2) and
139.01(2),
Stats., and includes a recipe-brewer.
(b) "Event" means any activity, game,
contest, tournament or entertainment which is conducted on that part of a
campus premises where the sale of fermented malt beverages takes place or
premises operated under a retail Class "B" fermented malt beverage license or
permit or promoted by a campus operation for the sale of fermented malt
beverages or retail Class"B" fermented malt beverage licensee or
permittee.
(c) "Out-of-state
shipper" means the holder of an out-of-state shipper's permit issued under s.
125.30,
Stats., and includes a holder of a Federal Basic Importer's Permit.
(d) "Ownership interest" is a level of
ownership in a sole proprietorship, partnership, tax option corporation,
limited liability company, corporation, estate, or trust as an individual,
partner, shareholder, member, or beneficiary.
(e) "Production brewer" means a brewer who
directly manufactures fermented malt beverages for another brewer.
(f) "Recipe-brewer" means a person who
contracts with an agent to directly manufacture fermented malt beverages for
sale or transportation by that person.
(g) "Retail Class `B' fermented malt beverage
license" means all retailers' Class "B" licenses, including a temporary license
issued under s.
125.26(6),
Stats.
(h) "Sign" means a graphic
display, containing letters, words, symbols, numerals, shapes, forms or
pictures, including all component parts and labor necessary to assemble the
unit, which has no value or use except to advertise or identify a product or a
place of business or an event or any combination of these. The value of the
sign is determined by the original cost of acquisition if it is purchased by a
brewer or wholesaler.
(i) "Sponsor"
means to underwrite in whole or in part the cost of an event by providing
signs, advertising in score cards or on scoreboards and fences or by providing
equipment, prizes, trophies, entertainment or other things of value.
(2) BREWER'S PERMIT RESTRICTION AND EXCEPTIONS.
(a)
Restriction. No brewer or wholesaler of fermented malt
beverages may sponsor any event conducted on that part of a campus premises
where the sale of fermented malt beverages takes place or premises operated
under a retail Class "B" fermented malt beverage license or permit or promoted
by a campus operation for the sale of fermented malt beverages or retail Class
"B" fermented malt beverage licensee or permittee.
(b)
Exceptions. However, a
brewer or wholesaler may:
1. Purchase
advertising or other services or rights for a fair consideration from any
corporate Class "B" retail fermented malt beverage licensee which is a member
of a regularly established athletic league if the licensee derives more than
50% of its gross income from the ownership, maintenance and operation of a
professional athletic team which plays a regular schedule of games and which
derives more than 50% of its income from the sale of admissions to the team's
games.
2. Enter into contracts or
other arrangements directly with non-licensed third parties to sponsor an event
or sponsor radio or television broadcasts, to make payment for advertising, or
to provide other services or things of value if all 3 of the following
conditions are met:
a. No payments, services
or other things of value are made directly or indirectly by the brewer or
wholesaler to a Class "B" licensee.
b. The payments, services or other things of
value are not contingent upon the event being held at any premises designated
by the brewer or wholesaler.
c. The
sponsor's products are not required to be sold or served at the premises
selected by the non-licensed third party.
3. Permit refrigerated trucks or trailers to
remain on Class "B" licensed premises for the storage of beer during an event.
At the conclusion of the event the brewer, bottler or wholesaler may issue one
invoice to the Class "B" licensee for the beer actually used at the
event.
(3) EXAMPLES OF PROHIBITED ACTIVITIES. Subject to the limitations in sub. (2) (a) and (b), examples of conduct prohibited by s. 125.33(1), Stats., and this section include:
(a) A brewer
or wholesaler may not sponsor an association, team or other organization for a
campus or Class "B" licensee or permittee or have a Class "B" licensee,
corporate officer or partner who is part of an association, team or other
organization it sponsors.
(b) A
brewer or wholesaler may not hire persons to provide a concert or music at a
Class "B" licensed premises.
(4) BREWER'S PERMIT REQUIREMENTS.
(a) A brewer producing or selling fermented
malt beverages in this state shall file an application for a brewer's permit
with the department in the manner prescribed by the department.
(b) A production brewer is required to obtain
federal label approval and a federal brewer's notice from the federal alcohol
and tobacco tax and trade bureau.
(c)
1. An
application filed under par. (a) shall include a certification by the
recipe-brewer as to both of the following:
a.
The recipe-brewer is contracting with a production brewer to produce fermented
malt beverages.
b. The contract
between the recipe-brewer and production brewer specifically provides that the
production brewer is an agent of the recipe-brewer and the recipe-brewer has
retained the right to control the work contracted for.
2. Upon request of the department, a
recipe-brewer shall provide the department with the contract under subd. 1. a.
and b. for the department's inspection.
3. A contract under subd. 1. a. and b. may be
contingent upon the recipe-brewer receiving a permit under s.
125.29, Stats.
(d) An application filed
under par. (a) shall designate the premises where the fermented malt beverages
will be manufactured as the exclusive permitted brewery premises and provide
the permit number of the production brewer.
(e)
1. All
applications for issuance or renewal of permits under s.
125.29, Stats., shall be
processed by department personnel generally familiar with activities of
fermented malt beverage brewers. The issuance and renewal of permits shall be
done in coordination with the enforcement of the requirements of s.
125.29(1) and (2), Stats.
2. A permit issued or renewed under this
paragraph is specific to the premises of the production brewer. If the
recipe-brewer seeks to have fermented malt beverages manufactured at multiple
locations, it shall submit brewer's permit applications for each new
premise.
(f) For
purposes of s.
139.05(2),
Stats., the recipe-brewer is the brewer that is required to file tax
returns.
(g) A recipe-brewer shall
include fermented malt beverages manufactured in a contract brewing arrangement
in the report required under s.
139.11(2),
Stats. A production brewer shall exclude fermented malt beverages manufactured
in a contract brewing arrangement from the report required under s.
139.11(2),
Stats.
(h) For purposes of the
eligible producers tax credit under s.
139.02,
Stats., the recipe-brewer is the producer.
(5) FERMENTED MALT BEVERAGE WHOLESALER WAREHOUSE FACILITIES.
(a)
Minimum
requirements for warehouse facilities. The premises described in a
permit issued under s.
125.28,
Stats., shall be a minimum of 1,000 square feet of floor space and shall be
located in a free-standing building that is not part of or connected to a
premises covered by a retail license or permit issued under s.
125.25,
125.26,
or
125.27,
Stats.
(b)
Exception to
minimum requirements. The secretary of revenue may waive the
requirement that a premises described in a permit issued under s.
125.28,
Stats., be a minimum of 1,000 square feet of floor space when the secretary
determines that the waiver is fair and equitable, if the applicant or permittee
does both of the following:
1. Submits a
written request for a waiver along with the application for issuance or renewal
of a permit.
2. Indicates how the
requirements described in par. (a) and s.
125.28(5) (a), Stats., other than the requirement that
the premises described in the permit be a minimum of 1,000 square feet of floor
space, will be or have been met.
(c)
Purchases by a
wholesaler. Every permittee under s.
125.28,
Stats., shall retain invoices covering all purchases of fermented malt
beverages stored at the premises described in the permit for 4 years from the
date of the invoice. The invoices shall be retained on the premises described
in the permit for 2 years from the date of the invoice, and shall be open to
inspection at all reasonable times by any representative of the
department.
(d)
Inventory
records. Every permittee under s.
125.28,
Stats., shall complete a written inventory listing the entire stock of
fermented malt beverages stored at the premises described in the permit as of
the close of business on the last day of every month. A copy of the inventory
listing shall be retained by the permittee for 4 years from the date the
inventory is completed. The inventory listing shall be retained on the premises
described in the permit for 2 years from the date the inventory is completed,
and shall be open to inspection at all reasonable times by any representative
of the department.
(e)
Inspections of warehouse facilities. Before issuing a permit
under s.
125.28,
Stats., the department shall conduct a site inspection of the premises
described in the permit application to determine if such premises meets the
minimum requirements described in par. (a). The department shall also conduct
periodic site inspections of premises described in permits issued under s.
125.28,
Stats. Site inspections shall be conducted by department personnel generally
familiar with activities of fermented malt beverage wholesalers.
(f)
Background investigations of
applicants. Before issuing a permit under s.
125.28,
Stats., the department shall conduct a background investigation to determine
whether the applicant is qualified to hold the permit. The background
investigation shall be limited to obtaining information that is necessary to
enable the department to verify that the applicant meets the eligibility
requirements described in s.
125.28(1) (a) and (2) (b), Stats.
(g)
Processing of permits by the
department. All applications for issuance or renewal of permits under
s.
125.28,
Stats., shall be processed by department personnel generally familiar with
activities of fermented malt beverage wholesalers. The issuance and renewal of
permits shall be done in coordination with the enforcement of the requirements
of s.
125.28(5) (e), Stats.
See 68 Atty Gen 395 for a discussion of s. Tax 7.23.
Note: This section interprets s. 125.33(1), Stats.
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