Bill tightening tobacco, lottery and sales tax evasion laws gains momentum

A bipartisan bill seeking to tighten tobacco, alcohol, lottery and tax evasion laws in Wisconsin is gaining momentum in the State Capitol.

The expansive legislation would increase penalties for businesses using software to avoid paying sales taxes, make it illegal for people to use alcohol vaping devices and require tobacco licenses to sell electronic cigarettes.

During a public hearing Thursday, bill author Sen. Van Wanggaard, R-Racine, said the wide-ranging legislation would help local law enforcement and the Wisconsin Department of Revenue enforce tobacco and lottery regulations.

The bill would standardize tobacco sales licenses across the state. People who are determined to be a “habitual law offender” or who have been convicted of a felony would not be allowed to receive tobacco licenses. In addition, the bill would require anyone selling electronic tobacco vaping devices to get a tobacco retailer license.

The legislation would also alter lottery regulations in Wisconsin. In particular, anyone caught sharing or transferring a lottery ticket to another person would be charged with a felony. Wisconsin Department of Revenue Secretary Peter Barca told lawmakers it’s a method used to avoid having to pay outstanding court fees or back-taxes.

“Sometimes people attempt to do that because if you owe past child support or have taxes due, that’s deducted before you get your money,” Barca said. “And so we want to make sure that people cease attempting that kind of activity.”

Possessing, selling or using alcohol vapor devices, which atomize alcohol that is then inhaled, would be outlawed in Wisconsin under the bill. While not common, alcohol mist machines have been advertised at bars in the state. In 2018, a 14-year-old was hospitalized in Grant County after using an alcohol vaping device.

“We’ve had circumstances where kids pass out immediately upon doing that,” Barca said. “So we want to make that illegal.”

Finally, lawmakers hope to make it harder for businesses in Wisconsin to avoid paying state sales taxes with the use of software known as “zappers,” which falsifies electronic records from cash registers. Barca said most business owners are law-abiding citizens, “but sadly, it does occur in many instances.”

“Clearly, it gives an unfair advantage to those people who are schemers compared to the vast majority of restaurant and other retailers who are very honest, honorable people,” Barca said.

Using zappers is already illegal in the state, but Van Wanggaard told colleagues the state needs to clamp down on those who make and distribute the illicit software.

“This has no legitimate purpose at all but to defeat the ability for the state to gain the revenues that they should be (receiving),” Wanggard said.