Section ATCP 105.08 - Application of discounts and allowances(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.Wis. Admin. Code Department of Agriculture, Trade and Consumer Protection ATCP 105.08
Cr. Register, October, 1988, No. 394, eff. 11-1-88.