Illinois General Assembly - Full Text of SB0044
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Full Text of SB0044  96th General Assembly

SB0044ham006 96TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 1/10/2011

 

 


 

 


 
09600SB0044ham006LRB096 03720 HLH 44901 a

1
AMENDMENT TO SENATE BILL 44

2    AMENDMENT NO. ______. Amend Senate Bill 44 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The State Finance Act is amended by adding
5Sections 5.786 and 6z-85 as follows:
 
6    (30 ILCS 105/5.786 new)
7    Sec. 5.786. The Fund for the Advancement of Education.
 
8    (30 ILCS 105/6z-85 new)
9    Sec. 6z-85. The Fund for the Advancement of Education;
10creation. The Fund for the Advancement of Education is hereby
11created as a special fund in the State treasury. All moneys
12deposited into the fund shall be appropriated to provide
13financial assistance for education programs. Moneys
14appropriated from the Fund shall supplement and not supplant
15the current level of education funding.
 

 

 

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1    Section 10. The Cigarette Tax Act is amended by changing
2Sections 2 and 3 as follows:
 
3    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
4    Sec. 2. Tax imposed; rate; collection, payment, and
5distribution; discount.
6    (a) A tax is imposed upon any person engaged in business as
7a retailer of cigarettes in this State at the rate of 5 1/2
8mills per cigarette sold, or otherwise disposed of in the
9course of such business in this State. In addition to any other
10tax imposed by this Act, a tax is imposed upon any person
11engaged in business as a retailer of cigarettes in this State
12at a rate of 1/2 mill per cigarette sold or otherwise disposed
13of in the course of such business in this State on and after
14January 1, 1947, and shall be paid into the Metropolitan Fair
15and Exposition Authority Reconstruction Fund or as otherwise
16provided in Section 29. On and after December 1, 1985, in
17addition to any other tax imposed by this Act, a tax is imposed
18upon any person engaged in business as a retailer of cigarettes
19in this State at a rate of 4 mills per cigarette sold or
20otherwise disposed of in the course of such business in this
21State. Of the additional tax imposed by this amendatory Act of
221985, $9,000,000 of the moneys received by the Department of
23Revenue pursuant to this Act shall be paid each month into the
24Common School Fund. On and after the effective date of this

 

 

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1amendatory Act of 1989, in addition to any other tax imposed by
2this Act, a tax is imposed upon any person engaged in business
3as a retailer of cigarettes at the rate of 5 mills per
4cigarette sold or otherwise disposed of in the course of such
5business in this State. On and after the effective date of this
6amendatory Act of 1993, in addition to any other tax imposed by
7this Act, a tax is imposed upon any person engaged in business
8as a retailer of cigarettes at the rate of 7 mills per
9cigarette sold or otherwise disposed of in the course of such
10business in this State. On and after December 15, 1997, in
11addition to any other tax imposed by this Act, a tax is imposed
12upon any person engaged in business as a retailer of cigarettes
13at the rate of 7 mills per cigarette sold or otherwise disposed
14of in the course of such business of this State. All of the
15moneys received by the Department of Revenue pursuant to this
16Act and the Cigarette Use Tax Act from the additional taxes
17imposed by this amendatory Act of 1997, shall be paid each
18month into the Common School Fund. On and after July 1, 2002,
19in addition to any other tax imposed by this Act, a tax is
20imposed upon any person engaged in business as a retailer of
21cigarettes at the rate of 20.0 mills per cigarette sold or
22otherwise disposed of in the course of such business in this
23State. Beginning on March 1, 2011, in addition to any other tax
24imposed by this Act, a tax is imposed upon any person engaged
25in business as a retailer of cigarettes at the rate of 50.5
26mills per cigarette sold or otherwise disposed of in the course

 

 

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1of such business in this State. Of the moneys received by the
2Department of Revenue under this Act and the Cigarette Use Tax
3Act from the additional taxes imposed by this amendatory Act of
4the 96th General Assembly (i) an amount equal to 0.5 mills per
5cigarette sold or otherwise disposed of shall be paid each
6month into the Long-Term Care Provider Fund and (ii) the
7balance shall be paid each month (A) into the General Revenue
8Fund beginning on March 1, 2011 and through June 30, 2011, and
9(B) into the Fund for the Advancement of Education, a special
10fund in the State treasury, beginning on July 1, 2011. The
11payment of such taxes shall be evidenced by a stamp affixed to
12each original package of cigarettes, or an authorized
13substitute for such stamp imprinted on each original package of
14such cigarettes underneath the sealed transparent outside
15wrapper of such original package, as hereinafter provided.
16However, such taxes are not imposed upon any activity in such
17business in interstate commerce or otherwise, which activity
18may not under the Constitution and statutes of the United
19States be made the subject of taxation by this State.
20    Beginning on the effective date of this amendatory Act of
21the 92nd General Assembly and through June 30, 2006, all of the
22moneys received by the Department of Revenue pursuant to this
23Act and the Cigarette Use Tax Act, other than the moneys that
24are dedicated to the Common School Fund, shall be distributed
25each month as follows: first, there shall be paid into the
26General Revenue Fund an amount which, when added to the amount

 

 

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1paid into the Common School Fund for that month, equals
2$33,300,000, except that in the month of August of 2004, this
3amount shall equal $83,300,000; then, from the moneys
4remaining, if any amounts required to be paid into the General
5Revenue Fund in previous months remain unpaid, those amounts
6shall be paid into the General Revenue Fund; then, beginning on
7April 1, 2003, from the moneys remaining, $5,000,000 per month
8shall be paid into the School Infrastructure Fund; then, if any
9amounts required to be paid into the School Infrastructure Fund
10in previous months remain unpaid, those amounts shall be paid
11into the School Infrastructure Fund; then the moneys remaining,
12if any, shall be paid into the Long-Term Care Provider Fund. To
13the extent that more than $25,000,000 has been paid into the
14General Revenue Fund and Common School Fund per month for the
15period of July 1, 1993 through the effective date of this
16amendatory Act of 1994 from combined receipts of the Cigarette
17Tax Act and the Cigarette Use Tax Act, notwithstanding the
18distribution provided in this Section, the Department of
19Revenue is hereby directed to adjust the distribution provided
20in this Section to increase the next monthly payments to the
21Long Term Care Provider Fund by the amount paid to the General
22Revenue Fund and Common School Fund in excess of $25,000,000
23per month and to decrease the next monthly payments to the
24General Revenue Fund and Common School Fund by that same excess
25amount.
26    Beginning on July 1, 2006, all of the moneys received by

 

 

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1the Department of Revenue pursuant to this Act and the
2Cigarette Use Tax Act, other than the moneys that are dedicated
3to the Common School Fund and, beginning on the effective date
4of this amendatory Act of the 96th General Assembly, other than
5the moneys from the additional taxes imposed by this amendatory
6Act of the 96th General Assembly that must be paid each month
7into the General Revenue Fund, the Long-Term Care Provider
8Fund, and the Fund for the Advancement of Education, shall be
9distributed each month as follows: first, there shall be paid
10into the General Revenue Fund an amount that, when added to the
11amount paid into the Common School Fund for that month, equals
12$29,200,000; then, from the moneys remaining, if any amounts
13required to be paid into the General Revenue Fund in previous
14months remain unpaid, those amounts shall be paid into the
15General Revenue Fund; then from the moneys remaining,
16$5,000,000 per month shall be paid into the School
17Infrastructure Fund; then, if any amounts required to be paid
18into the School Infrastructure Fund in previous months remain
19unpaid, those amounts shall be paid into the School
20Infrastructure Fund; then the moneys remaining, if any, shall
21be paid into the Long-Term Care Provider Fund.
22    When any tax imposed herein terminates or has terminated,
23distributors who have bought stamps while such tax was in
24effect and who therefore paid such tax, but who can show, to
25the Department's satisfaction, that they sold the cigarettes to
26which they affixed such stamps after such tax had terminated

 

 

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1and did not recover the tax or its equivalent from purchasers,
2shall be allowed by the Department to take credit for such
3absorbed tax against subsequent tax stamp purchases from the
4Department by such distributor.
5    The impact of the tax levied by this Act is imposed upon
6the retailer and shall be prepaid or pre-collected by the
7distributor for the purpose of convenience and facility only,
8and the amount of the tax shall be added to the price of the
9cigarettes sold by such distributor. Collection of the tax
10shall be evidenced by a stamp or stamps affixed to each
11original package of cigarettes, as hereinafter provided.
12    Each distributor shall collect the tax from the retailer at
13or before the time of the sale, shall affix the stamps as
14hereinafter required, and shall remit the tax collected from
15retailers to the Department, as hereinafter provided. Any
16distributor who fails to properly collect and pay the tax
17imposed by this Act shall be liable for the tax. Any
18distributor having cigarettes to which stamps have been affixed
19in his possession for sale on the effective date of this
20amendatory Act of 1989 shall not be required to pay the
21additional tax imposed by this amendatory Act of 1989 on such
22stamped cigarettes. Any distributor having cigarettes to which
23stamps have been affixed in his or her possession for sale at
2412:01 a.m. on the effective date of this amendatory Act of
251993, is required to pay the additional tax imposed by this
26amendatory Act of 1993 on such stamped cigarettes. This

 

 

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1payment, less the discount provided in subsection (b), shall be
2due when the distributor first makes a purchase of cigarette
3tax stamps after the effective date of this amendatory Act of
41993, or on the first due date of a return under this Act after
5the effective date of this amendatory Act of 1993, whichever
6occurs first. Any distributor having cigarettes to which stamps
7have been affixed in his possession for sale on December 15,
81997 shall not be required to pay the additional tax imposed by
9this amendatory Act of 1997 on such stamped cigarettes.
10    Any distributor having cigarettes to which stamps have been
11affixed in his or her possession for sale on July 1, 2002 shall
12not be required to pay the additional tax imposed by this
13amendatory Act of the 92nd General Assembly on those stamped
14cigarettes. Any retailer having cigarettes in his or her
15possession on March 1, 2011 to which tax stamps have been
16affixed is not required to pay the additional tax that begins
17on March 1, 2011 imposed by this amendatory Act of the 96th
18General Assembly on those stamped cigarettes. Any distributor
19having cigarettes in his or her possession on March 1, 2011 to
20which tax stamps have been affixed is required to pay the
21additional tax that begins on March 1, 2011 imposed by this
22amendatory Act of the 96th General Assembly to the extent the
23calendar year 2011 average monthly volume of cigarette stamps
24in the distributor's possession exceeds the average monthly
25volume of cigarette stamps purchased by the distributor in
26calendar year 2010. This payment, less the discount provided in

 

 

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1subsection (b), is due when the distributor first makes a
2purchase of cigarette stamps on or after March 1, 2011 or on
3the first due date of a return under this Act occurring on or
4after March 1, 2011, whichever occurs first.
5    Distributors making sales of cigarettes to secondary
6distributors shall add the amount of the tax to the price of
7the cigarettes sold by the distributors. Secondary
8distributors making sales of cigarettes to retailers shall
9include the amount of the tax in the price of the cigarettes
10sold to retailers. The amount of tax shall not be less than the
11amount of taxes imposed by the State and all local
12jurisdictions. The amount of local taxes shall be calculated
13based on the location of the retailer's place of business shown
14on the retailer's certificate of registration or
15sub-registration issued to the retailer pursuant to Section 2a
16of the Retailers' Occupation Tax Act. The original packages of
17cigarettes sold to the retailer shall bear all the required
18stamps, or other indicia, for the taxes included in the price
19of cigarettes.
20    The amount of the Cigarette Tax imposed by this Act shall
21be separately stated, apart from the price of the goods, by
22distributors, secondary distributors, and retailers, in all
23bills and sales invoices.
24    (b) The distributor shall be required to collect the taxes
25provided under paragraph (a) hereof, and, to cover the costs of
26such collection, shall be allowed a discount during any year

 

 

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1commencing July 1st and ending the following June 30th in
2accordance with the schedule set out hereinbelow, which
3discount shall be allowed at the time of purchase of the stamps
4when purchase is required by this Act, or at the time when the
5tax is remitted to the Department without the purchase of
6stamps from the Department when that method of paying the tax
7is required or authorized by this Act. Prior to December 1,
81985, a discount equal to 1 2/3% of the amount of the tax up to
9and including the first $700,000 paid hereunder by such
10distributor to the Department during any such year; 1 1/3% of
11the next $700,000 of tax or any part thereof, paid hereunder by
12such distributor to the Department during any such year; 1% of
13the next $700,000 of tax, or any part thereof, paid hereunder
14by such distributor to the Department during any such year, and
152/3 of 1% of the amount of any additional tax paid hereunder by
16such distributor to the Department during any such year shall
17apply. On and after December 1, 1985, a discount equal to 1.75%
18of the amount of the tax payable under this Act up to and
19including the first $3,000,000 paid hereunder by such
20distributor to the Department during any such year and 1.5% of
21the amount of any additional tax paid hereunder by such
22distributor to the Department during any such year shall apply.
23    Two or more distributors that use a common means of
24affixing revenue tax stamps or that are owned or controlled by
25the same interests shall be treated as a single distributor for
26the purpose of computing the discount.

 

 

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1    (c) The taxes herein imposed are in addition to all other
2occupation or privilege taxes imposed by the State of Illinois,
3or by any political subdivision thereof, or by any municipal
4corporation.
5(Source: P.A. 96-1027, eff. 7-12-10.)
 
6    (35 ILCS 130/3)  (from Ch. 120, par. 453.3)
7    Sec. 3. Affixing tax stamp; remitting tax to the
8Department. Payment of the taxes imposed by Section 2 of this
9Act shall (except as hereinafter provided) be evidenced by
10revenue tax stamps affixed to each original package of
11cigarettes. Each distributor of cigarettes, before delivering
12or causing to be delivered any original package of cigarettes
13in this State to a purchaser, shall firmly affix a proper stamp
14or stamps to each such package, or (in case of manufacturers of
15cigarettes in original packages which are contained inside a
16sealed transparent wrapper) shall imprint the required
17language on the original package of cigarettes beneath such
18outside wrapper, as hereinafter provided.
19    No stamp or imprint may be affixed to, or made upon, any
20package of cigarettes unless that package complies with all
21requirements of the federal Cigarette Labeling and Advertising
22Act, 15 U.S.C. 1331 and following, for the placement of labels,
23warnings, or any other information upon a package of cigarettes
24that is sold within the United States. Under the authority of
25Section 6, the Department shall revoke the license of any

 

 

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1distributor that is determined to have violated this paragraph.
2A person may not affix a stamp on a package of cigarettes,
3cigarette papers, wrappers, or tubes if that individual package
4has been marked for export outside the United States with a
5label or notice in compliance with Section 290.185 of Title 27
6of the Code of Federal Regulations. It is not a defense to a
7proceeding for violation of this paragraph that the label or
8notice has been removed, mutilated, obliterated, or altered in
9any manner.
10    Only distributors licensed under this Act and
11transporters, as defined in Section 9c of this Act, may possess
12unstamped original packages of cigarettes. Prior to shipment to
13a secondary distributor or an Illinois retailer, a stamp shall
14be applied to each original package of cigarettes sold to the
15secondary distributor or retailer. A distributor may apply tax
16stamps only to original packages of cigarettes purchased or
17obtained directly from an in-state maker, manufacturer, or
18fabricator licensed as a distributor under Section 4 of this
19Act or an out-of-state maker, manufacturer, or fabricator
20holding a permit under Section 4b of this Act. A licensed
21distributor may ship or otherwise cause to be delivered
22unstamped original packages of cigarettes in, into, or from
23this State. A licensed distributor may transport unstamped
24original packages of cigarettes to a facility, wherever
25located, owned or controlled by such distributor; however, a
26distributor may not transport unstamped original packages of

 

 

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1cigarettes to a facility where retail sales of cigarettes take
2place or to a facility where a secondary distributor makes
3sales for resale. Any licensed distributor that ships or
4otherwise causes to be delivered unstamped original packages of
5cigarettes into, within, or from this State shall ensure that
6the invoice or equivalent documentation and the bill of lading
7or freight bill for the shipment identifies the true name and
8address of the consignor or seller, the true name and address
9of the consignee or purchaser, and the quantity by brand style
10of the cigarettes so transported, provided that this Section
11shall not be construed as to impose any requirement or
12liability upon any common or contract carrier.
13    The Department, or any person authorized by the Department,
14shall sell such stamps only to persons holding valid licenses
15as distributors under this Act. On and after July 1, 2003,
16payment for such stamps must be made by means of electronic
17funds transfer. The Department may refuse to sell stamps to any
18person who does not comply with the provisions of this Act.
19Beginning on the effective date of this amendatory Act of the
2092nd General Assembly and through June 30, 2002, persons
21holding valid licenses as distributors may purchase cigarette
22tax stamps up to an amount equal to 115% of the distributor's
23average monthly cigarette tax stamp purchases over the 12
24calendar months prior to the effective date of this amendatory
25Act of the 92nd General Assembly.
26    Prior to December 1, 1985, the Department shall allow a

 

 

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1distributor 21 days in which to make final payment of the
2amount to be paid for such stamps, by allowing the distributor
3to make payment for the stamps at the time of purchasing them
4with a draft which shall be in such form as the Department
5prescribes, and which shall be payable within 21 days
6thereafter: Provided that such distributor has filed with the
7Department, and has received the Department's approval of, a
8bond, which is in addition to the bond required under Section 4
9of this Act, payable to the Department in an amount equal to
1080% of such distributor's average monthly tax liability to the
11Department under this Act during the preceding calendar year or
12$500,000, whichever is less. The Bond shall be joint and
13several and shall be in the form of a surety company bond in
14such form as the Department prescribes, or it may be in the
15form of a bank certificate of deposit or bank letter of credit.
16The bond shall be conditioned upon the distributor's payment of
17amount of any 21-day draft which the Department accepts from
18that distributor for the delivery of stamps to that distributor
19under this Act. The distributor's failure to pay any such
20draft, when due, shall also make such distributor automatically
21liable to the Department for a penalty equal to 25% of the
22amount of such draft.
23    On and after December 1, 1985 and until July 1, 2003, the
24Department shall allow a distributor 30 days in which to make
25final payment of the amount to be paid for such stamps, by
26allowing the distributor to make payment for the stamps at the

 

 

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1time of purchasing them with a draft which shall be in such
2form as the Department prescribes, and which shall be payable
3within 30 days thereafter, and beginning on January 1, 2003 and
4thereafter, the draft shall be payable by means of electronic
5funds transfer: Provided that such distributor has filed with
6the Department, and has received the Department's approval of,
7a bond, which is in addition to the bond required under Section
84 of this Act, payable to the Department in an amount equal to
9150% of such distributor's average monthly tax liability to the
10Department under this Act during the preceding calendar year or
11$750,000, whichever is less, except that as to bonds filed on
12or after January 1, 1987, such additional bond shall be in an
13amount equal to 100% of such distributor's average monthly tax
14liability under this Act during the preceding calendar year or
15$750,000, whichever is less. The bond shall be joint and
16several and shall be in the form of a surety company bond in
17such form as the Department prescribes, or it may be in the
18form of a bank certificate of deposit or bank letter of credit.
19The bond shall be conditioned upon the distributor's payment of
20the amount of any 30-day draft which the Department accepts
21from that distributor for the delivery of stamps to that
22distributor under this Act. The distributor's failure to pay
23any such draft, when due, shall also make such distributor
24automatically liable to the Department for a penalty equal to
2525% of the amount of such draft.
26    Beginning on the effective date of this amendatory Act of

 

 

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1the 96th General Assembly, the Department shall allow a
2distributor 10 days in which to make final payment of the
3amount to be paid for such stamps, by allowing the distributor
4to make payment for the stamps at the time of purchasing them
5with a draft, which shall be payable by means of electronic
6funds transfer and in such form as the Department prescribes,
7and which shall be payable within 10 days thereafter, provided
8that such distributor has filed with the Department, and has
9received the Department's approval of, a bond, which is in
10addition to the bond required under Section 4 of this Act,
11payable to the Department in an amount equal to 100% of that
12distributor's average monthly tax liability to the Department
13under this Act during the preceding calendar year or $750,000,
14whichever is less. The bond shall be joint and several and
15shall be in the form of a surety company bond in such form as
16the Department prescribes, or it may be in the form of a bank
17certificate of deposit or bank letter of credit. The bond shall
18be conditioned upon the distributor's payment of the amount of
19any 10-day draft which the Department accepts from that
20distributor for the delivery of stamps to that distributor
21under this Act. The distributor's failure to pay any such
22draft, when due, shall also make such distributor automatically
23liable to the Department for a penalty equal to 25% of the
24amount of such draft.
25    Every prior continuous compliance taxpayer shall be exempt
26from all requirements under this Section concerning the

 

 

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1furnishing of such bond, as defined in this Section, as a
2condition precedent to his being authorized to engage in the
3business licensed under this Act. This exemption shall continue
4for each such taxpayer until such time as he may be determined
5by the Department to be delinquent in the filing of any
6returns, or is determined by the Department (either through the
7Department's issuance of a final assessment which has become
8final under the Act, or by the taxpayer's filing of a return
9which admits tax to be due that is not paid) to be delinquent
10or deficient in the paying of any tax under this Act, at which
11time that taxpayer shall become subject to the bond
12requirements of this Section and, as a condition of being
13allowed to continue to engage in the business licensed under
14this Act, shall be required to furnish bond to the Department
15in such form as provided in this Section. Such taxpayer shall
16furnish such bond for a period of 2 years, after which, if the
17taxpayer has not been delinquent in the filing of any returns,
18or delinquent or deficient in the paying of any tax under this
19Act, the Department may reinstate such person as a prior
20continuance compliance taxpayer. Any taxpayer who fails to pay
21an admitted or established liability under this Act may also be
22required to post bond or other acceptable security with the
23Department guaranteeing the payment of such admitted or
24established liability.
25    Any person aggrieved by any decision of the Department
26under this Section may, within the time allowed by law, protest

 

 

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1and request a hearing, whereupon the Department shall give
2notice and shall hold a hearing in conformity with the
3provisions of this Act and then issue its final administrative
4decision in the matter to such person. In the absence of such a
5protest filed within the time allowed by law, the Department's
6decision shall become final without any further determination
7being made or notice given.
8    The Department shall discharge any surety and shall release
9and return any bond or security deposited, assigned, pledged,
10or otherwise provided to it by a taxpayer under this Section
11within 30 days after:
12    (1) Such taxpayer becomes a prior continuous compliance
13taxpayer; or
14    (2) Such taxpayer has ceased to collect receipts on which
15he is required to remit tax to the Department, has filed a
16final tax return, and has paid to the Department an amount
17sufficient to discharge his remaining tax liability as
18determined by the Department under this Act. The Department
19shall make a final determination of the taxpayer's outstanding
20tax liability as expeditiously as possible after his final tax
21return has been filed. If the Department cannot make such final
22determination within 45 days after receiving the final tax
23return, within such period it shall so notify the taxpayer,
24stating its reasons therefor.
25    The Department may authorize distributors to affix revenue
26tax stamps by imprinting tax meter stamps upon original

 

 

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1packages of cigarettes. The Department shall adopt rules and
2regulations relating to the imprinting of such tax meter stamps
3as will result in payment of the proper taxes as herein
4imposed. No distributor may affix revenue tax stamps to
5original packages of cigarettes by imprinting tax meter stamps
6thereon unless such distributor has first obtained permission
7from the Department to employ this method of affixation. The
8Department shall regulate the use of tax meters and may, to
9assure the proper collection of the taxes imposed by this Act,
10revoke or suspend the privilege, theretofore granted by the
11Department to any distributor, to imprint tax meter stamps upon
12original packages of cigarettes.
13    Illinois cigarette manufacturers who place their
14cigarettes in original packages which are contained inside a
15sealed transparent wrapper, and similar out-of-State cigarette
16manufacturers who elect to qualify and are accepted by the
17Department as distributors under Section 4b(a) of this Act,
18shall pay the taxes imposed by this Act by remitting the amount
19thereof to the Department by the 5th day of each month covering
20cigarettes shipped or otherwise delivered in Illinois to
21purchasers during the preceding calendar month. Such
22manufacturers of cigarettes in original packages which are
23contained inside a sealed transparent wrapper, before
24delivering such cigarettes or causing such cigarettes to be
25delivered in this State to purchasers, shall evidence their
26obligation to remit the taxes due with respect to such

 

 

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1cigarettes by imprinting language to be prescribed by the
2Department on each original package of such cigarettes
3underneath the sealed transparent outside wrapper of such
4original package, in such place thereon and in such manner as
5the Department may designate. Such imprinted language shall
6acknowledge the manufacturer's payment of or liability for the
7tax imposed by this Act with respect to the distribution of
8such cigarettes.
9    A distributor shall not affix, or cause to be affixed, any
10stamp or imprint to a package of cigarettes, as provided for in
11this Section, if the tobacco product manufacturer, as defined
12in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
13that made or sold the cigarettes has failed to become a
14participating manufacturer, as defined in subdivision (a)(1)
15of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
16or has failed to create a qualified escrow fund for any
17cigarettes manufactured by the tobacco product manufacturer
18and sold in this State or otherwise failed to bring itself into
19compliance with subdivision (a)(2) of Section 15 of the Tobacco
20Product Manufacturers' Escrow Act.
21(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;
2296-1027, eff. 7-12-10.)
 
23    Section 15. The Cigarette Use Tax Act is amended by
24changing Sections 2, 3, and 12 as follows:
 

 

 

09600SB0044ham006- 21 -LRB096 03720 HLH 44901 a

1    (35 ILCS 135/2)  (from Ch. 120, par. 453.32)
2    Sec. 2. A tax is imposed upon the privilege of using
3cigarettes in this State, at the rate of 6 mills per cigarette
4so used. On and after December 1, 1985, in addition to any
5other tax imposed by this Act, a tax is imposed upon the
6privilege of using cigarettes in this State at a rate of 4
7mills per cigarette so used. On and after the effective date of
8this amendatory Act of 1989, in addition to any other tax
9imposed by this Act, a tax is imposed upon the privilege of
10using cigarettes in this State at the rate of 5 mills per
11cigarette so used. On and after the effective date of this
12amendatory Act of 1993, in addition to any other tax imposed by
13this Act, a tax is imposed upon the privilege of using
14cigarettes in this State at a rate of 7 mills per cigarette so
15used. On and after December 15, 1997, in addition to any other
16tax imposed by this Act, a tax is imposed upon the privilege of
17using cigarettes in this State at a rate of 7 mills per
18cigarette so used. On and after July 1, 2002, in addition to
19any other tax imposed by this Act, a tax is imposed upon the
20privilege of using cigarettes in this State at a rate of 20.0
21mills per cigarette so used. Beginning on March 1, 2011, in
22addition to any other tax imposed by this Act, a tax is imposed
23upon the privilege of using cigarettes in this State at a rate
24of 50.5 mills per cigarette so used. The taxes herein imposed
25shall be in addition to all other occupation or privilege taxes
26imposed by the State of Illinois or by any political

 

 

09600SB0044ham006- 22 -LRB096 03720 HLH 44901 a

1subdivision thereof or by any municipal corporation.
2    When any tax imposed herein terminates or has terminated,
3distributors who have bought stamps while such tax was in
4effect and who therefore paid such tax, but who can show, to
5the Department's satisfaction, that they sold the cigarettes to
6which they affixed such stamps after such tax had terminated
7and did not recover the tax or its equivalent from purchasers,
8shall be allowed by the Department to take credit for such
9absorbed tax against subsequent tax stamp purchases from the
10Department by such distributors.
11    When the word "tax" is used in this Act, it shall include
12any tax or tax rate imposed by this Act and shall mean the
13singular of "tax" or the plural "taxes" as the context may
14require.
15    Any distributor having cigarettes to which stamps have been
16affixed in his possession for sale on the effective date of
17this amendatory Act of 1989 shall not be required to pay the
18additional tax imposed by this amendatory Act of 1989 on such
19stamped cigarettes. Any distributor having cigarettes to which
20stamps have been affixed in his or her possession for sale at
2112:01 a.m. on the effective date of this amendatory Act of
221993, is required to pay the additional tax imposed by this
23amendatory Act of 1993 on such stamped cigarettes. This payment
24shall be due when the distributor first makes a purchase of
25cigarette tax stamps after the effective date of this
26amendatory Act of 1993, or on the first due date of a return

 

 

09600SB0044ham006- 23 -LRB096 03720 HLH 44901 a

1under this Act after the effective date of this amendatory Act
2of 1993, whichever occurs first. Once a distributor tenders
3payment of the additional tax to the Department, the
4distributor may purchase stamps from the Department. Any
5distributor having cigarettes to which stamps have been affixed
6in his possession for sale on December 15, 1997 shall not be
7required to pay the additional tax imposed by this amendatory
8Act of 1997 on such stamped cigarettes.
9    Any distributor having cigarettes to which stamps have been
10affixed in his or her possession for sale on July 1, 2002 shall
11not be required to pay the additional tax imposed by this
12amendatory Act of the 92nd General Assembly on those stamped
13cigarettes. Any retailer having cigarettes in his or her
14possession on March 1, 2011 to which tax stamps have been
15affixed is not required to pay the additional tax that begins
16on March 1, 2011 imposed by this amendatory Act of the 96th
17General Assembly on those stamped cigarettes. Any distributor
18having cigarettes in his or her possession on March 1, 2011 to
19which tax stamps have been affixed is required to pay the
20additional tax that begins on March 1, 2011 imposed by this
21amendatory Act of the 96th General Assembly to the extent the
22calendar year 2011 average monthly volume of cigarette stamps
23in the distributor's possession exceeds the average monthly
24volume of cigarette stamps purchased by the distributor in
25calendar year 2010. This payment, less the discount provided in
26Section 3, is due when the distributor first makes a purchase

 

 

09600SB0044ham006- 24 -LRB096 03720 HLH 44901 a

1of cigarette stamps on or after March 1, 2011 or on the first
2due date of a return under this Act occurring on or after March
31, 2011, whichever occurs first.
4(Source: P.A. 92-536, eff. 6-6-02.)
 
5    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
6    Sec. 3. Stamp payment. The tax hereby imposed shall be
7collected by a distributor maintaining a place of business in
8this State or a distributor authorized by the Department
9pursuant to Section 7 hereof to collect the tax, and the amount
10of the tax shall be added to the price of the cigarettes sold
11by such distributor. Collection of the tax shall be evidenced
12by a stamp or stamps affixed to each original package of
13cigarettes or by an authorized substitute for such stamp
14imprinted on each original package of such cigarettes
15underneath the sealed transparent outside wrapper of such
16original package, except as hereinafter provided. Each
17distributor who is required or authorized to collect the tax
18herein imposed, before delivering or causing to be delivered
19any original packages of cigarettes in this State to any
20purchaser, shall firmly affix a proper stamp or stamps to each
21such package, or (in the case of manufacturers of cigarettes in
22original packages which are contained inside a sealed
23transparent wrapper) shall imprint the required language on the
24original package of cigarettes beneath such outside wrapper as
25hereinafter provided. Such stamp or stamps need not be affixed

 

 

09600SB0044ham006- 25 -LRB096 03720 HLH 44901 a

1to the original package of any cigarettes with respect to which
2the distributor is required to affix a like stamp or stamps by
3virtue of the Cigarette Tax Act, however, and no tax imprint
4need be placed underneath the sealed transparent wrapper of an
5original package of cigarettes with respect to which the
6distributor is required or authorized to employ a like tax
7imprint by virtue of the Cigarette Tax Act.
8    No stamp or imprint may be affixed to, or made upon, any
9package of cigarettes unless that package complies with all
10requirements of the federal Cigarette Labeling and Advertising
11Act, 15 U.S.C. 1331 and following, for the placement of labels,
12warnings, or any other information upon a package of cigarettes
13that is sold within the United States. Under the authority of
14Section 6, the Department shall revoke the license of any
15distributor that is determined to have violated this paragraph.
16A person may not affix a stamp on a package of cigarettes,
17cigarette papers, wrappers, or tubes if that individual package
18has been marked for export outside the United States with a
19label or notice in compliance with Section 290.185 of Title 27
20of the Code of Federal Regulations. It is not a defense to a
21proceeding for violation of this paragraph that the label or
22notice has been removed, mutilated, obliterated, or altered in
23any manner.
24    Only distributors licensed under this Act and
25transporters, as defined in Section 9c of the Cigarette Tax
26Act, may possess unstamped original packages of cigarettes.

 

 

09600SB0044ham006- 26 -LRB096 03720 HLH 44901 a

1Prior to shipment to an Illinois retailer or secondary
2distributor, a stamp shall be applied to each original package
3of cigarettes sold to the retailer or secondary distributor. A
4distributor may apply a tax stamp only to an original package
5of cigarettes purchased or obtained directly from an in-state
6maker, manufacturer, or fabricator licensed as a distributor
7under Section 4 of this Act or an out-of-state maker,
8manufacturer, or fabricator holding a permit under Section 7 of
9this Act. A licensed distributor may ship or otherwise cause to
10be delivered unstamped original packages of cigarettes in,
11into, or from this State. A licensed distributor may transport
12unstamped original packages of cigarettes to a facility,
13wherever located, owned or controlled by such distributor;
14however, a distributor may not transport unstamped original
15packages of cigarettes to a facility where retail sales of
16cigarettes take place or to a facility where a secondary
17distributor makes sales for resale. Any licensed distributor
18that ships or otherwise causes to be delivered unstamped
19original packages of cigarettes into, within, or from this
20State shall ensure that the invoice or equivalent documentation
21and the bill of lading or freight bill for the shipment
22identifies the true name and address of the consignor or
23seller, the true name and address of the consignee or
24purchaser, and the quantity by brand style of the cigarettes so
25transported, provided that this Section shall not be construed
26as to impose any requirement or liability upon any common or

 

 

09600SB0044ham006- 27 -LRB096 03720 HLH 44901 a

1contract carrier.
2    Distributors making sales of cigarettes to secondary
3distributors shall add the amount of the tax to the price of
4the cigarettes sold by the distributors. Secondary
5distributors making sales of cigarettes to retailers shall
6include the amount of the tax in the price of the cigarettes
7sold to retailers. The amount of tax shall not be less than the
8amount of taxes imposed by the State and all local
9jurisdictions. The amount of local taxes shall be calculated
10based on the location of the retailer's place of business shown
11on the retailer's certificate of registration or
12sub-registration issued to the retailer pursuant to Section 2a
13of the Retailers' Occupation Tax Act. The original packages of
14cigarettes sold by the retailer shall bear all the required
15stamps, or other indicia, for the taxes included in the price
16of cigarettes.
17    Stamps, when required hereunder, shall be purchased from
18the Department, or any person authorized by the Department, by
19distributors. On and after July 1, 2003, payment for such
20stamps must be made by means of electronic funds transfer. The
21Department may refuse to sell stamps to any person who does not
22comply with the provisions of this Act. Beginning on June 6,
232002 and through June 30, 2002, persons holding valid licenses
24as distributors may purchase cigarette tax stamps up to an
25amount equal to 115% of the distributor's average monthly
26cigarette tax stamp purchases over the 12 calendar months prior

 

 

09600SB0044ham006- 28 -LRB096 03720 HLH 44901 a

1to June 6, 2002.
2    Prior to December 1, 1985, the Department shall allow a
3distributor 21 days in which to make final payment of the
4amount to be paid for such stamps, by allowing the distributor
5to make payment for the stamps at the time of purchasing them
6with a draft which shall be in such form as the Department
7prescribes, and which shall be payable within 21 days
8thereafter: Provided that such distributor has filed with the
9Department, and has received the Department's approval of, a
10bond, which is in addition to the bond required under Section 4
11of this Act, payable to the Department in an amount equal to
1280% of such distributor's average monthly tax liability to the
13Department under this Act during the preceding calendar year or
14$500,000, whichever is less. The bond shall be joint and
15several and shall be in the form of a surety company bond in
16such form as the Department prescribes, or it may be in the
17form of a bank certificate of deposit or bank letter of credit.
18The bond shall be conditioned upon the distributor's payment of
19the amount of any 21-day draft which the Department accepts
20from that distributor for the delivery of stamps to that
21distributor under this Act. The distributor's failure to pay
22any such draft, when due, shall also make such distributor
23automatically liable to the Department for a penalty equal to
2425% of the amount of such draft.
25    On and after December 1, 1985 and until July 1, 2003, the
26Department shall allow a distributor 30 days in which to make

 

 

09600SB0044ham006- 29 -LRB096 03720 HLH 44901 a

1final payment of the amount to be paid for such stamps, by
2allowing the distributor to make payment for the stamps at the
3time of purchasing them with a draft which shall be in such
4form as the Department prescribes, and which shall be payable
5within 30 days thereafter, and beginning on January 1, 2003 and
6thereafter, the draft shall be payable by means of electronic
7funds transfer: Provided that such distributor has filed with
8the Department, and has received the Department's approval of,
9a bond, which is in addition to the bond required under Section
104 of this Act, payable to the Department in an amount equal to
11150% of such distributor's average monthly tax liability to the
12Department under this Act during the preceding calendar year or
13$750,000, whichever is less, except that as to bonds filed on
14or after January 1, 1987, such additional bond shall be in an
15amount equal to 100% of such distributor's average monthly tax
16liability under this Act during the preceding calendar year or
17$750,000, whichever is less. The bond shall be joint and
18several and shall be in the form of a surety company bond in
19such form as the Department prescribes, or it may be in the
20form of a bank certificate of deposit or bank letter of credit.
21The bond shall be conditioned upon the distributor's payment of
22the amount of any 30-day draft which the Department accepts
23from that distributor for the delivery of stamps to that
24distributor under this Act. The distributor's failure to pay
25any such draft, when due, shall also make such distributor
26automatically liable to the Department for a penalty equal to

 

 

09600SB0044ham006- 30 -LRB096 03720 HLH 44901 a

125% of the amount of such draft.
2    Beginning on the effective date of this amendatory Act of
3the 96th General Assembly, the Department shall allow a
4distributor 10 days in which to make final payment of the
5amount to be paid for such stamps, by allowing the distributor
6to make payment for the stamps at the time of purchasing them
7with a draft, which shall be payable by means of electronic
8funds transfer and in such form as the Department prescribes,
9and which shall be payable within 10 days thereafter, provided
10that such distributor has filed with the Department, and has
11received the Department's approval of, a bond, which is in
12addition to the bond required under Section 4 of this Act,
13payable to the Department in an amount equal to 100% of that
14distributor's average monthly tax liability to the Department
15under this Act during the preceding calendar year or $750,000,
16whichever is less. The bond shall be joint and several and
17shall be in the form of a surety company bond in such form as
18the Department prescribes, or it may be in the form of a bank
19certificate of deposit or bank letter of credit. The bond shall
20be conditioned upon the distributor's payment of the amount of
21any 10-day draft which the Department accepts from that
22distributor for the delivery of stamps to that distributor
23under this Act. The distributor's failure to pay any such
24draft, when due, shall also make such distributor automatically
25liable to the Department for a penalty equal to 25% of the
26amount of such draft.

 

 

09600SB0044ham006- 31 -LRB096 03720 HLH 44901 a

1    Every prior continuous compliance taxpayer shall be exempt
2from all requirements under this Section concerning the
3furnishing of such bond, as defined in this Section, as a
4condition precedent to his being authorized to engage in the
5business licensed under this Act. This exemption shall continue
6for each such taxpayer until such time as he may be determined
7by the Department to be delinquent in the filing of any
8returns, or is determined by the Department (either through the
9Department's issuance of a final assessment which has become
10final under the Act, or by the taxpayer's filing of a return
11which admits tax to be due that is not paid) to be delinquent
12or deficient in the paying of any tax under this Act, at which
13time that taxpayer shall become subject to the bond
14requirements of this Section and, as a condition of being
15allowed to continue to engage in the business licensed under
16this Act, shall be required to furnish bond to the Department
17in such form as provided in this Section. Such taxpayer shall
18furnish such bond for a period of 2 years, after which, if the
19taxpayer has not been delinquent in the filing of any returns,
20or delinquent or deficient in the paying of any tax under this
21Act, the Department may reinstate such person as a prior
22continuance compliance taxpayer. Any taxpayer who fails to pay
23an admitted or established liability under this Act may also be
24required to post bond or other acceptable security with the
25Department guaranteeing the payment of such admitted or
26established liability.

 

 

09600SB0044ham006- 32 -LRB096 03720 HLH 44901 a

1    Any person aggrieved by any decision of the Department
2under this Section may, within the time allowed by law, protest
3and request a hearing, whereupon the Department shall give
4notice and shall hold a hearing in conformity with the
5provisions of this Act and then issue its final administrative
6decision in the matter to such person. In the absence of such a
7protest filed within the time allowed by law, the Department's
8decision shall become final without any further determination
9being made or notice given.
10    The Department shall discharge any surety and shall release
11and return any bond or security deposited, assigned, pledged,
12or otherwise provided to it by a taxpayer under this Section
13within 30 days after:
14        (1) such Taxpayer becomes a prior continuous
15    compliance taxpayer; or
16        (2) such taxpayer has ceased to collect receipts on
17    which he is required to remit tax to the Department, has
18    filed a final tax return, and has paid to the Department an
19    amount sufficient to discharge his remaining tax liability
20    as determined by the Department under this Act. The
21    Department shall make a final determination of the
22    taxpayer's outstanding tax liability as expeditiously as
23    possible after his final tax return has been filed. If the
24    Department cannot make such final determination within 45
25    days after receiving the final tax return, within such
26    period it shall so notify the taxpayer, stating its reasons

 

 

09600SB0044ham006- 33 -LRB096 03720 HLH 44901 a

1    therefor.
2    At the time of purchasing such stamps from the Department
3when purchase is required by this Act, or at the time when the
4tax which he has collected is remitted by a distributor to the
5Department without the purchase of stamps from the Department
6when that method of remitting the tax that has been collected
7is required or authorized by this Act, the distributor shall be
8allowed a discount during any year commencing July 1 and ending
9the following June 30 in accordance with the schedule set out
10hereinbelow, from the amount to be paid by him to the
11Department for such stamps, or to be paid by him to the
12Department on the basis of monthly remittances (as the case may
13be), to cover the cost, to such distributor, of collecting the
14tax herein imposed by affixing such stamps to the original
15packages of cigarettes sold by such distributor or by placing
16tax imprints underneath the sealed transparent wrapper of
17original packages of cigarettes sold by such distributor (as
18the case may be): (1) Prior to December 1, 1985, a discount
19equal to 1-2/3% of the amount of the tax up to and including
20the first $700,000 paid hereunder by such distributor to the
21Department during any such year; 1-1/3% of the next $700,000 of
22tax or any part thereof, paid hereunder by such distributor to
23the Department during any such year; 1% of the next $700,000 of
24tax, or any part thereof, paid hereunder by such distributor to
25the Department during any such year; and 2/3 of 1% of the
26amount of any additional tax paid hereunder by such distributor

 

 

09600SB0044ham006- 34 -LRB096 03720 HLH 44901 a

1to the Department during any such year or (2) On and after
2December 1, 1985, a discount equal to 1.75% of the amount of
3the tax payable under this Act up to and including the first
4$3,000,000 paid hereunder by such distributor to the Department
5during any such year and 1.5% of the amount of any additional
6tax paid hereunder by such distributor to the Department during
7any such year.
8    Two or more distributors that use a common means of
9affixing revenue tax stamps or that are owned or controlled by
10the same interests shall be treated as a single distributor for
11the purpose of computing the discount.
12    Cigarette manufacturers who are distributors under Section
137(a) of this Act, and who place their cigarettes in original
14packages which are contained inside a sealed transparent
15wrapper, shall be required to remit the tax which they are
16required to collect under this Act to the Department by
17remitting the amount thereof to the Department by the 5th day
18of each month, covering cigarettes shipped or otherwise
19delivered to points in Illinois to purchasers during the
20preceding calendar month, but a distributor need not remit to
21the Department the tax so collected by him from purchasers
22under this Act to the extent to which such distributor is
23required to remit the tax imposed by the Cigarette Tax Act to
24the Department with respect to the same cigarettes. All taxes
25upon cigarettes under this Act are a direct tax upon the retail
26consumer and shall conclusively be presumed to be precollected

 

 

09600SB0044ham006- 35 -LRB096 03720 HLH 44901 a

1for the purpose of convenience and facility only. Cigarette
2manufacturers that are distributors licensed under Section
37(a) of this Act and who place their cigarettes in original
4packages which are contained inside a sealed transparent
5wrapper, before delivering such cigarettes or causing such
6cigarettes to be delivered in this State to purchasers, shall
7evidence their obligation to collect and remit the tax due with
8respect to such cigarettes by imprinting language to be
9prescribed by the Department on each original package of such
10cigarettes underneath the sealed transparent outside wrapper
11of such original package, in such place thereon and in such
12manner as the Department may prescribe; provided (as stated
13hereinbefore) that this requirement does not apply when such
14distributor is required or authorized by the Cigarette Tax Act
15to place the tax imprint provided for in the last paragraph of
16Section 3 of that Act underneath the sealed transparent wrapper
17of such original package of cigarettes. Such imprinted language
18shall acknowledge the manufacturer's collection and payment of
19or liability for the tax imposed by this Act with respect to
20such cigarettes.
21    The Department shall adopt the design or designs of the tax
22stamps and shall procure the printing of such stamps in such
23amounts and denominations as it deems necessary to provide for
24the affixation of the proper amount of tax stamps to each
25original package of cigarettes.
26    Where tax stamps are required, the Department may authorize

 

 

09600SB0044ham006- 36 -LRB096 03720 HLH 44901 a

1distributors to affix revenue tax stamps by imprinting tax
2meter stamps upon original packages of cigarettes. The
3Department shall adopt rules and regulations relating to the
4imprinting of such tax meter stamps as will result in payment
5of the proper taxes as herein imposed. No distributor may affix
6revenue tax stamps to original packages of cigarettes by
7imprinting meter stamps thereon unless such distributor has
8first obtained permission from the Department to employ this
9method of affixation. The Department shall regulate the use of
10tax meters and may, to assure the proper collection of the
11taxes imposed by this Act, revoke or suspend the privilege,
12theretofore granted by the Department to any distributor, to
13imprint tax meter stamps upon original packages of cigarettes.
14    The tax hereby imposed and not paid pursuant to this
15Section shall be paid to the Department directly by any person
16using such cigarettes within this State, pursuant to Section 12
17hereof.
18    A distributor shall not affix, or cause to be affixed, any
19stamp or imprint to a package of cigarettes, as provided for in
20this Section, if the tobacco product manufacturer, as defined
21in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
22that made or sold the cigarettes has failed to become a
23participating manufacturer, as defined in subdivision (a)(1)
24of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
25or has failed to create a qualified escrow fund for any
26cigarettes manufactured by the tobacco product manufacturer

 

 

09600SB0044ham006- 37 -LRB096 03720 HLH 44901 a

1and sold in this State or otherwise failed to bring itself into
2compliance with subdivision (a)(2) of Section 15 of the Tobacco
3Product Manufacturers' Escrow Act.
4(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
5    (35 ILCS 135/12)  (from Ch. 120, par. 453.42)
6    Sec. 12. Declaration of possession of cigarettes on which
7tax not paid.
8    (a) When cigarettes are acquired for use in this State by a
9person (including a distributor as well as any other person),
10who did not pay the tax herein imposed to a distributor, the
11person, within 30 days after acquiring the cigarettes, shall
12file with the Department a return declaring the possession of
13the cigarettes and shall transmit with the return to the
14Department the tax imposed by this Act.
15    (b) On receipt of the return and payment of the tax as
16required by paragraph (a), the Department may furnish the
17person with a suitable tax stamp to be affixed to the package
18of cigarettes upon which the tax has been paid if the
19Department determines that the cigarettes still exist.
20    (c) The return referred to in paragraph (a) shall contain
21the name and address of the person possessing the cigarettes
22involved, the location of the cigarettes and the quantity,
23brand name, place, and date of the acquisition of the
24cigarettes.
25    (d) Nothing in this Section shall permit a secondary

 

 

09600SB0044ham006- 38 -LRB096 03720 HLH 44901 a

1distributor to purchase unstamped original packages of
2cigarettes or to purchase original packages of cigarettes from
3a person other than a licensed distributor.
4    (e) The provisions of this Section are not subject to the
5Uniform Penalty and Interest Act.
6(Source: P.A. 96-1027, eff. 7-12-10.)
 
7    Section 20. The Tobacco Products Tax Act of 1995 is amended
8by changing Sections 10-5, 10-10, and 10-30 as follows:
 
9    (35 ILCS 143/10-5)
10    Sec. 10-5. Definitions. For purposes of this Act:
11    "Business" means any trade, occupation, activity, or
12enterprise engaged in, at any location whatsoever, for the
13purpose of selling tobacco products.
14    "Cigarette" has the meaning ascribed to the term in Section
151 of the Cigarette Tax Act.
16    "Correctional Industries program" means a program run by a
17State penal institution in which residents of the penal
18institution produce tobacco products for sale to persons
19incarcerated in penal institutions or resident patients of a
20State operated mental health facility.
21    "Department" means the Illinois Department of Revenue.
22    "Distributor" means any of the following:
23        (1) Any manufacturer or wholesaler in this State
24    engaged in the business of selling tobacco products who

 

 

09600SB0044ham006- 39 -LRB096 03720 HLH 44901 a

1    sells, exchanges, or distributes tobacco products to
2    retailers or consumers in this State.
3        (2) Any manufacturer or wholesaler engaged in the
4    business of selling tobacco products from without this
5    State who sells, exchanges, distributes, ships, or
6    transports tobacco products to retailers or consumers
7    located in this State, so long as that manufacturer or
8    wholesaler has or maintains within this State, directly or
9    by subsidiary, an office, sales house, or other place of
10    business, or any agent or other representative operating
11    within this State under the authority of the person or
12    subsidiary, irrespective of whether the place of business
13    or agent or other representative is located here
14    permanently or temporarily.
15        (3) Any retailer who receives tobacco products on which
16    the tax has not been or will not be paid by another
17    distributor.
18    "Distributor" does not include any person, wherever
19resident or located, who makes, manufactures, or fabricates
20tobacco products as part of a Correctional Industries program
21for sale to residents incarcerated in penal institutions or
22resident patients of a State operated mental health facility.
23    "Manufacturer" means any person, wherever resident or
24located, who manufactures and sells tobacco products, except a
25person who makes, manufactures, or fabricates tobacco products
26as a part of a Correctional Industries program for sale to

 

 

09600SB0044ham006- 40 -LRB096 03720 HLH 44901 a

1persons incarcerated in penal institutions or resident
2patients of a State operated mental health facility.
3    "Moist snuff" means any finely cut, ground, or powdered
4tobacco that is not intended to be smoked, but shall not
5include any finely cut, ground, or powdered tobacco that is
6intended to be placed in the nasal cavity.
7    "Person" means any natural individual, firm, partnership,
8association, joint stock company, joint venture, limited
9liability company, or public or private corporation, however
10formed, or a receiver, executor, administrator, trustee,
11conservator, or other representative appointed by order of any
12court.
13    "Place of business" means and includes any place where
14tobacco products are sold or where tobacco products are
15manufactured, stored, or kept for the purpose of sale or
16consumption, including any vessel, vehicle, airplane, train,
17or vending machine.
18    "Retailer" means any person in this State engaged in the
19business of selling tobacco products to consumers in this
20State, regardless of quantity or number of sales.
21    "Sale" means any transfer, exchange, or barter in any
22manner or by any means whatsoever for a consideration and
23includes all sales made by persons.
24    "Tobacco products" means any cigars; cheroots; stogies;
25periques; granulated, plug cut, crimp cut, ready rubbed, and
26other smoking tobacco; snuff (including moist snuff) or snuff

 

 

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1flour; cavendish; plug and twist tobacco; fine-cut and other
2chewing tobaccos; shorts; refuse scraps, clippings, cuttings,
3and sweeping of tobacco; and other kinds and forms of tobacco,
4prepared in such manner as to be suitable for chewing or
5smoking in a pipe or otherwise, or both for chewing and
6smoking; but does not include cigarettes or tobacco purchased
7for the manufacture of cigarettes by cigarette distributors and
8manufacturers defined in the Cigarette Tax Act and persons who
9make, manufacture, or fabricate cigarettes as a part of a
10Correctional Industries program for sale to residents
11incarcerated in penal institutions or resident patients of a
12State operated mental health facility.
13    "Wholesale price" means the established list price for
14which a manufacturer sells tobacco products to a distributor,
15before the allowance of any discount, trade allowance, rebate,
16or other reduction. In the absence of such an established list
17price, the manufacturer's invoice price at which the
18manufacturer sells the tobacco product to unaffiliated
19distributors, before any discounts, trade allowances, rebates,
20or other reductions, shall be presumed to be the wholesale
21price.
22    "Wholesaler" means any person, wherever resident or
23located, engaged in the business of selling tobacco products to
24others for the purpose of resale.
25(Source: P.A. 92-231, eff. 8-2-01.)
 

 

 

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1    (35 ILCS 143/10-10)
2    Sec. 10-10. Tax imposed. On the first day of the third
3month after the month in which this Act becomes law and until
4March 1, 2011, a tax is imposed on any person engaged in
5business as a distributor of tobacco products, as defined in
6Section 10-5, at the rate of 18% of the wholesale price of
7tobacco products sold or otherwise disposed of to retailers or
8consumers located in this State. Beginning on March 1, 2011, a
9tax is imposed on any person engaged in business as a
10distributor of tobacco products, as defined in Section 10-5, at
11the rate of (i) 18% of the wholesale price of tobacco products,
12other than moist snuff, sold or otherwise disposed of to
13retailers or consumers located in this State and (ii) $0.20 per
14ounce of moist snuff, and a proportionate tax at the like rate
15on all fractional parts of an ounce, sold or otherwise disposed
16of to retailers or consumers located in this State. The tax is
17in addition to all other occupation or privilege taxes imposed
18by the State of Illinois, by any political subdivision thereof,
19or by any municipal corporation. However, the tax is not
20imposed upon any activity in that business in interstate
21commerce or otherwise, to the extent to which that activity may
22not, under the Constitution and Statutes of the United States,
23be made the subject of taxation by this State. The tax is also
24not imposed on sales made to the United States or any entity
25thereof.
26    Beginning on March 1, 2011, the tax rate imposed per ounce

 

 

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1of moist snuff may not exceed 11% of the tax imposed upon a
2package of 20 cigarettes pursuant to the Cigarette Tax Act.
3    All moneys received by the Department under this Act shall
4be paid into the Long-Term Care Provider Fund of the State
5Treasury.
6(Source: P.A. 92-231, eff. 8-2-01.)
 
7    (35 ILCS 143/10-30)
8    Sec. 10-30. Returns. Every distributor shall, on or before
9the 15th day of each month, file a return with the Department
10covering the preceding calendar month. The return shall
11disclose the wholesale price for all tobacco products and the
12quantity of moist snuff sold or otherwise disposed of and other
13information that the Department may reasonably require. The
14return shall be filed upon a form prescribed and furnished by
15the Department.
16    At the time when any return of any distributor is due to be
17filed with the Department, the distributor shall also remit to
18the Department the tax liability that the distributor has
19incurred for transactions occurring in the preceding calendar
20month.
21(Source: P.A. 89-21, eff. 6-6-95.)
 
22    Section 99. Effective date. This Act takes effect upon
23becoming law.".