97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB0006

 

Introduced 1/27/2011, by Sen. John J. Cullerton

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Cigarette Tax Act and the Cigarette Use Tax Act. Provides that an additional tax of 38 mills per cigarette is imposed beginning March 1, 2011. Provides that an additional tax of 12.5 mills per cigarette is imposed beginning March 1, 2012. Provides that proceeds from the additional taxes shall be deposited into the Long-Term Care Provider Fund and the Fund for the Advancement of Education. Amends the State Finance Act to create the Fund for the Advancement of Education. Provides that retailers and distributors who have stamped cigarettes in their possession when the additional tax takes effect are not required to pay the additional tax on those stamped cigarettes, except that retailers and distributors are required to pay the additional tax to the extent the average monthly volume of cigarette stamps in the retailer or distributor's possession exceeds the average monthly volume of cigarette stamps purchased by the retailer or distributor in the previous calendar year. Allows distributors to make payment for tax stamps by draft, which shall be payable within 10 days after purchase. Amends the Tobacco Products Tax Act. Provides that moist snuff is considered a tobacco product. Provides that the tax is imposed on moist snuff at the rate of $0.20 per ounce. Provides that, beginning on March 1, 2011, the tax rate imposed per ounce of moist snuff may not exceed 11% of the tax imposed upon a package of 20 cigarettes pursuant to the Cigarette Tax Act. Effective immediately.


LRB097 06649 HLH 46735 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB0006LRB097 06649 HLH 46735 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Finance Act is amended by adding
5Sections 5.786 and 6z-87 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-87 new)
9    Sec. 6z-87. 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.
 
16    Section 10. The Cigarette Tax Act is amended by changing
17Sections 2 and 3 as follows:
 
18    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
19    Sec. 2. Tax imposed; rate; collection, payment, and
20distribution; discount.

 

 

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1    (a) A tax is imposed upon any person engaged in business as
2a retailer of cigarettes in this State at the rate of 5 1/2
3mills per cigarette sold, or otherwise disposed of in the
4course of such business in this State. In addition to any other
5tax imposed by this Act, a tax is imposed upon any person
6engaged in business as a retailer of cigarettes in this State
7at a rate of 1/2 mill per cigarette sold or otherwise disposed
8of in the course of such business in this State on and after
9January 1, 1947, and shall be paid into the Metropolitan Fair
10and Exposition Authority Reconstruction Fund or as otherwise
11provided in Section 29. On and after December 1, 1985, in
12addition to any other tax imposed by this Act, a tax is imposed
13upon any person engaged in business as a retailer of cigarettes
14in this State at a rate of 4 mills per cigarette sold or
15otherwise disposed of in the course of such business in this
16State. Of the additional tax imposed by this amendatory Act of
171985, $9,000,000 of the moneys received by the Department of
18Revenue pursuant to this Act shall be paid each month into the
19Common School Fund. On and after the effective date of this
20amendatory Act of 1989, in addition to any other tax imposed by
21this Act, a tax is imposed upon any person engaged in business
22as a retailer of cigarettes at the rate of 5 mills per
23cigarette sold or otherwise disposed of in the course of such
24business in this State. On and after the effective date of this
25amendatory Act of 1993, in addition to any other tax imposed by
26this Act, a tax is imposed upon any person engaged in business

 

 

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1as a retailer of cigarettes at the rate of 7 mills per
2cigarette sold or otherwise disposed of in the course of such
3business in this State. On and after December 15, 1997, in
4addition to any other tax imposed by this Act, a tax is imposed
5upon any person engaged in business as a retailer of cigarettes
6at the rate of 7 mills per cigarette sold or otherwise disposed
7of in the course of such business of this State. All of the
8moneys received by the Department of Revenue pursuant to this
9Act and the Cigarette Use Tax Act from the additional taxes
10imposed by this amendatory Act of 1997, shall be paid each
11month into the Common School Fund. On and after July 1, 2002,
12in addition to any other tax imposed by this Act, a tax is
13imposed upon any person engaged in business as a retailer of
14cigarettes at the rate of 20.0 mills per cigarette sold or
15otherwise disposed of in the course of such business in this
16State. Beginning on March 1, 2011, in addition to any other tax
17imposed by this Act, a tax is imposed upon any person engaged
18in business as a retailer of cigarettes at the rate of 38 mills
19per cigarette sold or otherwise disposed of in the course of
20such business in this State. Beginning on March 1, 2012, in
21addition to any other tax imposed by this Act, a tax is imposed
22upon any person engaged in business as a retailer of cigarettes
23at the rate of 12.5 mills per cigarette sold or otherwise
24disposed of in the course of such business in this State. Of
25the moneys received by the Department of Revenue under this Act
26and the Cigarette Use Tax Act from the additional taxes imposed

 

 

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1by this amendatory Act of the 97th General Assembly (i) an
2amount equal to 0.5 mills per cigarette sold or otherwise
3disposed of shall be paid each month into the Long-Term Care
4Provider Fund and (ii) the balance shall be paid each month
5into the Fund for the Advancement of Education, a special fund
6in the State treasury. The payment of such taxes shall be
7evidenced by a stamp affixed to each original package of
8cigarettes, or an authorized substitute for such stamp
9imprinted on each original package of such cigarettes
10underneath the sealed transparent outside wrapper of such
11original package, as hereinafter provided. However, such taxes
12are not imposed upon any activity in such business in
13interstate commerce or otherwise, which activity may not under
14the Constitution and statutes of the United States be made the
15subject of taxation by this State.
16    Beginning on the effective date of this amendatory Act of
17the 92nd General Assembly and through June 30, 2006, all of the
18moneys received by the Department of Revenue pursuant to this
19Act and the Cigarette Use Tax Act, other than the moneys that
20are dedicated to the Common School Fund, shall be distributed
21each month as follows: first, there shall be paid into the
22General Revenue Fund an amount which, when added to the amount
23paid into the Common School Fund for that month, equals
24$33,300,000, except that in the month of August of 2004, this
25amount shall equal $83,300,000; then, from the moneys
26remaining, if any amounts required to be paid into the General

 

 

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1Revenue Fund in previous months remain unpaid, those amounts
2shall be paid into the General Revenue Fund; then, beginning on
3April 1, 2003, from the moneys remaining, $5,000,000 per month
4shall be paid into the School Infrastructure Fund; then, if any
5amounts required to be paid into the School Infrastructure Fund
6in previous months remain unpaid, those amounts shall be paid
7into the School Infrastructure Fund; then the moneys remaining,
8if any, shall be paid into the Long-Term Care Provider Fund. To
9the extent that more than $25,000,000 has been paid into the
10General Revenue Fund and Common School Fund per month for the
11period of July 1, 1993 through the effective date of this
12amendatory Act of 1994 from combined receipts of the Cigarette
13Tax Act and the Cigarette Use Tax Act, notwithstanding the
14distribution provided in this Section, the Department of
15Revenue is hereby directed to adjust the distribution provided
16in this Section to increase the next monthly payments to the
17Long Term Care Provider Fund by the amount paid to the General
18Revenue Fund and Common School Fund in excess of $25,000,000
19per month and to decrease the next monthly payments to the
20General Revenue Fund and Common School Fund by that same excess
21amount.
22    Beginning on July 1, 2006, all of the moneys received by
23the Department of Revenue pursuant to this Act and the
24Cigarette Use Tax Act, other than the moneys that are dedicated
25to the Common School Fund and, beginning on the effective date
26of this amendatory Act of the 97th General Assembly, other than

 

 

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1the moneys from the additional taxes imposed by this amendatory
2Act of the 97th General Assembly that must be paid each month
3into the Long-Term Care Provider Fund and the Fund for the
4Advancement of Education, shall be distributed each month as
5follows: first, there shall be paid into the General Revenue
6Fund an amount that, when added to the amount paid into the
7Common School Fund for that month, equals $29,200,000; then,
8from the moneys remaining, if any amounts required to be paid
9into the General Revenue Fund in previous months remain unpaid,
10those amounts shall be paid into the General Revenue Fund; then
11from the moneys remaining, $5,000,000 per month shall be paid
12into the School Infrastructure Fund; then, if any amounts
13required to be paid into the School Infrastructure Fund in
14previous months remain unpaid, those amounts shall be paid into
15the School Infrastructure Fund; then the moneys remaining, if
16any, shall be paid into the Long-Term Care Provider Fund.
17    When any tax imposed herein terminates or has terminated,
18distributors who have bought stamps while such tax was in
19effect and who therefore paid such tax, but who can show, to
20the Department's satisfaction, that they sold the cigarettes to
21which they affixed such stamps after such tax had terminated
22and did not recover the tax or its equivalent from purchasers,
23shall be allowed by the Department to take credit for such
24absorbed tax against subsequent tax stamp purchases from the
25Department by such distributor.
26    The impact of the tax levied by this Act is imposed upon

 

 

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1the retailer and shall be prepaid or pre-collected by the
2distributor for the purpose of convenience and facility only,
3and the amount of the tax shall be added to the price of the
4cigarettes sold by such distributor. Collection of the tax
5shall be evidenced by a stamp or stamps affixed to each
6original package of cigarettes, as hereinafter provided.
7    Each distributor shall collect the tax from the retailer at
8or before the time of the sale, shall affix the stamps as
9hereinafter required, and shall remit the tax collected from
10retailers to the Department, as hereinafter provided. Any
11distributor who fails to properly collect and pay the tax
12imposed by this Act shall be liable for the tax. Any
13distributor having cigarettes to which stamps have been affixed
14in his possession for sale on the effective date of this
15amendatory Act of 1989 shall not be required to pay the
16additional tax imposed by this amendatory Act of 1989 on such
17stamped cigarettes. Any distributor having cigarettes to which
18stamps have been affixed in his or her possession for sale at
1912:01 a.m. on the effective date of this amendatory Act of
201993, is required to pay the additional tax imposed by this
21amendatory Act of 1993 on such stamped cigarettes. This
22payment, less the discount provided in subsection (b), shall be
23due when the distributor first makes a purchase of cigarette
24tax stamps after the effective date of this amendatory Act of
251993, or on the first due date of a return under this Act after
26the effective date of this amendatory Act of 1993, whichever

 

 

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1occurs first. Any distributor having cigarettes to which stamps
2have been affixed in his possession for sale on December 15,
31997 shall not be required to pay the additional tax imposed by
4this amendatory Act of 1997 on such stamped cigarettes.
5    Any distributor having cigarettes to which stamps have been
6affixed in his or her possession for sale on July 1, 2002 shall
7not be required to pay the additional tax imposed by this
8amendatory Act of the 92nd General Assembly on those stamped
9cigarettes. Any retailer having cigarettes in his or her
10possession on March 1, 2011 to which tax stamps have been
11affixed is not required to pay the additional tax that begins
12on March 1, 2011 imposed by this amendatory Act of the 97th
13General Assembly on those stamped cigarettes. Any distributor
14having cigarettes in his or her possession on March 1, 2011 to
15which tax stamps have been affixed is required to pay the
16additional tax that begins on March 1, 2011 imposed by this
17amendatory Act of the 97th General Assembly to the extent the
18calendar year 2011 average monthly volume of cigarette stamps
19in the distributor's possession exceeds the average monthly
20volume of cigarette stamps purchased by the distributor in
21calendar year 2010. This payment, less the discount provided in
22subsection (b), is due when the distributor first makes a
23purchase of cigarette stamps on or after March 1, 2011 or on
24the first due date of a return under this Act occurring on or
25after March 1, 2011, whichever occurs first. Any retailer
26having cigarettes in his or her possession on March 1, 2012 to

 

 

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1which tax stamps have been affixed is not required to pay the
2additional tax that begins on March 1, 2012 imposed by this
3amendatory Act of the 97th General Assembly on those stamped
4cigarettes. Any distributor having cigarettes in his or her
5possession on March 1, 2012 to which tax stamps have been
6affixed is required to pay the additional tax that begins on
7March 1, 2012 imposed by this amendatory Act of the 97th
8General Assembly to the extent the calendar year 2012 average
9monthly volume of cigarette stamps in the distributor's
10possession exceeds the average monthly volume of cigarette
11stamps purchased by the distributor in calendar year 2011. This
12payment, less the discount provided in subsection (b), is due
13when the distributor first makes a purchase of cigarette stamps
14on or after March 1, 2012 or on the first due date of a return
15under this Act occurring on or after March 1, 2012, whichever
16occurs first.
17    Distributors making sales of cigarettes to secondary
18distributors shall add the amount of the tax to the price of
19the cigarettes sold by the distributors. Secondary
20distributors making sales of cigarettes to retailers shall
21include the amount of the tax in the price of the cigarettes
22sold to retailers. The amount of tax shall not be less than the
23amount of taxes imposed by the State and all local
24jurisdictions. The amount of local taxes shall be calculated
25based on the location of the retailer's place of business shown
26on the retailer's certificate of registration or

 

 

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1sub-registration issued to the retailer pursuant to Section 2a
2of the Retailers' Occupation Tax Act. The original packages of
3cigarettes sold to the retailer shall bear all the required
4stamps, or other indicia, for the taxes included in the price
5of cigarettes.
6    The amount of the Cigarette Tax imposed by this Act shall
7be separately stated, apart from the price of the goods, by
8distributors, secondary distributors, and retailers, in all
9bills and sales invoices.
10    (b) The distributor shall be required to collect the taxes
11provided under paragraph (a) hereof, and, to cover the costs of
12such collection, shall be allowed a discount during any year
13commencing July 1st and ending the following June 30th in
14accordance with the schedule set out hereinbelow, which
15discount shall be allowed at the time of purchase of the stamps
16when purchase is required by this Act, or at the time when the
17tax is remitted to the Department without the purchase of
18stamps from the Department when that method of paying the tax
19is required or authorized by this Act. Prior to December 1,
201985, a discount equal to 1 2/3% of the amount of the tax up to
21and including the first $700,000 paid hereunder by such
22distributor to the Department during any such year; 1 1/3% of
23the next $700,000 of tax or any part thereof, paid hereunder by
24such distributor to the Department during any such year; 1% of
25the next $700,000 of tax, or any part thereof, paid hereunder
26by such distributor to the Department during any such year, and

 

 

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12/3 of 1% of the amount of any additional tax paid hereunder by
2such distributor to the Department during any such year shall
3apply. On and after December 1, 1985, a discount equal to 1.75%
4of the amount of the tax payable under this Act up to and
5including the first $3,000,000 paid hereunder by such
6distributor to the Department during any such year and 1.5% of
7the amount of any additional tax paid hereunder by such
8distributor to the Department during any such year shall apply.
9    Two or more distributors that use a common means of
10affixing revenue tax stamps or that are owned or controlled by
11the same interests shall be treated as a single distributor for
12the purpose of computing the discount.
13    (c) The taxes herein imposed are in addition to all other
14occupation or privilege taxes imposed by the State of Illinois,
15or by any political subdivision thereof, or by any municipal
16corporation.
17(Source: P.A. 96-1027, eff. 7-12-10.)
 
18    (35 ILCS 130/3)  (from Ch. 120, par. 453.3)
19    Sec. 3. Affixing tax stamp; remitting tax to the
20Department. Payment of the taxes imposed by Section 2 of this
21Act shall (except as hereinafter provided) be evidenced by
22revenue tax stamps affixed to each original package of
23cigarettes. Each distributor of cigarettes, before delivering
24or causing to be delivered any original package of cigarettes
25in this State to a purchaser, shall firmly affix a proper stamp

 

 

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

 

 

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

 

 

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1as distributors under this Act. On and after July 1, 2003,
2payment for such stamps must be made by means of electronic
3funds transfer. The Department may refuse to sell stamps to any
4person who does not comply with the provisions of this Act.
5Beginning on the effective date of this amendatory Act of the
692nd General Assembly and through June 30, 2002, persons
7holding valid licenses as distributors may purchase cigarette
8tax stamps up to an amount equal to 115% of the distributor's
9average monthly cigarette tax stamp purchases over the 12
10calendar months prior to the effective date of this amendatory
11Act of the 92nd General Assembly.
12    Prior to December 1, 1985, the Department shall allow a
13distributor 21 days in which to make final payment of the
14amount to be paid for such stamps, by allowing the distributor
15to make payment for the stamps at the time of purchasing them
16with a draft which shall be in such form as the Department
17prescribes, and which shall be payable within 21 days
18thereafter: Provided that such distributor has filed with the
19Department, and has received the Department's approval of, a
20bond, which is in addition to the bond required under Section 4
21of this Act, payable to the Department in an amount equal to
2280% of such distributor's average monthly tax liability to the
23Department under this Act during the preceding calendar year or
24$500,000, whichever is less. The Bond shall be joint and
25several and shall be in the form of a surety company bond in
26such form as the Department prescribes, or it may be in the

 

 

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1form of a bank certificate of deposit or bank letter of credit.
2The bond shall be conditioned upon the distributor's payment of
3amount of any 21-day draft which the Department accepts from
4that distributor for the delivery of stamps to that distributor
5under this Act. The distributor's failure to pay any such
6draft, when due, shall also make such distributor automatically
7liable to the Department for a penalty equal to 25% of the
8amount of such draft.
9    On and after December 1, 1985 and until July 1, 2003, the
10Department shall allow a distributor 30 days in which to make
11final payment of the amount to be paid for such stamps, by
12allowing the distributor to make payment for the stamps at the
13time of purchasing them with a draft which shall be in such
14form as the Department prescribes, and which shall be payable
15within 30 days thereafter, and beginning on January 1, 2003 and
16thereafter, the draft shall be payable by means of electronic
17funds transfer: Provided that such distributor has filed with
18the Department, and has received the Department's approval of,
19a bond, which is in addition to the bond required under Section
204 of this Act, payable to the Department in an amount equal to
21150% of such distributor's average monthly tax liability to the
22Department under this Act during the preceding calendar year or
23$750,000, whichever is less, except that as to bonds filed on
24or after January 1, 1987, such additional bond shall be in an
25amount equal to 100% of such distributor's average monthly tax
26liability under this Act during the preceding calendar year or

 

 

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1$750,000, whichever is less. The bond shall be joint and
2several and shall be in the form of a surety company bond in
3such form as the Department prescribes, or it may be in the
4form of a bank certificate of deposit or bank letter of credit.
5The bond shall be conditioned upon the distributor's payment of
6the amount of any 30-day draft which the Department accepts
7from that distributor for the delivery of stamps to that
8distributor under this Act. The distributor's failure to pay
9any such draft, when due, shall also make such distributor
10automatically liable to the Department for a penalty equal to
1125% of the amount of such draft.
12    Beginning on the effective date of this amendatory Act of
13the 97th General Assembly, the Department shall allow a
14distributor 10 days in which to make final payment of the
15amount to be paid for such stamps, by allowing the distributor
16to make payment for the stamps at the time of purchasing them
17with a draft, which shall be payable by means of electronic
18funds transfer and in such form as the Department prescribes,
19and which shall be payable within 10 days thereafter, provided
20that such distributor has filed with the Department, and has
21received the Department's approval of, a bond, which is in
22addition to the bond required under Section 4 of this Act,
23payable to the Department in an amount equal to 100% of that
24distributor's average monthly tax liability to the Department
25under this Act during the preceding calendar year or $750,000,
26whichever is less. The bond shall be joint and several and

 

 

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1shall be in the form of a surety company bond in such form as
2the Department prescribes, or it may be in the form of a bank
3certificate of deposit or bank letter of credit. The bond shall
4be conditioned upon the distributor's payment of the amount of
5any 10-day draft which the Department accepts from that
6distributor for the delivery of stamps to that distributor
7under this Act. The distributor's failure to pay any such
8draft, when due, shall also make such distributor automatically
9liable to the Department for a penalty equal to 25% of the
10amount of such draft.
11    Every prior continuous compliance taxpayer shall be exempt
12from all requirements under this Section concerning the
13furnishing of such bond, as defined in this Section, as a
14condition precedent to his being authorized to engage in the
15business licensed under this Act. This exemption shall continue
16for each such taxpayer until such time as he may be determined
17by the Department to be delinquent in the filing of any
18returns, or is determined by the Department (either through the
19Department's issuance of a final assessment which has become
20final under the Act, or by the taxpayer's filing of a return
21which admits tax to be due that is not paid) to be delinquent
22or deficient in the paying of any tax under this Act, at which
23time that taxpayer shall become subject to the bond
24requirements of this Section and, as a condition of being
25allowed to continue to engage in the business licensed under
26this Act, shall be required to furnish bond to the Department

 

 

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1in such form as provided in this Section. Such taxpayer shall
2furnish such bond for a period of 2 years, after which, if the
3taxpayer has not been delinquent in the filing of any returns,
4or delinquent or deficient in the paying of any tax under this
5Act, the Department may reinstate such person as a prior
6continuance compliance taxpayer. Any taxpayer who fails to pay
7an admitted or established liability under this Act may also be
8required to post bond or other acceptable security with the
9Department guaranteeing the payment of such admitted or
10established liability.
11    Any person aggrieved by any decision of the Department
12under this Section may, within the time allowed by law, protest
13and request a hearing, whereupon the Department shall give
14notice and shall hold a hearing in conformity with the
15provisions of this Act and then issue its final administrative
16decision in the matter to such person. In the absence of such a
17protest filed within the time allowed by law, the Department's
18decision shall become final without any further determination
19being made or notice given.
20    The Department shall discharge any surety and shall release
21and return any bond or security deposited, assigned, pledged,
22or otherwise provided to it by a taxpayer under this Section
23within 30 days after:
24    (1) Such taxpayer becomes a prior continuous compliance
25taxpayer; or
26    (2) Such taxpayer has ceased to collect receipts on which

 

 

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1he is required to remit tax to the Department, has filed a
2final tax return, and has paid to the Department an amount
3sufficient to discharge his remaining tax liability as
4determined by the Department under this Act. The Department
5shall make a final determination of the taxpayer's outstanding
6tax liability as expeditiously as possible after his final tax
7return has been filed. If the Department cannot make such final
8determination within 45 days after receiving the final tax
9return, within such period it shall so notify the taxpayer,
10stating its reasons therefor.
11    The Department may authorize distributors to affix revenue
12tax stamps by imprinting tax meter stamps upon original
13packages of cigarettes. The Department shall adopt rules and
14regulations relating to the imprinting of such tax meter stamps
15as will result in payment of the proper taxes as herein
16imposed. No distributor may affix revenue tax stamps to
17original packages of cigarettes by imprinting tax meter stamps
18thereon unless such distributor has first obtained permission
19from the Department to employ this method of affixation. The
20Department shall regulate the use of tax meters and may, to
21assure the proper collection of the taxes imposed by this Act,
22revoke or suspend the privilege, theretofore granted by the
23Department to any distributor, to imprint tax meter stamps upon
24original packages of cigarettes.
25    Illinois cigarette manufacturers who place their
26cigarettes in original packages which are contained inside a

 

 

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1sealed transparent wrapper, and similar out-of-State cigarette
2manufacturers who elect to qualify and are accepted by the
3Department as distributors under Section 4b(a) of this Act,
4shall pay the taxes imposed by this Act by remitting the amount
5thereof to the Department by the 5th day of each month covering
6cigarettes shipped or otherwise delivered in Illinois to
7purchasers during the preceding calendar month. Such
8manufacturers of cigarettes in original packages which are
9contained inside a sealed transparent wrapper, before
10delivering such cigarettes or causing such cigarettes to be
11delivered in this State to purchasers, shall evidence their
12obligation to remit the taxes due with respect to such
13cigarettes by imprinting language to be prescribed by the
14Department on each original package of such cigarettes
15underneath the sealed transparent outside wrapper of such
16original package, in such place thereon and in such manner as
17the Department may designate. Such imprinted language shall
18acknowledge the manufacturer's payment of or liability for the
19tax imposed by this Act with respect to the distribution of
20such cigarettes.
21    A distributor shall not affix, or cause to be affixed, any
22stamp or imprint to a package of cigarettes, as provided for in
23this Section, if the tobacco product manufacturer, as defined
24in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
25that made or sold the cigarettes has failed to become a
26participating manufacturer, as defined in subdivision (a)(1)

 

 

SB0006- 21 -LRB097 06649 HLH 46735 b

1of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
2or has failed to create a qualified escrow fund for any
3cigarettes manufactured by the tobacco product manufacturer
4and sold in this State or otherwise failed to bring itself into
5compliance with subdivision (a)(2) of Section 15 of the Tobacco
6Product Manufacturers' Escrow Act.
7(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;
896-1027, eff. 7-12-10.)
 
9    Section 15. The Cigarette Use Tax Act is amended by
10changing Sections 2, 3, and 12 as follows:
 
11    (35 ILCS 135/2)  (from Ch. 120, par. 453.32)
12    Sec. 2. A tax is imposed upon the privilege of using
13cigarettes in this State, at the rate of 6 mills per cigarette
14so used. On and after December 1, 1985, in addition to any
15other tax imposed by this Act, a tax is imposed upon the
16privilege of using cigarettes in this State at a rate of 4
17mills per cigarette so used. On and after the effective date of
18this amendatory Act of 1989, in addition to any other tax
19imposed by this Act, a tax is imposed upon the privilege of
20using cigarettes in this State at the rate of 5 mills per
21cigarette so used. On and after the effective date of this
22amendatory Act of 1993, in addition to any other tax imposed by
23this Act, a tax is imposed upon the privilege of using
24cigarettes in this State at a rate of 7 mills per cigarette so

 

 

SB0006- 22 -LRB097 06649 HLH 46735 b

1used. On and after December 15, 1997, in addition to any other
2tax imposed by this Act, a tax is imposed upon the privilege of
3using cigarettes in this State at a rate of 7 mills per
4cigarette so used. On and after July 1, 2002, in addition to
5any other tax imposed by this Act, a tax is imposed upon the
6privilege of using cigarettes in this State at a rate of 20.0
7mills per cigarette so used. Beginning on March 1, 2011, in
8addition to any other tax imposed by this Act, a tax is imposed
9upon the privilege of using cigarettes in this State at a rate
10of 38 mills per cigarette so used. Beginning on March 1, 2012,
11in addition to any other tax imposed by this Act, a tax is
12imposed upon the privilege of using cigarettes in this State at
13a rate of 12.5 mills per cigarette so used. The taxes herein
14imposed shall be in addition to all other occupation or
15privilege taxes imposed by the State of Illinois or by any
16political subdivision thereof or by any municipal corporation.
17    When any tax imposed herein terminates or has terminated,
18distributors who have bought stamps while such tax was in
19effect and who therefore paid such tax, but who can show, to
20the Department's satisfaction, that they sold the cigarettes to
21which they affixed such stamps after such tax had terminated
22and did not recover the tax or its equivalent from purchasers,
23shall be allowed by the Department to take credit for such
24absorbed tax against subsequent tax stamp purchases from the
25Department by such distributors.
26    When the word "tax" is used in this Act, it shall include

 

 

SB0006- 23 -LRB097 06649 HLH 46735 b

1any tax or tax rate imposed by this Act and shall mean the
2singular of "tax" or the plural "taxes" as the context may
3require.
4    Any distributor having cigarettes to which stamps have been
5affixed in his possession for sale on the effective date of
6this amendatory Act of 1989 shall not be required to pay the
7additional tax imposed by this amendatory Act of 1989 on such
8stamped cigarettes. Any distributor having cigarettes to which
9stamps have been affixed in his or her possession for sale at
1012:01 a.m. on the effective date of this amendatory Act of
111993, is required to pay the additional tax imposed by this
12amendatory Act of 1993 on such stamped cigarettes. This payment
13shall be due when the distributor first makes a purchase of
14cigarette tax stamps after the effective date of this
15amendatory Act of 1993, or on the first due date of a return
16under this Act after the effective date of this amendatory Act
17of 1993, whichever occurs first. Once a distributor tenders
18payment of the additional tax to the Department, the
19distributor may purchase stamps from the Department. Any
20distributor having cigarettes to which stamps have been affixed
21in his possession for sale on December 15, 1997 shall not be
22required to pay the additional tax imposed by this amendatory
23Act of 1997 on such stamped cigarettes.
24    Any distributor having cigarettes to which stamps have been
25affixed in his or her possession for sale on July 1, 2002 shall
26not be required to pay the additional tax imposed by this

 

 

SB0006- 24 -LRB097 06649 HLH 46735 b

1amendatory Act of the 92nd General Assembly on those stamped
2cigarettes. Any retailer having cigarettes in his or her
3possession on March 1, 2011 to which tax stamps have been
4affixed is not required to pay the additional tax that begins
5on March 1, 2011 imposed by this amendatory Act of the 97th
6General Assembly on those stamped cigarettes. Any distributor
7having cigarettes in his or her possession on March 1, 2011 to
8which tax stamps have been affixed is required to pay the
9additional tax that begins on March 1, 2011 imposed by this
10amendatory Act of the 97th General Assembly to the extent the
11calendar year 2011 average monthly volume of cigarette stamps
12in the distributor's possession exceeds the average monthly
13volume of cigarette stamps purchased by the distributor in
14calendar year 2010. This payment, less the discount provided in
15Section 3, is due when the distributor first makes a purchase
16of cigarette stamps on or after March 1, 2011 or on the first
17due date of a return under this Act occurring on or after March
181, 2011, whichever occurs first. Any retailer having cigarettes
19in his or her possession on March 1, 2012 to which tax stamps
20have been affixed is not required to pay the additional tax
21that begins on March 1, 2012 imposed by this amendatory Act of
22the 97th General Assembly on those stamped cigarettes. Any
23distributor having cigarettes in his or her possession on March
241, 2012 to which tax stamps have been affixed is required to
25pay the additional tax that begins on March 1, 2012 imposed by
26this amendatory Act of the 97th General Assembly to the extent

 

 

SB0006- 25 -LRB097 06649 HLH 46735 b

1the calendar year 2012 average monthly volume of cigarette
2stamps in the distributor's possession exceeds the average
3monthly volume of cigarette stamps purchased by the distributor
4in calendar year 2011. This payment, less the discount provided
5in Section 3, is due when the distributor first makes a
6purchase of cigarette stamps on or after March 1, 2012 or on
7the first due date of a return under this Act occurring on or
8after March 1, 2012, whichever occurs first.
9(Source: P.A. 92-536, eff. 6-6-02.)
 
10    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
11    Sec. 3. Stamp payment. The tax hereby imposed shall be
12collected by a distributor maintaining a place of business in
13this State or a distributor authorized by the Department
14pursuant to Section 7 hereof to collect the tax, and the amount
15of the tax shall be added to the price of the cigarettes sold
16by such distributor. Collection of the tax shall be evidenced
17by a stamp or stamps affixed to each original package of
18cigarettes or by an authorized substitute for such stamp
19imprinted on each original package of such cigarettes
20underneath the sealed transparent outside wrapper of such
21original package, except as hereinafter provided. Each
22distributor who is required or authorized to collect the tax
23herein imposed, before delivering or causing to be delivered
24any original packages of cigarettes in this State to any
25purchaser, shall firmly affix a proper stamp or stamps to each

 

 

SB0006- 26 -LRB097 06649 HLH 46735 b

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

 

 

SB0006- 27 -LRB097 06649 HLH 46735 b

1notice has been removed, mutilated, obliterated, or altered in
2any manner.
3    Only distributors licensed under this Act and
4transporters, as defined in Section 9c of the Cigarette Tax
5Act, may possess unstamped original packages of cigarettes.
6Prior to shipment to an Illinois retailer or secondary
7distributor, a stamp shall be applied to each original package
8of cigarettes sold to the retailer or secondary distributor. A
9distributor may apply a tax stamp only to an original package
10of cigarettes purchased or obtained directly from an in-state
11maker, manufacturer, or fabricator licensed as a distributor
12under Section 4 of this Act or an out-of-state maker,
13manufacturer, or fabricator holding a permit under Section 7 of
14this Act. A licensed distributor may ship or otherwise cause to
15be delivered unstamped original packages of cigarettes in,
16into, or from this State. A licensed distributor may transport
17unstamped original packages of cigarettes to a facility,
18wherever located, owned or controlled by such distributor;
19however, a distributor may not transport unstamped original
20packages of cigarettes to a facility where retail sales of
21cigarettes take place or to a facility where a secondary
22distributor makes sales for resale. Any licensed distributor
23that ships or otherwise causes to be delivered unstamped
24original packages of cigarettes into, within, or from this
25State shall ensure that the invoice or equivalent documentation
26and the bill of lading or freight bill for the shipment

 

 

SB0006- 28 -LRB097 06649 HLH 46735 b

1identifies the true name and address of the consignor or
2seller, the true name and address of the consignee or
3purchaser, and the quantity by brand style of the cigarettes so
4transported, provided that this Section shall not be construed
5as to impose any requirement or liability upon any common or
6contract carrier.
7    Distributors making sales of cigarettes to secondary
8distributors shall add the amount of the tax to the price of
9the cigarettes sold by the distributors. Secondary
10distributors making sales of cigarettes to retailers shall
11include the amount of the tax in the price of the cigarettes
12sold to retailers. The amount of tax shall not be less than the
13amount of taxes imposed by the State and all local
14jurisdictions. The amount of local taxes shall be calculated
15based on the location of the retailer's place of business shown
16on the retailer's certificate of registration or
17sub-registration issued to the retailer pursuant to Section 2a
18of the Retailers' Occupation Tax Act. The original packages of
19cigarettes sold by the retailer shall bear all the required
20stamps, or other indicia, for the taxes included in the price
21of cigarettes.
22    Stamps, when required hereunder, shall be purchased from
23the Department, or any person authorized by the Department, by
24distributors. On and after July 1, 2003, payment for such
25stamps must be made by means of electronic funds transfer. The
26Department may refuse to sell stamps to any person who does not

 

 

SB0006- 29 -LRB097 06649 HLH 46735 b

1comply with the provisions of this Act. Beginning on June 6,
22002 and through June 30, 2002, persons holding valid licenses
3as distributors may purchase cigarette tax stamps up to an
4amount equal to 115% of the distributor's average monthly
5cigarette tax stamp purchases over the 12 calendar months prior
6to June 6, 2002.
7    Prior to December 1, 1985, the Department shall allow a
8distributor 21 days in which to make final payment of the
9amount to be paid for such stamps, by allowing the distributor
10to make payment for the stamps at the time of purchasing them
11with a draft which shall be in such form as the Department
12prescribes, and which shall be payable within 21 days
13thereafter: Provided that such distributor has filed with the
14Department, and has received the Department's approval of, a
15bond, which is in addition to the bond required under Section 4
16of this Act, payable to the Department in an amount equal to
1780% of such distributor's average monthly tax liability to the
18Department under this Act during the preceding calendar year or
19$500,000, whichever is less. The bond shall be joint and
20several and shall be in the form of a surety company bond in
21such form as the Department prescribes, or it may be in the
22form of a bank certificate of deposit or bank letter of credit.
23The bond shall be conditioned upon the distributor's payment of
24the amount of any 21-day draft which the Department accepts
25from that distributor for the delivery of stamps to that
26distributor under this Act. The distributor's failure to pay

 

 

SB0006- 30 -LRB097 06649 HLH 46735 b

1any such draft, when due, shall also make such distributor
2automatically liable to the Department for a penalty equal to
325% of the amount of such draft.
4    On and after December 1, 1985 and until July 1, 2003, the
5Department shall allow a distributor 30 days in which to make
6final payment of the amount to be paid for such stamps, by
7allowing the distributor to make payment for the stamps at the
8time of purchasing them with a draft which shall be in such
9form as the Department prescribes, and which shall be payable
10within 30 days thereafter, and beginning on January 1, 2003 and
11thereafter, the draft shall be payable by means of electronic
12funds transfer: Provided that such distributor has filed with
13the Department, and has received the Department's approval of,
14a bond, which is in addition to the bond required under Section
154 of this Act, payable to the Department in an amount equal to
16150% of such distributor's average monthly tax liability to the
17Department under this Act during the preceding calendar year or
18$750,000, whichever is less, except that as to bonds filed on
19or after January 1, 1987, such additional bond shall be in an
20amount equal to 100% of such distributor's average monthly tax
21liability under this Act during the preceding calendar year or
22$750,000, whichever is less. The bond shall be joint and
23several and shall be in the form of a surety company bond in
24such form as the Department prescribes, or it may be in the
25form of a bank certificate of deposit or bank letter of credit.
26The bond shall be conditioned upon the distributor's payment of

 

 

SB0006- 31 -LRB097 06649 HLH 46735 b

1the amount of any 30-day draft which the Department accepts
2from that distributor for the delivery of stamps to that
3distributor under this Act. The distributor's failure to pay
4any such draft, when due, shall also make such distributor
5automatically liable to the Department for a penalty equal to
625% of the amount of such draft.
7    Beginning on the effective date of this amendatory Act of
8the 97th General Assembly, the Department shall allow a
9distributor 10 days in which to make final payment of the
10amount to be paid for such stamps, by allowing the distributor
11to make payment for the stamps at the time of purchasing them
12with a draft, which shall be payable by means of electronic
13funds transfer and in such form as the Department prescribes,
14and which shall be payable within 10 days thereafter, provided
15that such distributor has filed with the Department, and has
16received the Department's approval of, a bond, which is in
17addition to the bond required under Section 4 of this Act,
18payable to the Department in an amount equal to 100% of that
19distributor's average monthly tax liability to the Department
20under this Act during the preceding calendar year or $750,000,
21whichever is less. The bond shall be joint and several and
22shall be in the form of a surety company bond in such form as
23the Department prescribes, or it may be in the form of a bank
24certificate of deposit or bank letter of credit. The bond shall
25be conditioned upon the distributor's payment of the amount of
26any 10-day draft which the Department accepts from that

 

 

SB0006- 32 -LRB097 06649 HLH 46735 b

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

 

 

SB0006- 33 -LRB097 06649 HLH 46735 b

1continuance compliance taxpayer. Any taxpayer who fails to pay
2an admitted or established liability under this Act may also be
3required to post bond or other acceptable security with the
4Department guaranteeing the payment of such admitted or
5established liability.
6    Any person aggrieved by any decision of the Department
7under this Section may, within the time allowed by law, protest
8and request a hearing, whereupon the Department shall give
9notice and shall hold a hearing in conformity with the
10provisions of this Act and then issue its final administrative
11decision in the matter to such person. In the absence of such a
12protest filed within the time allowed by law, the Department's
13decision shall become final without any further determination
14being made or notice given.
15    The Department shall discharge any surety and shall release
16and return any bond or security deposited, assigned, pledged,
17or otherwise provided to it by a taxpayer under this Section
18within 30 days after:
19        (1) such Taxpayer becomes a prior continuous
20    compliance taxpayer; or
21        (2) such taxpayer has ceased to collect receipts on
22    which he is required to remit tax to the Department, has
23    filed a final tax return, and has paid to the Department an
24    amount sufficient to discharge his remaining tax liability
25    as determined by the Department under this Act. The
26    Department shall make a final determination of the

 

 

SB0006- 34 -LRB097 06649 HLH 46735 b

1    taxpayer's outstanding tax liability as expeditiously as
2    possible after his final tax return has been filed. If the
3    Department cannot make such final determination within 45
4    days after receiving the final tax return, within such
5    period it shall so notify the taxpayer, stating its reasons
6    therefor.
7    At the time of purchasing such stamps from the Department
8when purchase is required by this Act, or at the time when the
9tax which he has collected is remitted by a distributor to the
10Department without the purchase of stamps from the Department
11when that method of remitting the tax that has been collected
12is required or authorized by this Act, the distributor shall be
13allowed a discount during any year commencing July 1 and ending
14the following June 30 in accordance with the schedule set out
15hereinbelow, from the amount to be paid by him to the
16Department for such stamps, or to be paid by him to the
17Department on the basis of monthly remittances (as the case may
18be), to cover the cost, to such distributor, of collecting the
19tax herein imposed by affixing such stamps to the original
20packages of cigarettes sold by such distributor or by placing
21tax imprints underneath the sealed transparent wrapper of
22original packages of cigarettes sold by such distributor (as
23the case may be): (1) Prior to December 1, 1985, a discount
24equal to 1-2/3% of the amount of the tax up to and including
25the first $700,000 paid hereunder by such distributor to the
26Department during any such year; 1-1/3% of the next $700,000 of

 

 

SB0006- 35 -LRB097 06649 HLH 46735 b

1tax or any part thereof, paid hereunder by such distributor to
2the Department during any such year; 1% of the next $700,000 of
3tax, or any part thereof, paid hereunder by such distributor to
4the Department during any such year; and 2/3 of 1% of the
5amount of any additional tax paid hereunder by such distributor
6to the Department during any such year or (2) On and after
7December 1, 1985, a discount equal to 1.75% of the amount of
8the tax payable under this Act up to and including the first
9$3,000,000 paid hereunder by such distributor to the Department
10during any such year and 1.5% of the amount of any additional
11tax paid hereunder by such distributor to the Department during
12any such year.
13    Two or more distributors that use a common means of
14affixing revenue tax stamps or that are owned or controlled by
15the same interests shall be treated as a single distributor for
16the purpose of computing the discount.
17    Cigarette manufacturers who are distributors under Section
187(a) of this Act, and who place their cigarettes in original
19packages which are contained inside a sealed transparent
20wrapper, shall be required to remit the tax which they are
21required to collect under this Act to the Department by
22remitting the amount thereof to the Department by the 5th day
23of each month, covering cigarettes shipped or otherwise
24delivered to points in Illinois to purchasers during the
25preceding calendar month, but a distributor need not remit to
26the Department the tax so collected by him from purchasers

 

 

SB0006- 36 -LRB097 06649 HLH 46735 b

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

 

 

SB0006- 37 -LRB097 06649 HLH 46735 b

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

 

 

SB0006- 38 -LRB097 06649 HLH 46735 b

1that made or sold the cigarettes has failed to become a
2participating manufacturer, as defined in subdivision (a)(1)
3of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
4or has failed to create a qualified escrow fund for any
5cigarettes manufactured by the tobacco product manufacturer
6and sold in this State or otherwise failed to bring itself into
7compliance with subdivision (a)(2) of Section 15 of the Tobacco
8Product Manufacturers' Escrow Act.
9(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
10    (35 ILCS 135/12)  (from Ch. 120, par. 453.42)
11    Sec. 12. Declaration of possession of cigarettes on which
12tax not paid.
13    (a) When cigarettes are acquired for use in this State by a
14person (including a distributor as well as any other person),
15who did not pay the tax herein imposed to a distributor, the
16person, within 30 days after acquiring the cigarettes, shall
17file with the Department a return declaring the possession of
18the cigarettes and shall transmit with the return to the
19Department the tax imposed by this Act.
20    (b) On receipt of the return and payment of the tax as
21required by paragraph (a), the Department may furnish the
22person with a suitable tax stamp to be affixed to the package
23of cigarettes upon which the tax has been paid if the
24Department determines that the cigarettes still exist.
25    (c) The return referred to in paragraph (a) shall contain

 

 

SB0006- 39 -LRB097 06649 HLH 46735 b

1the name and address of the person possessing the cigarettes
2involved, the location of the cigarettes and the quantity,
3brand name, place, and date of the acquisition of the
4cigarettes.
5    (d) Nothing in this Section shall permit a secondary
6distributor to purchase unstamped original packages of
7cigarettes or to purchase original packages of cigarettes from
8a person other than a licensed distributor.
9    (e) The provisions of this Section are not subject to the
10Uniform Penalty and Interest Act.
11(Source: P.A. 96-1027, eff. 7-12-10.)
 
12    Section 20. The Tobacco Products Tax Act of 1995 is amended
13by changing Sections 10-5, 10-10, and 10-30 as follows:
 
14    (35 ILCS 143/10-5)
15    Sec. 10-5. Definitions. For purposes of this Act:
16    "Business" means any trade, occupation, activity, or
17enterprise engaged in, at any location whatsoever, for the
18purpose of selling tobacco products.
19    "Cigarette" has the meaning ascribed to the term in Section
201 of the Cigarette Tax Act.
21    "Correctional Industries program" means a program run by a
22State penal institution in which residents of the penal
23institution produce tobacco products for sale to persons
24incarcerated in penal institutions or resident patients of a

 

 

SB0006- 40 -LRB097 06649 HLH 46735 b

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

 

 

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1resident patients of a State operated mental health facility.
2    "Manufacturer" means any person, wherever resident or
3located, who manufactures and sells tobacco products, except a
4person who makes, manufactures, or fabricates tobacco products
5as a part of a Correctional Industries program for sale to
6persons incarcerated in penal institutions or resident
7patients of a State operated mental health facility.
8    "Moist snuff" means any finely cut, ground, or powdered
9tobacco that is not intended to be smoked, but shall not
10include any finely cut, ground, or powdered tobacco that is
11intended to be placed in the nasal cavity.
12    "Person" means any natural individual, firm, partnership,
13association, joint stock company, joint venture, limited
14liability company, or public or private corporation, however
15formed, or a receiver, executor, administrator, trustee,
16conservator, or other representative appointed by order of any
17court.
18    "Place of business" means and includes any place where
19tobacco products are sold or where tobacco products are
20manufactured, stored, or kept for the purpose of sale or
21consumption, including any vessel, vehicle, airplane, train,
22or vending machine.
23    "Retailer" means any person in this State engaged in the
24business of selling tobacco products to consumers in this
25State, regardless of quantity or number of sales.
26    "Sale" means any transfer, exchange, or barter in any

 

 

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1manner or by any means whatsoever for a consideration and
2includes all sales made by persons.
3    "Tobacco products" means any cigars; cheroots; stogies;
4periques; granulated, plug cut, crimp cut, ready rubbed, and
5other smoking tobacco; snuff (including moist snuff) or snuff
6flour; cavendish; plug and twist tobacco; fine-cut and other
7chewing tobaccos; shorts; refuse scraps, clippings, cuttings,
8and sweeping of tobacco; and other kinds and forms of tobacco,
9prepared in such manner as to be suitable for chewing or
10smoking in a pipe or otherwise, or both for chewing and
11smoking; but does not include cigarettes or tobacco purchased
12for the manufacture of cigarettes by cigarette distributors and
13manufacturers defined in the Cigarette Tax Act and persons who
14make, manufacture, or fabricate cigarettes as a part of a
15Correctional Industries program for sale to residents
16incarcerated in penal institutions or resident patients of a
17State operated mental health facility.
18    "Wholesale price" means the established list price for
19which a manufacturer sells tobacco products to a distributor,
20before the allowance of any discount, trade allowance, rebate,
21or other reduction. In the absence of such an established list
22price, the manufacturer's invoice price at which the
23manufacturer sells the tobacco product to unaffiliated
24distributors, before any discounts, trade allowances, rebates,
25or other reductions, shall be presumed to be the wholesale
26price.

 

 

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1    "Wholesaler" means any person, wherever resident or
2located, engaged in the business of selling tobacco products to
3others for the purpose of resale.
4(Source: P.A. 92-231, eff. 8-2-01.)
 
5    (35 ILCS 143/10-10)
6    Sec. 10-10. Tax imposed. On the first day of the third
7month after the month in which this Act becomes law and until
8March 1, 2011, a tax is imposed on any person engaged in
9business as a distributor of tobacco products, as defined in
10Section 10-5, at the rate of 18% of the wholesale price of
11tobacco products sold or otherwise disposed of to retailers or
12consumers located in this State. Beginning on March 1, 2011, a
13tax is imposed on any person engaged in business as a
14distributor of tobacco products, as defined in Section 10-5, at
15the rate of (i) 18% of the wholesale price of tobacco products,
16other than moist snuff, sold or otherwise disposed of to
17retailers or consumers located in this State and (ii) $0.20 per
18ounce of moist snuff, and a proportionate tax at the like rate
19on all fractional parts of an ounce, sold or otherwise disposed
20of to retailers or consumers located in this State. The tax is
21in addition to all other occupation or privilege taxes imposed
22by the State of Illinois, by any political subdivision thereof,
23or by any municipal corporation. However, the tax is not
24imposed upon any activity in that business in interstate
25commerce or otherwise, to the extent to which that activity may

 

 

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1not, under the Constitution and Statutes of the United States,
2be made the subject of taxation by this State. The tax is also
3not imposed on sales made to the United States or any entity
4thereof.
5    Beginning on March 1, 2011, the tax rate imposed per ounce
6of moist snuff may not exceed 11% of the tax imposed upon a
7package of 20 cigarettes pursuant to the Cigarette Tax Act.
8    All moneys received by the Department under this Act shall
9be paid into the Long-Term Care Provider Fund of the State
10Treasury.
11(Source: P.A. 92-231, eff. 8-2-01.)
 
12    (35 ILCS 143/10-30)
13    Sec. 10-30. Returns. Every distributor shall, on or before
14the 15th day of each month, file a return with the Department
15covering the preceding calendar month. The return shall
16disclose the wholesale price for all tobacco products and the
17quantity of moist snuff sold or otherwise disposed of and other
18information that the Department may reasonably require. The
19return shall be filed upon a form prescribed and furnished by
20the Department.
21    At the time when any return of any distributor is due to be
22filed with the Department, the distributor shall also remit to
23the Department the tax liability that the distributor has
24incurred for transactions occurring in the preceding calendar
25month.

 

 

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1(Source: P.A. 89-21, eff. 6-6-95.)
 
2    Section 99. Effective date. This Act takes effect upon
3becoming law.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3    30 ILCS 105/5.786 new
4    30 ILCS 105/6z-87 new
5    35 ILCS 130/2from Ch. 120, par. 453.2
6    35 ILCS 130/3from Ch. 120, par. 453.3
7    35 ILCS 135/2from Ch. 120, par. 453.32
8    35 ILCS 135/3from Ch. 120, par. 453.33
9    35 ILCS 135/12from Ch. 120, par. 453.42
10    35 ILCS 143/10-5
11    35 ILCS 143/10-10
12    35 ILCS 143/10-30