Full Text of SB2026 95th General Assembly
SB2026 95TH GENERAL ASSEMBLY
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95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008 SB2026
Introduced 2/7/2008, by Sen. Terry Link SYNOPSIS AS INTRODUCED: |
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Amends the Cigarette Tax Act. Requires tax stamps on cigarettes to indicate whether tax on those cigarettes was paid. Sets forth requirements for the handling of unstamped cigarettes. Sets forth fines and penalties under the Act. Limits the number of cartons of cigarettes that a retailer may sell in a single transaction. Sets forth requirements concerning applications for licensure under the Act. Sets forth requirements on distributors with respect to the Department of Revenue. Requires sub-certificates of registration for retailers and sets forth requirements and procedures for granting, revoking, cancelling, or suspending a sub-certificate. Requires the Department to maintain a list of all suspended, cancelled, and revoked licenses, permits, or sub-certificates under the Act. Requires the Department to assign unique stamp and meter impression numbers to distributors and out-of-state manufacturers. Requires retailers to maintain certain records. Sets forth procedures for the forfeiture and destruction of contraband cigarettes. Repeals Sections concerning transporters and the cessation of business by distributors. Amends the Prevention of Cigarette Sales to Minors Act. Sets forth various requirements with respect to shipping, registration, and reporting to prevent delivery sales to minors. Requires certain standards for delivery sales. Requires the Department to establish a tip line for reporting violations of the Act. Makes other changes. Effective immediately.
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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY | |
FISCAL NOTE ACT MAY APPLY |
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A BILL FOR
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SB2026 |
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| AN ACT concerning Illinois cigarette sales.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Cigarette Tax Act is amended by changing | 5 |
| Sections 1, 3, 3-10, 4, 11, 20, and 21 and by adding Sections | 6 |
| 3-15, 3-20, 4c, 4d, 4e, 4f, 4g, 6a, and 11a as follows:
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| (35 ILCS 130/1) (from Ch. 120, par. 453.1)
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| Sec. 1. For the purposes of this Act:
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| "Brand Style" means a variety of cigarettes distinguished | 10 |
| by the tobacco used, tar and nicotine content, flavoring used, | 11 |
| size of the cigarette, filtration on the cigarette or | 12 |
| packaging. "Cigarette", means any when used in this Act, shall | 13 |
| be construed to mean: Any
roll for smoking made wholly or in | 14 |
| part of tobacco irrespective of size
or shape and whether or | 15 |
| not such tobacco is flavored, adulterated or
mixed with any | 16 |
| other ingredient, and the wrapper or cover of which is
made of | 17 |
| paper or any other substance or material except tobacco.
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| "Contraband cigarettes" means: | 19 |
| (a) cigarettes that do not bear a required tax stamp | 20 |
| under this Act; | 21 |
| (b) cigarettes for which any required federal taxes | 22 |
| have not been paid; | 23 |
| (c) cigarettes that bear a counterfeit tax stamp; |
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| (d) cigarettes that are manufactured, fabricated, | 2 |
| assembled, processed, packaged, or labeled by any person | 3 |
| other than (i) the owner of the trademark rights in the | 4 |
| cigarette brand or (ii) a person that is directly or | 5 |
| indirectly authorized by such owner; or | 6 |
| (e) cigarettes imported into the United States, or | 7 |
| otherwise distributed, in violation of the federal | 8 |
| Imported Cigarette Compliance Act of 2000 (Title IV of | 9 |
| Public Law 106-476). | 10 |
| "Person" means any natural individual, firm, partnership, | 11 |
| association, joint
stock company, joint adventure, public or | 12 |
| private corporation, however formed,
limited liability | 13 |
| company, or a receiver, executor, administrator, trustee,
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| guardian or other representative appointed by order of any | 15 |
| court.
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| "Prior Continuous Compliance Taxpayer" means any person | 17 |
| who is licensed
under this Act and who, having been a licensee | 18 |
| for a continuous period of 5
years, is determined by the | 19 |
| Department not to have been either delinquent
or deficient in | 20 |
| the payment of tax liability during that period or
otherwise in | 21 |
| violation of this Act. Also, any taxpayer who has, as
verified | 22 |
| by the Department, continuously complied with the condition of | 23 |
| his
bond or other security under provisions of this Act for a | 24 |
| period of 5
consecutive years shall be considered to be a | 25 |
| "Prior continuous compliance
taxpayer". In calculating the | 26 |
| consecutive period of time described herein
for qualification |
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| as a "prior continuous compliance taxpayer", a
consecutive | 2 |
| period of time of qualifying compliance immediately prior to
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| the effective date of this amendatory Act of 1987 shall be | 4 |
| credited to any
licensee who became licensed on or before the | 5 |
| effective date of this
amendatory Act of 1987.
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| "Department" means the Department of Revenue.
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| "Sale" means any transfer, exchange or barter in any manner | 8 |
| or by any
means whatsoever for a consideration, and includes | 9 |
| and means all sales
made by any person.
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| "Original Package" means the individual packet, box or | 11 |
| other container
whatsoever used to contain and to convey | 12 |
| cigarettes to the consumer.
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| "Distributor" means any and each of the following:
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| (1) Any person engaged in the business of selling | 15 |
| cigarettes in this
State who brings or causes to be brought | 16 |
| into this State from without
this State any original packages | 17 |
| of cigarettes, on which original
packages there is no | 18 |
| authorized evidence underneath a sealed transparent
wrapper | 19 |
| showing that the tax liability imposed by this Act has been | 20 |
| paid
or assumed by the out-of-State seller of such cigarettes, | 21 |
| for sale or
other disposition in the course of such business.
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| (2) Any person who makes, manufactures or fabricates | 23 |
| cigarettes in this
State for sale in this State, except a | 24 |
| person who makes, manufactures
or fabricates cigarettes as a | 25 |
| part of a correctional industries program
for sale to residents | 26 |
| incarcerated in penal institutions or resident patients
of a |
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| State-operated mental health facility.
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| (3) Any person who makes, manufactures or fabricates | 3 |
| cigarettes
outside this State, which cigarettes are placed in | 4 |
| original packages
contained in sealed transparent wrappers, | 5 |
| for delivery or shipment into
this State, and who elects to | 6 |
| qualify and is accepted by the Department
as a distributor | 7 |
| under Section 4b of this Act.
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| "Place of business" shall mean and include any place where | 9 |
| cigarettes
are sold or where cigarettes are manufactured, | 10 |
| stored or kept for the
purpose of sale or consumption, | 11 |
| including any vessel, vehicle, airplane,
train or vending | 12 |
| machine.
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| "Business" means any trade, occupation, activity or | 14 |
| enterprise
engaged in for the purpose of selling cigarettes in | 15 |
| this State.
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| "Retailer" means any person who engages in the making of | 17 |
| transfers of
the ownership of, or title to, cigarettes to a | 18 |
| purchaser for use or
consumption and not for resale in any | 19 |
| form, for a valuable consideration. "Retailer" does not include | 20 |
| a person:
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| (1) who transfers to residents incarcerated in penal | 22 |
| institutions
or resident patients of a State-operated | 23 |
| mental health facility ownership
of cigarettes made, | 24 |
| manufactured, or fabricated as part of a correctional
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| industries program; or | 26 |
| (2) who transfers cigarettes to a not-for-profit |
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| research institution that conducts tests concerning the | 2 |
| health effects of tobacco products and who does not offer | 3 |
| the cigarettes for resale.
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| "Retailer" shall be construed to include any person who | 5 |
| engages in
the making of transfers of the ownership of, or | 6 |
| title to, cigarettes to
a purchaser, for use or consumption by | 7 |
| any other person to whom such
purchaser may transfer the | 8 |
| cigarettes without a valuable consideration,
except a person | 9 |
| who transfers to residents incarcerated in penal institutions
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| or resident patients of a State-operated mental health facility | 11 |
| ownership
of cigarettes made, manufactured or fabricated as | 12 |
| part of a correctional
industries program.
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| "Stamp" or "stamps" mean the indicia required to be placed | 14 |
| on a pack of cigarettes that evidence payment of the tax on | 15 |
| cigarettes under Section 2 of this Act (35 ILCS 130/2), or the | 16 |
| indicia used to indicate that the cigarettes are intended for a | 17 |
| sale or distribution within this State that is exempt from | 18 |
| State tax under any applicable provision of law. | 19 |
| "Within this State" means within the exterior limits of the | 20 |
| State of Illinois and includes all territory within these | 21 |
| limits owned by or ceded to the United States of America. | 22 |
| "Related party" means any person that is associated with | 23 |
| any other person because he or she: | 24 |
| (a) is an officer or director of a business; | 25 |
| (b) is legally recognized as a partner in business; or | 26 |
| (c) is directly or indirectly controlled by another. |
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| (Source: P.A. 95-462, eff. 8-27-07.)
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| (35 ILCS 130/3) (from Ch. 120, par. 453.3)
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| Sec. 3. Affixing tax stamp; remitting tax to the | 4 |
| Department. Payment of
the taxes imposed by Section 2 of this | 5 |
| Act shall
(except as hereinafter provided) be evidenced by | 6 |
| revenue tax stamps affixed
to each original package of | 7 |
| cigarettes. Each distributor of cigarettes,
before delivering | 8 |
| or causing to be delivered any original package of
cigarettes | 9 |
| in this State to a purchaser, shall firmly affix a proper stamp
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| or stamps to each such package, or (in case of manufacturers of | 11 |
| cigarettes
in original packages which are contained inside a | 12 |
| sealed transparent
wrapper) shall imprint the required | 13 |
| language on the original package of
cigarettes beneath such | 14 |
| outside wrapper, as hereinafter provided. Any stamp required by | 15 |
| this Act shall note whether the State tax under Section 2 of | 16 |
| this Act (35 ILCS 130/2) was paid or whether the pack of | 17 |
| cigarettes was not subject to such tax.
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| No stamp or imprint may be affixed to, or made upon, any | 19 |
| package of
cigarettes unless that package complies with all | 20 |
| requirements of the federal
Cigarette Labeling and Advertising | 21 |
| Act, 15 U.S.C. 1331 and following, for the
placement of labels, | 22 |
| warnings, or any other information upon a package of
cigarettes | 23 |
| that is sold within the United States. Under the authority of
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| Section 6, the Department shall revoke the license of any | 25 |
| distributor that is
determined to have violated this paragraph.
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| A person may not affix a stamp on a package of cigarettes, | 2 |
| cigarette papers,
wrappers, or tubes if that individual package | 3 |
| has been marked for export
outside the United States with a | 4 |
| label or notice in compliance with Section
290.185 of Title 27 | 5 |
| of the Code of Federal Regulations. It is not a defense to
a | 6 |
| proceeding for violation of this paragraph that the label or | 7 |
| notice has been
removed, mutilated, obliterated, or altered in | 8 |
| any manner.
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| Only distributors licensed under this Act or out-of-state | 10 |
| manufacturers holding a permit under this Act may receive | 11 |
| unstamped packs of cigarettes. Prior to shipment to another | 12 |
| person, each licensed distributor or out-of-state manufacturer | 13 |
| holding a permit shall apply a stamp to each pack of cigarettes | 14 |
| imported, distributed, or sold whether or not such cigarettes | 15 |
| are subject to State tax under Section 2 of this Act (35 ILCS | 16 |
| 130/2) or any other provision of State law, provided that a | 17 |
| distributor or out-of-state manufacturer may only apply a tax | 18 |
| stamp to a pack of cigarettes purchased or obtained directly | 19 |
| from a licensed distributor or an out-of-state manufacturing | 20 |
| holding a permit. Only a licensed distributor or an | 21 |
| out-of-state manufacturer holding a permit may ship or | 22 |
| otherwise cause to be delivered unstamped packs of cigarettes | 23 |
| in, into, or from this State, provided that a licensed | 24 |
| distributor or an out-of-state manufacturer holding a permit | 25 |
| may transport unstamped packs of cigarettes to a facility, | 26 |
| wherever located, owned by such distributor or manufacturer. |
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| Any person that ships or otherwise causes to be delivered | 2 |
| unstamped packs of cigarettes into, within, or from this State | 3 |
| shall ensure that the invoice or equivalent documentation and | 4 |
| the bill of lading or freight bill for the shipment identifies | 5 |
| the true name and address of the cosignor or seller, the true | 6 |
| name and address of the cosignee or purchaser, and the quantity | 7 |
| by brand style of the cigarettes so transported, provided that | 8 |
| this Section shall not be construed as to impose any | 9 |
| requirement or liability upon any common or contract carrier. | 10 |
| The Department, or any person authorized by the Department, | 11 |
| shall
sell such stamps only to persons holding valid
licenses | 12 |
| as distributors under this Act. On and after July 1, 2003, | 13 |
| payment
for such stamps must be made by means of
electronic | 14 |
| funds transfer. The Department may refuse to sell stamps to any
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| person who does not comply
with the provisions of this Act.
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| Beginning on the effective date of this amendatory Act of the | 17 |
| 92nd General
Assembly and through June 30, 2002, persons | 18 |
| holding valid licenses as
distributors
may purchase cigarette | 19 |
| tax stamps up to an amount equal to 115% of the
distributor's | 20 |
| average monthly cigarette tax stamp purchases over the 12
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| calendar
months prior to the effective date of this amendatory | 22 |
| Act of the 92nd General
Assembly.
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| Prior to December 1, 1985, the Department shall allow a | 24 |
| distributor
21 days in which to make final
payment of the | 25 |
| amount to be paid for such stamps, by allowing the
distributor | 26 |
| to make payment for the stamps at the time of purchasing them
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| with a draft which shall be in such form as the Department | 2 |
| prescribes, and
which shall be payable within 21 days | 3 |
| thereafter: Provided that such
distributor has filed with the | 4 |
| Department, and has received the
Department's approval of, a | 5 |
| bond, which is in addition to the bond required
under Section 4 | 6 |
| of this Act, payable to the Department in an amount equal
to | 7 |
| 80% of such distributor's average monthly tax liability to
the | 8 |
| Department under this Act during the preceding calendar year or | 9 |
| $500,000,
whichever is less. The Bond shall be joint and
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| several and shall be in the form of a surety company bond in | 11 |
| such form as
the Department prescribes, or it may be in the | 12 |
| form of a bank certificate
of deposit or bank letter of credit. | 13 |
| The bond shall be conditioned upon the
distributor's payment of | 14 |
| amount of any 21-day draft which the Department
accepts from | 15 |
| that distributor for the delivery of stamps to that
distributor | 16 |
| under this Act. The distributor's failure to pay any such
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| draft, when due, shall also make such distributor automatically | 18 |
| liable to
the Department for a penalty equal to 25% of the | 19 |
| amount of such draft.
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| On and after December 1, 1985 and until July 1, 2003, the | 21 |
| Department
shall allow a distributor
30 days in which to make
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| final payment of the amount to be paid for such stamps, by | 23 |
| allowing the
distributor to make payment for the stamps at the | 24 |
| time of purchasing them
with a draft which shall be in such | 25 |
| form as the Department prescribes, and
which shall be payable | 26 |
| within 30 days thereafter, and beginning on January 1,
2003 and |
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| thereafter, the draft shall be payable by means of electronic | 2 |
| funds
transfer: Provided that such
distributor has filed with | 3 |
| the Department, and has received the
Department's approval of, | 4 |
| a bond, which is in addition to the bond required
under Section | 5 |
| 4 of this Act, payable to the Department in an amount equal
to | 6 |
| 150% of such distributor's average monthly tax liability to the
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| Department under this Act during the preceding calendar year or | 8 |
| $750,000,
whichever is less, except that as to bonds filed on | 9 |
| or after January 1,
1987, such additional bond shall be in an | 10 |
| amount equal to 100% of such
distributor's average monthly tax | 11 |
| liability under this Act during the
preceding calendar year or | 12 |
| $750,000, whichever is less. The bond shall be
joint and | 13 |
| several and shall be in the form of a surety company bond in | 14 |
| such
form as the Department prescribes, or it may be in the | 15 |
| form of a bank
certificate of deposit or bank letter of credit.
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| The bond shall be conditioned upon the distributor's payment of | 17 |
| the amount
of any 30-day draft which the Department accepts | 18 |
| from that distributor for
the delivery of stamps to that | 19 |
| distributor under this Act. The
distributor's failure to pay | 20 |
| any such draft, when due, shall also make such
distributor | 21 |
| automatically liable to the Department for a penalty equal to
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| 25% of the amount of such draft.
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| Every prior continuous compliance taxpayer shall be exempt | 24 |
| from all
requirements under this Section concerning the | 25 |
| furnishing of such bond, as
defined in this Section, as a | 26 |
| condition precedent to his being authorized
to engage in the |
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| business licensed under this Act. This exemption shall
continue | 2 |
| for each such taxpayer until such time as he may be determined | 3 |
| by
the Department to be delinquent in the filing of any | 4 |
| returns, or is
determined by the Department (either through the | 5 |
| Department's issuance of a
final assessment which has become | 6 |
| final under the Act, or by the taxpayer's
filing of a return | 7 |
| which admits tax to be due that is not paid) to be
delinquent | 8 |
| or deficient in the paying of any tax under this Act, at which
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| time that taxpayer shall become subject to the bond | 10 |
| requirements of this
Section and, as a condition of being | 11 |
| allowed to continue to engage in the
business licensed under | 12 |
| this Act, shall be required to furnish bond to the
Department | 13 |
| in such form as provided in this Section. Such taxpayer shall
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| furnish such bond for a period of 2 years, after which, if the | 15 |
| taxpayer has
not been delinquent in the filing of any returns, | 16 |
| or delinquent or
deficient in the paying of any tax under this | 17 |
| Act, the Department may
reinstate such person as a prior | 18 |
| continuance compliance taxpayer. Any
taxpayer who fails to pay | 19 |
| an admitted or established liability under this
Act may also be | 20 |
| required to post bond or other acceptable security with the
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| Department guaranteeing the payment of such admitted or | 22 |
| established liability.
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| Any person aggrieved by any decision of the Department | 24 |
| under this
Section may, within the time allowed by law, protest | 25 |
| and request a hearing,
whereupon the Department shall give | 26 |
| notice and shall hold a hearing in
conformity with the |
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| provisions of this Act and then issue its final
administrative | 2 |
| decision in the matter to such person. In the absence of
such a | 3 |
| protest filed within the time allowed by law, the Department's
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| decision shall become final without any further determination | 5 |
| being made or
notice given.
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| The Department shall discharge any surety and shall release | 7 |
| and return
any bond or security deposited, assigned, pledged, | 8 |
| or otherwise provided to
it by a taxpayer under this Section | 9 |
| within 30 days after:
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| (1) Such taxpayer becomes a prior continuous compliance | 11 |
| taxpayer; or
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| (2) Such taxpayer has ceased to collect receipts on which | 13 |
| he is
required to remit tax to the Department, has filed a | 14 |
| final tax return, and
has paid to the Department an amount | 15 |
| sufficient to discharge his remaining
tax liability as | 16 |
| determined by the Department under this Act. The
Department | 17 |
| shall make a final determination of the taxpayer's outstanding
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| tax liability as expeditiously as possible after his final tax | 19 |
| return has
been filed. If the Department cannot make such final | 20 |
| determination within
45 days after receiving the final tax | 21 |
| return, within such period it shall
so notify the taxpayer, | 22 |
| stating its reasons therefor.
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| The Department may authorize distributors to affix revenue | 24 |
| tax stamps by
imprinting tax meter stamps upon original | 25 |
| packages of cigarettes. The
Department shall adopt rules and | 26 |
| regulations relating to the imprinting of
such tax meter stamps |
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| as will result in payment of the proper taxes as
herein | 2 |
| imposed. No distributor may affix revenue tax stamps to | 3 |
| original
packages of cigarettes by imprinting tax meter stamps | 4 |
| thereon unless such
distributor has first obtained permission | 5 |
| from the Department to employ
this method of affixation. The | 6 |
| Department shall regulate the use of tax
meters and may, to | 7 |
| assure the proper collection of the taxes imposed by
this Act, | 8 |
| revoke or suspend the privilege, theretofore granted by the
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| Department to any distributor, to imprint tax meter stamps upon | 10 |
| original
packages of cigarettes.
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| Illinois cigarette manufacturers who place their | 12 |
| cigarettes in original
packages which are contained inside a | 13 |
| sealed transparent wrapper, and
similar out-of-State cigarette | 14 |
| manufacturers who elect to qualify and are
accepted by the | 15 |
| Department as distributors under Section 4b of this Act,
shall | 16 |
| pay the taxes imposed by this Act by remitting the amount | 17 |
| thereof to
the Department by the 5th day of each month covering | 18 |
| cigarettes shipped or
otherwise delivered in Illinois to | 19 |
| purchasers during the preceding calendar
month. Such | 20 |
| manufacturers of cigarettes in original packages which are
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| contained inside a sealed transparent wrapper, before | 22 |
| delivering such
cigarettes or causing such cigarettes to be | 23 |
| delivered in this State to
purchasers, shall evidence their | 24 |
| obligation to remit the taxes due with
respect to such | 25 |
| cigarettes by imprinting language to be prescribed by the
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| Department on each original package of such cigarettes |
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| underneath the
sealed transparent outside wrapper of such | 2 |
| original package, in such place
thereon and in such manner as | 3 |
| the Department may designate. Such imprinted
language shall | 4 |
| acknowledge the manufacturer's payment of or liability for
the | 5 |
| tax imposed by this Act with respect to the distribution of | 6 |
| such
cigarettes.
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| A distributor shall not affix, or cause to be affixed, any | 8 |
| stamp or imprint
to a package of cigarettes, as provided for in | 9 |
| this Section, if the tobacco
product
manufacturer, as defined | 10 |
| in Section 10 of the Tobacco Product Manufacturers'
Escrow
Act, | 11 |
| that made or sold the cigarettes has failed to become a | 12 |
| participating
manufacturer, as defined in subdivision (a)(1) | 13 |
| of Section 15 of the Tobacco
Product
Manufacturers' Escrow Act, | 14 |
| or has failed to create a qualified escrow fund for
any | 15 |
| cigarettes manufactured by the tobacco product manufacturer | 16 |
| and sold in
this State or otherwise failed to bring itself into | 17 |
| compliance with subdivision
(a)(2) of Section 15 of the Tobacco | 18 |
| Product
Manufacturers' Escrow Act.
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| (Source: P.A. 92-322, eff. 1-1-02; 92-536, eff. 6-6-02;
92-737, | 20 |
| eff. 7-25-02; 93-22, eff. 6-20-03.)
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| (35 ILCS 130/3-10)
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| Sec. 3-10. Cigarette enforcement.
| 23 |
| (a) Prohibitions. It is unlawful for any person:
| 24 |
| (1) to sell or distribute in this State; to acquire, | 25 |
| hold, own, possess,
or
transport, for sale or distribution |
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| in this State; or to import, or cause to be
imported into | 2 |
| this State for sale or distribution in this State:
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| (A) any cigarettes the package of which:
| 4 |
| (i) bears any statement, label, stamp, | 5 |
| sticker, or notice
indicating that the | 6 |
| manufacturer did not intend the cigarettes to be
| 7 |
| sold, distributed, or used in the United States, | 8 |
| including but not
limited to labels stating "For | 9 |
| Export Only", "U.S. Tax Exempt",
"For Use Outside | 10 |
| U.S.", or similar wording; or
| 11 |
| (ii) does not comply with:
| 12 |
| (aa) all requirements imposed by or | 13 |
| pursuant to
federal law regarding warnings and | 14 |
| other information on
packages of cigarettes | 15 |
| manufactured, packaged, or imported
for sale, | 16 |
| distribution, or use in the United States, | 17 |
| including
but not limited to the precise | 18 |
| warning labels specified in the
federal | 19 |
| Cigarette Labeling and Advertising Act, 15 | 20 |
| U.S.C.
1333; and
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| (bb) all federal trademark and copyright | 22 |
| laws;
| 23 |
| (B) any cigarettes imported into the United States | 24 |
| in violation of
26 U.S.C. 5754 or any other federal | 25 |
| law, or implementing federal
regulations;
| 26 |
| (C) any cigarettes that such person otherwise |
|
|
|
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LRB095 18691 BDD 44792 b |
|
| 1 |
| knows or has reason
to know the manufacturer did not | 2 |
| intend to be sold, distributed, or used in
the United | 3 |
| States; or
| 4 |
| (D) any cigarettes for which there has not been | 5 |
| submitted to the
Secretary of the U.S. Department of | 6 |
| Health and Human Services the list or
lists of the | 7 |
| ingredients added to tobacco in the manufacture of the
| 8 |
| cigarettes required by the federal Cigarette Labeling | 9 |
| and Advertising Act,
15 U.S.C. 1335a;
| 10 |
| (2) to alter the package of any cigarettes, prior to | 11 |
| sale or distribution
to
the
ultimate consumer, so as to | 12 |
| remove, conceal, or obscure:
| 13 |
| (A) any statement, label, stamp, sticker, or | 14 |
| notice described in
subdivision (a)(1)(A)(i) of this | 15 |
| Section;
| 16 |
| (B) any health warning that is not specified in, or | 17 |
| does not conform
with the requirements of, the federal | 18 |
| Cigarette Labeling and Advertising
Act, 15 U.S.C. | 19 |
| 1333; or
| 20 |
| (3) to affix any stamp required pursuant to this Act to | 21 |
| the package of any
cigarettes described in subdivision | 22 |
| (a)(1) of this Section or altered in
violation of
| 23 |
| subdivision (a)(2) ; or . | 24 |
| (4) to knowingly possess, or possess for sale, | 25 |
| contraband cigarettes.
| 26 |
| (b) Documentation. On the first business day of each month, |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| each person
licensed
to affix the State tax stamp to cigarettes | 2 |
| shall file with the Department, for
all cigarettes
imported | 3 |
| into the United States to which the person has affixed the tax | 4 |
| stamp
in the
preceding month:
| 5 |
| (1) a copy of:
| 6 |
| (A) the permit issued pursuant to the Internal | 7 |
| Revenue Code, 26
U.S.C. 5713, to the person importing | 8 |
| the cigarettes into the United States
allowing the | 9 |
| person to import the cigarettes; and
| 10 |
| (B) the customs form containing, with respect to | 11 |
| the cigarettes, the
internal revenue tax information | 12 |
| required by the U.S. Bureau of Alcohol,
Tobacco and | 13 |
| Firearms;
| 14 |
| (2) a statement, signed by the person under penalty of | 15 |
| perjury, which shall
be treated as confidential by the | 16 |
| Department and exempt from disclosure under
the Freedom of | 17 |
| Information Act, identifying the brand and brand styles of | 18 |
| all such
cigarettes, the quantity of each brand style of | 19 |
| such cigarettes, the supplier of such
cigarettes, and the | 20 |
| person or persons, if any, to whom such cigarettes have | 21 |
| been
conveyed for resale; and a separate statement, signed | 22 |
| by the individual under
penalty of perjury, which shall not | 23 |
| be treated as confidential or exempt from
disclosure, | 24 |
| separately identifying the brands and brand styles of such
| 25 |
| cigarettes;
and
| 26 |
| (3) a statement, signed by an officer of the |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| manufacturer or importer
under penalty of perjury, | 2 |
| certifying that the manufacturer or importer has
complied | 3 |
| with:
| 4 |
| (A) the package health warning and ingredient | 5 |
| reporting
requirements of the federal Cigarette | 6 |
| Labeling and Advertising Act, 15
U.S.C. 1333 and 1335a, | 7 |
| with respect to such cigarettes; and
| 8 |
| (B) the provisions of Exhibit T of the Master | 9 |
| Settlement Agreement
entered in
the case of People of | 10 |
| the State of Illinois v. Philip Morris, et al. (Circuit
| 11 |
| Court of Cook County, No. 96-L13146), including a | 12 |
| statement
indicating whether the manufacturer is, or | 13 |
| is not, a participating tobacco
manufacturer within | 14 |
| the meaning of Exhibit T.
| 15 |
| (c) Administrative sanctions.
| 16 |
| (1) Upon finding that a distributor has committed any | 17 |
| of the acts
prohibited by
subsection
(a), knowing or having | 18 |
| reason to know that he or she has done so, or has failed
to | 19 |
| comply
with any requirement of subsection (b), the | 20 |
| Department
may revoke or suspend the license or licenses of | 21 |
| any
distributor pursuant to the procedures set forth in | 22 |
| Section 6 and impose on the
distributor a civil penalty in | 23 |
| an amount not to exceed the greater of 500% of
the
retail | 24 |
| value of the cigarettes involved or $5,000.
| 25 |
| (2) Cigarettes that are acquired, held, owned, | 26 |
| possessed, transported in,
imported into, or sold or |
|
|
|
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LRB095 18691 BDD 44792 b |
|
| 1 |
| distributed in this State in violation of this
Section | 2 |
| shall be deemed contraband under this Act and are subject | 3 |
| to seizure
and forfeiture as provided in this Act, and all | 4 |
| such cigarettes seized and
forfeited shall be destroyed. | 5 |
| Such cigarettes shall be deemed contraband
whether the | 6 |
| violation of this Section is knowing or otherwise.
| 7 |
| (d) Unfair trade practices. A violation of subsection (a) | 8 |
| or subsection
(b) of this Section shall constitute an unlawful | 9 |
| practice as provided in the
Consumer Fraud and Deceptive | 10 |
| Business Practices Act.
| 11 |
| (e) Unfair cigarette sales. For purposes of the Trademark | 12 |
| Registration and
Protection Act and the Counterfeit Trademark | 13 |
| Act, cigarettes imported or
reimported into the United States | 14 |
| for sale or distribution under any trade
name, trade dress, or | 15 |
| trademark that is the same as, or is confusingly similar
to, | 16 |
| any trade name, trade dress, or trademark used for cigarettes | 17 |
| manufactured
in the United States for sale or distribution in | 18 |
| the United States shall be
presumed to have been purchased | 19 |
| outside of the ordinary channels of trade.
| 20 |
| (f) General provisions.
| 21 |
| (1) This Section shall be enforced by the Department; | 22 |
| provided that, at
the request of the Director of Revenue or | 23 |
| the Director's duly authorized agent,
the State police and | 24 |
| all local police authorities shall enforce the provisions
| 25 |
| of this Section. The Attorney General has concurrent power | 26 |
| with the State's
Attorney of any county to enforce this |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| Section.
| 2 |
| (2) For the purpose of enforcing this Section, the | 3 |
| Director of Revenue and
any agency to which the Director | 4 |
| has delegated enforcement
responsibility pursuant to | 5 |
| subdivision (f)(1) may request information from any
State | 6 |
| or local agency and may share information with and request | 7 |
| information
from any federal agency and any agency of any | 8 |
| other state or any local agency
of any other state.
| 9 |
| (3) In addition to any other remedy provided by law, | 10 |
| including
enforcement as provided in subdivision (a)(1), | 11 |
| any person may bring an action
for appropriate injunctive | 12 |
| or other equitable relief for a violation of this
Section; | 13 |
| actual damages, if any, sustained by reason of the | 14 |
| violation; and, as
determined by the court, interest on the | 15 |
| damages from the date of the
complaint, taxable costs, and | 16 |
| reasonable attorney's fees. If the trier of fact
finds that | 17 |
| the violation is flagrant, it may increase recovery to an | 18 |
| amount not
in excess of 3 times the actual damages | 19 |
| sustained by reason of the violation.
| 20 |
| (g) Definitions. As used in this Section:
| 21 |
| "Importer" means that term as defined in 26 U.S.C. 5702(1).
| 22 |
| "Package" means that term as defined in 15 U.S.C. 1332(4).
| 23 |
| (h) Applicability.
| 24 |
| (1) This Section does not apply to:
| 25 |
| (A) cigarettes allowed to be imported or brought | 26 |
| into the United
States for personal use; and
|
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| (B) cigarettes sold or intended to be sold as | 2 |
| duty-free merchandise
by a duty-free sales enterprise | 3 |
| in accordance with the provisions of 19
U.S.C. 1555(b) | 4 |
| and any implementing regulations; except that this | 5 |
| Section
shall apply to any such cigarettes that are | 6 |
| brought back into the customs
territory for resale | 7 |
| within the customs territory.
| 8 |
| (2) The penalties provided in this Section are in | 9 |
| addition to any other
penalties imposed under other | 10 |
| provision of law.
| 11 |
| (Source: P.A. 91-810, eff. 6-13-00.)
| 12 |
| (35 ILCS 130/3-15 new) | 13 |
| Sec. 3-15. Criminal and civil penalties. | 14 |
| (a) Civil penalties. | 15 |
| (1) Distributors and manufacturers. Except as | 16 |
| otherwise provided in this Section, a first violation of | 17 |
| any provision of this Act by a manufacturer or distributor | 18 |
| shall, in addition to any other penalty provided in this | 19 |
| Act, be punishable by a fine of $5,000 for each separate | 20 |
| violation, which shall be recovered, with costs of suit, in | 21 |
| a civil action. Any subsequent violation of any provision | 22 |
| of this Act by a manufacturer or distributor shall be | 23 |
| punishable by a fine of $10,000 for each separate | 24 |
| violation. In no case shall the fine imposed under this | 25 |
| paragraph exceed 10 times the retail value of the |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| cigarettes. | 2 |
| (2) Retailers. Except as otherwise provided in this | 3 |
| Section, a first violation of any provision of this Act by | 4 |
| a retailer shall, in addition to any other penalty provided | 5 |
| in this Act, be punishable by a fine of $1,000 for each | 6 |
| separate violation, which shall be recovered, with costs of | 7 |
| suit, in a civil action. Any subsequent violation of any | 8 |
| provision of this Act by a retailer shall be punishable by | 9 |
| a fine of $2,000 for each separate violation. In no case | 10 |
| shall the fine imposed under this paragraph exceed 10 times | 11 |
| the retail value of the cigarettes. | 12 |
| (3) Failure to pay tax. Any person that fails to pay | 13 |
| any tax imposed by this State at the time prescribed by law | 14 |
| or regulations shall, in addition to any other penalty | 15 |
| provided in this Act, be liable to a penalty of 3 times the | 16 |
| tax due but unpaid, to help defray the costs of detection | 17 |
| and investigation and any consequential damages. In no case | 18 |
| shall the fine imposed under this paragraph exceed 10 times | 19 |
| the retail value of the cigarettes. | 20 |
| (4) Civil forfeiture. | 21 |
| (A) All cigarettes which are held for sale or | 22 |
| distribution within this State in
violation of the | 23 |
| requirements of this Act shall be forfeited to this | 24 |
| State. All cigarettes forfeited to this State under | 25 |
| this Act shall be destroyed. The Department may, prior | 26 |
| to any destruction of cigarettes, permit the true |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| holder of the trademark rights in the cigarette brand | 2 |
| to inspect such contraband cigarettes, in order to | 3 |
| assist the Department in any investigation regarding | 4 |
| such cigarettes. | 5 |
| (B) Any person that, with intent to defraud the | 6 |
| State: | 7 |
| (i) fails to keep or make any record, return, | 8 |
| report, or inventory required
by this Act; | 9 |
| (ii) keeps or makes any false or fraudulent | 10 |
| record, return, report, or
inventory required by | 11 |
| this Act; | 12 |
| (iii) refuses to pay any tax imposed by this | 13 |
| Act; or | 14 |
| (iv) attempts in any manner to evade or defeat | 15 |
| the requirements of this Act
shall forfeit to the | 16 |
| State all fixtures, equipment, and other materials | 17 |
| with a substantial connection to such conduct. | 18 |
| (C) A distributor or retailer shall not be required | 19 |
| to forfeit fixtures, equipment,
and all other | 20 |
| materials and personal property on the premises if such | 21 |
| distributor or retailer: | 22 |
| (i) acted in good faith; | 23 |
| (ii) was not involved in or aware of the | 24 |
| unlawful activity prohibited by this
Act; and | 25 |
| (iii) did all that reasonably could be | 26 |
| expected under the circumstances to
prevent |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| violations of this Act. | 2 |
| (5) Notwithstanding any other provision of law, the | 3 |
| Department may use proceeds from civil penalties imposed | 4 |
| under this Section to offset necessary and reasonable | 5 |
| expenses incurred in the detection and investigation of the | 6 |
| failure of any person to pay any cigarette tax imposed by | 7 |
| this State. | 8 |
| (b) Criminal penalties. | 9 |
| (1) Fraudulent offenses. Whoever intentionally fails | 10 |
| to comply with any of the requirements of this Act or | 11 |
| regulations prescribed hereunder shall, in addition to any | 12 |
| other penalty provided in this Act, for each such offense, | 13 |
| be guilty of a Class 3 felony. | 14 |
| (2) Knowing offenses. Whoever, knowingly violates any | 15 |
| of the requirements of this Act or regulations prescribed | 16 |
| hereunder shall, in addition to any other penalty provided | 17 |
| in this Act, for each such offense, be guilty of a Class 4 | 18 |
| felony. | 19 |
| (3) Penalties for contraband. Notwithstanding any | 20 |
| other provision of law, the possession for sale of | 21 |
| contraband cigarettes by a manufacturer, distributor, or | 22 |
| retailer shall be punishable as follows: | 23 |
| (A) A person who commits a first knowing violation | 24 |
| shall be guilty of a Class 4 felony. | 25 |
| (B) A person who commits a subsequent knowing | 26 |
| violation shall be guilty of a Class 3 felony and shall |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| have his or her license, permit, or sub-certificate | 2 |
| revoked by the Department. In no case shall the fine | 3 |
| imposed under this paragraph exceed ten times the | 4 |
| retail value of the cigarettes. | 5 |
| (4) For purposes of this Section, the term contraband | 6 |
| cigarettes includes cigarettes that have false | 7 |
| manufacturing labels or packs of cigarettes bearing | 8 |
| counterfeit tax stamps. Any contraband cigarette seized by | 9 |
| this State shall be destroyed. The Department may, prior to | 10 |
| any destruction of cigarettes, permit the true holder of | 11 |
| the trademark rights in the cigarette brand to inspect such | 12 |
| contraband cigarettes, in order to assist the Department in | 13 |
| any investigation regarding such cigarettes. | 14 |
| (5) The penalties provided in paragraph (3) shall not | 15 |
| apply where a licensed distributor is in possession of | 16 |
| contraband cigarettes as a result of such cigarettes being | 17 |
| returned to the distributor by a retailer if such | 18 |
| distributor promptly notified appropriate law enforcement | 19 |
| authorities. | 20 |
| (6) Criminal forfeiture. | 21 |
| (A) Notwithstanding any other provision of law, | 22 |
| the possession for sale of contraband cigarettes by a | 23 |
| manufacturer, distributor, or retailer shall, after | 24 |
| notice and hearing, result in the forfeiture to this | 25 |
| State of the product and related machinery and | 26 |
| equipment used in the production of contraband |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| cigarettes, or to falsely mark cigarettes to reflect | 2 |
| the payment of excise taxes. | 3 |
| (B)The knowing sale or possession for sale of | 4 |
| contraband cigarettes shall, after
notice and hearing, | 5 |
| result in the seizure of all related machinery and | 6 |
| equipment. | 7 |
| (C) All cigarettes forfeited to this State under | 8 |
| this Section shall be destroyed. The
Department may, | 9 |
| prior to any destruction of cigarettes, permit the true | 10 |
| holder of the trademark rights in the cigarette brand | 11 |
| to inspect such contraband cigarettes, in order to | 12 |
| assist the Department in any investigation regarding | 13 |
| such cigarettes. | 14 |
| (35 ILCS 130/3-20 new)
| 15 |
| Sec. 3-20. Limitation on retail sales. A retailer shall not | 16 |
| knowingly sell or distribute more than 10 cartons of cigarettes | 17 |
| to any person in a single transaction or in any series of | 18 |
| transactions within a twenty-four hour period; provided, | 19 |
| however, that a retailer that is licensed as a distributor may | 20 |
| make any sales permitted to be made by a distributor under this | 21 |
| Act when acting in that capacity.
| 22 |
| (35 ILCS 130/4) (from Ch. 120, par. 453.4)
| 23 |
| Sec. 4. Distributor's license. No person may engage in | 24 |
| business as a distributor of cigarettes in this
State within |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| the meaning of the first 2 definitions of distributor in
| 2 |
| Section 1 of this Act without first having obtained a license | 3 |
| therefor from
the Department. Application for license shall be | 4 |
| made to the Department in
form as furnished and prescribed by | 5 |
| the Department. Each applicant for a
license under this Section | 6 |
| shall furnish to the Department on the form
signed and verified | 7 |
| by the applicant under penalty of perjury the following | 8 |
| information:
| 9 |
| (a) If the applicant is an individual, the name and | 10 |
| business address of the applicant; | 11 |
| (b) If the applicant is a firm, partnership, or | 12 |
| association, the name and business address of
each of its | 13 |
| members and any related party; | 14 |
| (c) If the applicant is an individual, the identity of | 15 |
| any license holder in which the individual, directly or | 16 |
| indirectly, owns more than 15 percent of the ownership | 17 |
| interests; | 18 |
| (d) If the applicant is a corporation or limited | 19 |
| liability company, the name and business address of each of | 20 |
| its officers and the name and business address of any | 21 |
| person that owns, directly or indirectly, in the aggregate, | 22 |
| more than 15 percent of the ownership interests in the | 23 |
| corporation or limited liability company and the name and | 24 |
| business address of any license holder in which the | 25 |
| applicant owns more than 15 percent of the ownership | 26 |
| interests; |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| (e) The name under which such applicant regularly does | 2 |
| business; | 3 |
| (f) The physical address of the applicant's principal | 4 |
| place of business and any other place of
business within | 5 |
| this State; | 6 |
| (g) In the case of a distributor who manufacturers or | 7 |
| imports cigarettes, the brand styles of cigarettes the | 8 |
| applicant manufactures or imports; | 9 |
| (h) The kind or nature of the business to be conducted; | 10 |
| (i) Sufficient information to demonstrate that the | 11 |
| applicant has complied or will comply with
all of the | 12 |
| requirements of this Act, including the identity of any | 13 |
| related party; | 14 |
| (j) Whether the applicant has committed any act in the | 15 |
| previous 5 years that would render the
applicant ineligible | 16 |
| for a license or whether the applicant has been convicted | 17 |
| of a crime related to contraband cigarettes, punishable by | 18 |
| imprisonment of one year or more; or
| 19 |
| (a) The name and address of the applicant;
| 20 |
| (b) The address of the location at which the applicant | 21 |
| proposes to
engage in business as a distributor of | 22 |
| cigarettes in this State;
| 23 |
| (k) (c) Such other additional information as the | 24 |
| Department may lawfully
require by its rules and | 25 |
| regulations.
| 26 |
| The annual license fee payable to the Department for each |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| distributor's
license shall be $250. The purpose of such annual | 2 |
| license fee is to defray
the cost, to the Department, of
| 3 |
| serializing cigarette tax stamps. Each applicant for license | 4 |
| shall pay such
fee to the Department at the time of submitting | 5 |
| his application for license
to the Department.
| 6 |
| Every applicant who is required to procure a distributor's | 7 |
| license shall
file with his application a joint and several | 8 |
| bond. Such bond shall be
executed to the Department of Revenue, | 9 |
| with good and sufficient surety or
sureties residing or | 10 |
| licensed to do business within the State of Illinois,
in the | 11 |
| amount of $2,500, conditioned upon the true and faithful | 12 |
| compliance
by the licensee with all of the provisions of this | 13 |
| Act. Such bond, or a
reissue thereof, or a substitute therefor, | 14 |
| shall be kept in effect during
the entire period covered by the | 15 |
| license. A separate application for
license shall be made, a | 16 |
| separate annual license fee paid, and a separate
bond filed, | 17 |
| for each place of business at which a person who is required to
| 18 |
| procure a distributor's license under this Section proposes to | 19 |
| engage in
business as a distributor in Illinois under this Act.
| 20 |
| The following are ineligible to receive a distributor's | 21 |
| license under
this Act:
| 22 |
| (1) a person who is not of good character and | 23 |
| reputation in the
community in which he resides;
| 24 |
| (2) a person who has been convicted of a felony | 25 |
| under any Federal or
State law, if the Department, | 26 |
| after investigation and a hearing, if
requested by the |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| applicant, determines that such person has not been
| 2 |
| sufficiently rehabilitated to warrant the public | 3 |
| trust;
| 4 |
| (3) a corporation, if any officer, manager or | 5 |
| director thereof, or any
stockholder or stockholders | 6 |
| owning in the aggregate more than 5% of the
stock of | 7 |
| such corporation, would not be eligible to receive a | 8 |
| license under
this Act for any reason. | 9 |
| (4) a person, or any person who owns more than 15 | 10 |
| percent of the ownership interests in a person or a | 11 |
| related party who: | 12 |
| (a) owes, at the time of application, $500 or | 13 |
| more in delinquent cigarette taxes that have been | 14 |
| determined by law to be due and unpaid, unless the | 15 |
| license applicant has entered into an agreement | 16 |
| approved by the Department to pay the amount due; | 17 |
| (b) had a license under this Act revoked within | 18 |
| the past two years by the Department for willful | 19 |
| misconduct relating to stolen or contraband | 20 |
| cigarettes or has been convicted of a State or | 21 |
| federal crime, punishable by imprisonment of one | 22 |
| year or more, relating to stolen or contraband | 23 |
| cigarettes; | 24 |
| (c) is a distributor who manufactures | 25 |
| cigarettes who is neither (i) a participating | 26 |
| manufacturer as defined in subsection II(jj) of |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| the "Master Settlement Agreement" as defined in | 2 |
| Sections 10 of the Tobacco Products Manufacturers' | 3 |
| Escrow Act and the Tobacco Products Manufacturers' | 4 |
| Escrow Enforcement Act of 2003 (30 ILCS 168/10 and | 5 |
| 30 ILCS 167/10); nor (ii) in full compliance with | 6 |
| Tobacco Products Manufacturers' Escrow Act and the | 7 |
| Tobacco Products Manufacturers' Escrow Enforcement | 8 |
| Act of 2003 (30 ILCS 168/ and 30 ILCS 167/); | 9 |
| (d) has been found to have willfully imported | 10 |
| or caused to be imported into the United States for | 11 |
| sale or distribution any cigarette in violation of | 12 |
| 19 U.S.C. 1681a; | 13 |
| (e) has been found to have willfully imported | 14 |
| or caused to be imported into the United States for | 15 |
| sale or distribution or manufactured for sale or | 16 |
| distribution in the United States any cigarette | 17 |
| that does not fully comply with the Federal | 18 |
| Cigarette Labeling and Advertising Act (15 U.S.C. | 19 |
| 1331, et. seq.); or | 20 |
| (f) has willfully made a material false | 21 |
| statement in the application or has willfully | 22 |
| failed to produce records required to be | 23 |
| maintained by this Act.
| 24 |
| The Department, upon receipt of an application, license fee | 25 |
| and bond in
proper form, from a person who is eligible to | 26 |
| receive a distributor's
license under this Act, shall issue to |
|
|
|
SB2026 |
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LRB095 18691 BDD 44792 b |
|
| 1 |
| such applicant a revocable license in form as
prescribed by the | 2 |
| Department, which license shall permit the applicant to
which | 3 |
| it is issued to engage in business as a distributor at the | 4 |
| place
shown in his application. A distributor that operates at | 5 |
| multiple locations within this State must possess a separate, | 6 |
| individual license for each such location. To assist in the | 7 |
| valid administrative needs of the Department, the Department | 8 |
| shall assign each licensee a unique numerical identifier. All | 9 |
| licenses issued by the Department under this
Act shall be valid | 10 |
| for not to exceed one year after issuance unless sooner
| 11 |
| revoked, canceled or suspended as provided in this Act. No | 12 |
| license issued
under this Act is transferable or assignable. | 13 |
| Such license shall be
conspicuously displayed in the place of | 14 |
| business conducted by the licensee
in Illinois under such | 15 |
| license. No distributor licensee acquires any vested interest | 16 |
| or compensable property right in a license issued under this | 17 |
| Act. | 18 |
| A licensed distributor shall notify the Department of any | 19 |
| change in the information contained on the application form, | 20 |
| including any change in ownership and shall do so within 30 | 21 |
| days after any such change.
| 22 |
| Any person aggrieved by any decision of the Department | 23 |
| under this Section
may, within 20 days after notice of the | 24 |
| decision, protest and request a
hearing. Upon receiving a | 25 |
| request for a hearing, the Department shall give
notice to the | 26 |
| person requesting the hearing of the time and place fixed for |
|
|
|
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|
| 1 |
| the
hearing and shall hold a hearing in conformity with the | 2 |
| provisions of this Act
and then issue its final administrative | 3 |
| decision in the matter to that person.
In the absence of a | 4 |
| protest and request for a hearing within 20 days, the
| 5 |
| Department's decision shall become final without any further | 6 |
| determination
being made or notice given.
| 7 |
| (Source: P.A. 91-901, eff. 1-1-01; 92-322, eff. 1-1-02.)
| 8 |
| (35 ILCS 130/4c new) | 9 |
| Sec. 4c. Retailer's sub-certificate of registration. No | 10 |
| person may engage in business as a retailer in this State | 11 |
| without having obtained both a certificate of registration | 12 |
| described in Section 2a of the Retailers' Occupation Tax Act | 13 |
| (35 ILCS 120/2a) and a sub-certificate of registration | 14 |
| described in this Section. To engage in the business of selling | 15 |
| cigarettes at retail, retailers must obtain and maintain a | 16 |
| sub-certificate of registration from the Department prior to | 17 |
| the date of issuance or renewal of a retailer certificate of | 18 |
| registration. Such retailer sub-certificates shall be issued | 19 |
| without charge in such form as the Department may prescribe and | 20 |
| shall not be transferable or assignable. | 21 |
| The expiration date of a retailer's sub-certificate of | 22 |
| registration shall be that of the certificate of registration | 23 |
| to which the sub-certificate relates, but shall not be valid | 24 |
| after the expiration of 5 years from the date of its issuance | 25 |
| or last renewal. The retailer's sub-certificate of |
|
|
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| 1 |
| registration shall not renew automatically. Sub-certificates | 2 |
| of registration shall be renewed only upon timely application. | 3 |
| The Department shall issue sub-certificates of | 4 |
| registration to retailers pursuant to this Act and under such | 5 |
| terms and conditions as it may determine to further the | 6 |
| requirements of this Act for each separate place of business | 7 |
| for each retailer within this State. Retailers shall | 8 |
| prominently display the appropriate sub-certificate of | 9 |
| registration at each place of business in such a manner as to | 10 |
| ensure that it is visible to all persons entering the place of | 11 |
| business. All sub-certificates of registration shall bear the | 12 |
| same registration number as that appearing upon the certificate | 13 |
| of registration to which the sub-certificate relates. | 14 |
| Application for a retailer's sub-certificate of | 15 |
| registration or a renewal thereof shall be made to the | 16 |
| Department upon forms furnished and prescribed by the | 17 |
| Department. Each such application shall be signed and verified | 18 |
| under penalty of perjury and shall state: | 19 |
| (1) if the applicant is an individual, the name and | 20 |
| business address of the applicant; | 21 |
| (2) if the applicant is a firm, partnership, or | 22 |
| association, the name and business address of each of its | 23 |
| members and any related party; | 24 |
| (3) if the applicant is an individual, the identity of | 25 |
| any distributor, manufacturer, or retailer in which the | 26 |
| individual, directly or indirectly, owns more than 15 |
|
|
|
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|
| 1 |
| percent of the ownership interests; | 2 |
| (4) if the applicant is a corporation or limited | 3 |
| liability company, the name and business address of each of | 4 |
| its officers and the name and business address of any | 5 |
| person who owns, directly or indirectly, in the aggregate, | 6 |
| more than 15 percent of the ownership interests in the | 7 |
| corporation or limited liability company and the name and | 8 |
| business address of any distributor, manufacturer, or | 9 |
| retailer in which the applicant owns more than 15 percent | 10 |
| of the ownership interests; | 11 |
| (5) the name under which such applicant regularly does | 12 |
| business; | 13 |
| (6) the physical address of the applicant's principal | 14 |
| place of business and any other place of business within | 15 |
| this state; | 16 |
| (7) the kind or nature of the business to be conducted; | 17 |
| (8) sufficient information to demonstrate that the | 18 |
| applicant has complied or will comply with all of the | 19 |
| requirements of this Act, including the identity of any | 20 |
| related party; and | 21 |
| (9) whether the applicant has committed any act in the | 22 |
| previous 5 years that would render the applicant ineligible | 23 |
| for a sub-certificate of registration or whether the | 24 |
| applicant has been convicted of a crime related to | 25 |
| contraband cigarettes, punishable by imprisonment of one | 26 |
| year or more. |
|
|
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|
| 1 |
| The Department shall not grant or renew a sub-certificate | 2 |
| of registration or allow such a sub-certificate to be | 3 |
| maintained if it determines the applicant or any person who | 4 |
| owns more than 15 percent of the ownership interests in the | 5 |
| applicant or a related party: | 6 |
| (1) owes, at the time of application, $500 or more in | 7 |
| delinquent cigarette or retail taxes that have been | 8 |
| determined by law to be due and unpaid, unless the | 9 |
| applicant has entered into an agreement approved by the | 10 |
| Department to pay the amount due; | 11 |
| (2) had a sub-certificate of registration under this | 12 |
| Act revoked within the past two years by the Department for | 13 |
| willful misconduct relating to stolen or contraband | 14 |
| cigarettes or has been convicted of a State or Federal | 15 |
| crime, punishable by imprisonment of one year or more, | 16 |
| relating to stolen or contraband cigarettes; | 17 |
| (3) has been found to have willfully imported or caused | 18 |
| to be imported into the United States for sale or | 19 |
| distribution any cigarette in violation of 19 U.S.C. 1681a; | 20 |
| (4) has been found to have willfully imported or caused | 21 |
| to be imported into the United States for sale or | 22 |
| distribution or manufactured for sale or distribution in | 23 |
| the United States any cigarette that does not fully comply | 24 |
| with the Federal Cigarette Labeling and Advertising Act (15 | 25 |
| U.S.C. 1331, et. seq.); or | 26 |
| (5) has willfully made a material false statement in |
|
|
|
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|
| 1 |
| the application or has willfully failed to produce records | 2 |
| required to be maintained by this Act. | 3 |
| A retailer shall notify the Department of any change in the | 4 |
| information contained on the application form, including any | 5 |
| change in ownership and shall do so within 30 days of any such | 6 |
| change. | 7 |
| No retailer acquires any vested interest or compensable | 8 |
| property right in a sub-certificate of registration issued | 9 |
| under this Act. | 10 |
| (35 ILCS 130/4d new) | 11 |
| Sec. 4d. Transactions only with licensed distributors, | 12 |
| out-of-state manufacturers holding a permit, and retailers | 13 |
| holding a sub-certificate of registration. A distributor or | 14 |
| manufacturer may sell or distribute cigarettes to a person | 15 |
| located or doing business within this State only if such person | 16 |
| is a licensed distributor or retailer holding a sub-certificate | 17 |
| of registration. A retailer may only sell cigarettes obtained | 18 |
| from a licensed distributor or an out-of-state manufacturer | 19 |
| holding a permit. | 20 |
| (35 ILCS 130/4e new) | 21 |
| Sec. 4e. Proof of license, permit, or sub-certificate | 22 |
| required. A distributor, manufacturer, or retailer shall, | 23 |
| prior to the initial sale or exchange of cigarettes with any | 24 |
| person that is required to be licensed, hold a permit, or hold |
|
|
|
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|
| 1 |
| a sub-certificate under this Act, require proof of a valid | 2 |
| license, permit, or sub-certificate for the relevant business | 3 |
| location issued under this Act. | 4 |
| (35 ILCS 130/4f new) | 5 |
| Sec. 4f. Maintenance of and publication of list of | 6 |
| licenses, permits, and sub-certificates issued. Within 30 days | 7 |
| after the effective date of this amendatory Act of the 95th | 8 |
| General Assembly, the Department shall create and maintain a | 9 |
| website setting forth the identity of all persons issued | 10 |
| licenses, permits, or sub-certificates under this Act and the | 11 |
| business locations of each licensee, permittee, or | 12 |
| sub-certificate holder, itemized by type of license, permit, or | 13 |
| certificate possessed, and shall update the website no less | 14 |
| frequently than once per month. The Department shall, at a | 15 |
| minimum, include on the website the legal name of the licensee, | 16 |
| permittee, or sub-certificate holder, the numerical identifier | 17 |
| issued to the licensee, permittee, or sub-certificate holder, | 18 |
| and any name under which such licensee, permittee, or | 19 |
| sub-certificate holder regularly does business. | 20 |
| (35 ILCS 130/4g new) | 21 |
| Sec. 4g. Maintenance of and publication of list of | 22 |
| licensees, permittees, and sub-certificate holders whose | 23 |
| licenses, permits, or sub-certificates have been suspended, | 24 |
| cancelled, or revoked. Within 30 days after the effective date |
|
|
|
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|
| 1 |
| of this amendatory Act of the 95th General Assembly, the | 2 |
| Department shall create and maintain a website setting forth | 3 |
| the identity of all persons whose licenses, permits, or | 4 |
| sub-certificates have been suspended, cancelled, or revoked | 5 |
| under this Act within the past 3 years, itemized by type of | 6 |
| license, permit, or sub-certificate, and shall update the | 7 |
| website within 30 days after the date the Department suspends, | 8 |
| cancels, or revokes any person's license, permit, or | 9 |
| sub-certificate. The Department shall, at a minimum, include on | 10 |
| the website the legal name, the business locations, the unique | 11 |
| numerical identifier issued prior to the suspension, | 12 |
| cancellation, or revocation of the, and any name under which | 13 |
| such licensee, permittee, or sub-certificate holder regularly | 14 |
| does business.
| 15 |
| (35 ILCS 130/5) (from Ch. 120, par. 453.5)
| 16 |
| Sec. 5. Printing tax stamps. The Department shall adopt the | 17 |
| design or
designs of the tax stamps
or alternative tax indicia
| 18 |
| and shall procure the printing of such stamps
or alternative | 19 |
| tax indicia
in such amounts and denominations as it deems | 20 |
| necessary to provide for the
affixation of the proper amount of | 21 |
| tax stamps
or alternative tax indicia
to each original package | 22 |
| of
cigarettes. | 23 |
| Each roll or sheet of tax stamps shall have a separate and | 24 |
| unique serial number that shall be clearly visible at the point | 25 |
| of sale. The Department shall keep records of which licensed |
|
|
|
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LRB095 18691 BDD 44792 b |
|
| 1 |
| distributor or out-of-state manufacturer holding a permit | 2 |
| purchases each roll or sheet of stamps identified by serial | 3 |
| number. | 4 |
| Each licensed distributor or out-of-state manufacturer | 5 |
| holding a permit authorized by the Department to make meter | 6 |
| impressions shall be assigned a unique meter impression number, | 7 |
| which number shall not be used by any other distributor or | 8 |
| manufacturer and shall be visible and easily identifiable on | 9 |
| the impression at the point of sale on each pack of cigarettes. | 10 |
| The Department shall keep records detailing the meter | 11 |
| impression number assigned to each licensed distributor or | 12 |
| out-of-state manufacturer holding a permit.
| 13 |
| (Source: P.A. 92-322, eff. 1-1-02.)
| 14 |
| (35 ILCS 130/6a new) | 15 |
| Sec. 6a. Revocation, cancellation, or suspension of | 16 |
| retailer's sub-certificate of registration. The Department | 17 |
| may, after notice and hearing as provided for by this Act, | 18 |
| revoke, cancel or suspend a retailers' sub-certificate of | 19 |
| registration for the violation of any provision of this Act, or | 20 |
| for noncompliance with any provision herein contained, or for | 21 |
| any noncompliance with any lawful rule or regulation | 22 |
| promulgated by the Department, or because the sub-certificate | 23 |
| holder is determined to be ineligible for a retailer's | 24 |
| sub-certificate of registration for any one or more of the | 25 |
| reasons provided for in Section 4c of this Act (35 ILCS |
|
|
|
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LRB095 18691 BDD 44792 b |
|
| 1 |
| 130/4c). However, no such sub-certificate shall be revoked, | 2 |
| cancelled or suspended, except after a hearing by the | 3 |
| Department with notice to the retailer, as aforesaid, and | 4 |
| affording such retailer a reasonable opportunity to appear and | 5 |
| defend, and any retailer aggrieved by any decision of the | 6 |
| Department with respect thereto may have the determination of | 7 |
| the Department judicially reviewed, as herein provided. | 8 |
| A retailer's sub-certificate of registration is revoked, | 9 |
| cancelled, or suspended if the retail certificate of | 10 |
| registration to which it relates is revoked, cancelled, or | 11 |
| suspended. However, no such sub-certificate shall be revoked, | 12 |
| cancelled, or suspended, except after a hearing by the | 13 |
| Department with notice to the retailer, as aforesaid, and | 14 |
| affording such retailer a reasonable opportunity to appear and | 15 |
| defend, and any retailer aggrieved by any decision of the | 16 |
| Department with respect thereto may have the determination of | 17 |
| the Department judicially reviewed, as herein provided. | 18 |
| Any retailer aggrieved by any decision of the Department | 19 |
| under this Section may, within 20 days after notice of the | 20 |
| decision, protest and request a hearing. Upon receiving a | 21 |
| request for a hearing, the Department shall give notice in | 22 |
| writing to the retailer requesting the hearing that contains a | 23 |
| statement of the charges preferred against the retailer and | 24 |
| that states the time and place fixed for the hearing. The | 25 |
| Department shall hold the hearing in conformity with the | 26 |
| provisions of this Act and then issue its final administrative |
|
|
|
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|
| 1 |
| decision in the matter to the retailer. In the absence of a | 2 |
| protest and request for a hearing within 20 days, the | 3 |
| Department's decision shall become final without any further | 4 |
| determination being made or notice given. | 5 |
| No sub-certificate so revoked, as aforesaid, shall be | 6 |
| reissued to any such retailer within a period of 6 months after | 7 |
| the date of the final determination of such revocation. No such | 8 |
| sub-certificate shall be reissued at all so long as the person | 9 |
| who would receive the sub-certificate is ineligible to receive | 10 |
| a retailer's sub-certificate of registration under this Act for | 11 |
| any one or more of the reasons provided for in Section 4c of | 12 |
| this Act (35 ILCS 130/4c). | 13 |
| The Department, upon complaint filed in the circuit court, | 14 |
| may by injunction restrain any person who fails, or refuses, to | 15 |
| comply with any of the provisions of this Act from acting as a | 16 |
| retailer of cigarettes in this State.
| 17 |
| (35 ILCS 130/11) (from Ch. 120, par. 453.11)
| 18 |
| Sec. 11. Every distributor of cigarettes, who is required | 19 |
| to procure a
license under this Act, shall keep within | 20 |
| Illinois, at his licensed
address, complete and accurate | 21 |
| records of cigarettes held, purchased,
manufactured, brought | 22 |
| in or caused to be brought in from without the State,
and sold, | 23 |
| or otherwise disposed of, and shall preserve and keep within
| 24 |
| Illinois at his licensed address all invoices, bills of lading, | 25 |
| sales
records, copies of bills of sale, inventory at the close |
|
|
|
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|
| 1 |
| of each period for
which a return is required of all cigarettes | 2 |
| on hand and of all cigarette
revenue stamps, both affixed and | 3 |
| unaffixed, and other pertinent papers and
documents relating to | 4 |
| the manufacture, purchase, sale or disposition of
cigarettes. | 5 |
| All books and records and other papers and documents that are
| 6 |
| required by this Act to be kept shall be itemized by quantity | 7 |
| and brand style, itemized for each of the distributor's | 8 |
| facilities, kept in the English language, and
shall, at all | 9 |
| times during the usual business hours of the day, be subject
to | 10 |
| inspection by the Department or its duly authorized agents and | 11 |
| employees.
The Department may adopt rules that establish | 12 |
| requirements, including record
forms and formats, for records | 13 |
| required to be kept and maintained by taxpayers.
For purposes | 14 |
| of this Section, "records" means all data maintained by the
| 15 |
| taxpayer, including data on paper, microfilm, microfiche or any | 16 |
| type of
machine-sensible data compilation. Those books, | 17 |
| records, papers and documents
shall be preserved for a period | 18 |
| of at least 3 years after the date of the
documents, or the | 19 |
| date of the entries appearing in the records, unless the
| 20 |
| Department, in writing, authorizes their destruction or | 21 |
| disposal at an earlier
date. At all times during the usual | 22 |
| business hours of the day any duly
authorized agent or employee | 23 |
| of the Department may enter any place of business
of the | 24 |
| distributor, without a search warrant, and inspect the premises | 25 |
| and the
stock or packages of cigarettes and the vending devices | 26 |
| therein contained, to
determine whether any of the provisions |
|
|
|
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|
| 1 |
| of this Act are being violated. If such
agent or employee is | 2 |
| denied free access or is hindered or interfered with in
making | 3 |
| such examination as herein provided, the license of the | 4 |
| distributor at
such premises shall be subject to revocation by | 5 |
| the Department.
| 6 |
| (Source: P.A. 88-480.)
| 7 |
| (35 ILCS 130/11a new) | 8 |
| Sec. 11a. Retailer records. Every cigarette retailer who is | 9 |
| required to procure a sub-certificate of registration under | 10 |
| this Act shall keep within Illinois, at the corresponding place | 11 |
| of business, copies of invoices or equivalent documentation, | 12 |
| itemized by quantity and brand style, for each transaction | 13 |
| involving the sale, purchase, transfer, consignment, or | 14 |
| receipt of packs of cigarettes. | 15 |
| Records required under this Section shall be preserved on | 16 |
| the premises described in the relevant sub-certificate of | 17 |
| registration in such a manner as to ensure permanency and | 18 |
| accessibility for inspection. All books and records and other | 19 |
| papers and documents required by this Act to be kept shall be | 20 |
| kept in the English language, and shall, at all times during | 21 |
| the usual business hours of the day, be subject to inspection | 22 |
| by the Department or its duly authorized agents and employees. | 23 |
| Such books and records shall be preserved for a period of at | 24 |
| least 3 years after the date of the documents, or the date of | 25 |
| the entries appearing in the records. |
|
|
|
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|
| 1 |
| At all times during the usual business hours of the day any | 2 |
| duly authorized agent or employee of the Department may enter | 3 |
| any place of business of the retailer, without a search | 4 |
| warrant, and inspect the premises and the stock or packages of | 5 |
| cigarettes and the vending devices therein contained, to | 6 |
| determine whether any of the provisions of this Act are being | 7 |
| violated. If such agent or employee is denied free access or is | 8 |
| hindered or interfered with in making such examination as | 9 |
| herein provided, the sub-certificate of the retailer at such | 10 |
| premises shall be subject to revocation by the Department. | 11 |
| The Department is authorized to disclose to the Attorney | 12 |
| General any information received under this Section and | 13 |
| requested by the Attorney General. The Department and the | 14 |
| Attorney General shall share with each other the information | 15 |
| received under this Section and may share the information with | 16 |
| other federal, State, or local agencies for purposes of | 17 |
| enforcement of this Act or the laws of the Federal government | 18 |
| or of other States.
| 19 |
| (35 ILCS 130/20) (from Ch. 120, par. 453.20)
| 20 |
| Sec. 20. Whenever any peace officer of the State or any | 21 |
| duly authorized
officer or employee of the Department shall | 22 |
| have reason to believe that any
violation of this Act has | 23 |
| occurred and that the person so violating the
Act has in his, | 24 |
| her or its possession any original package of cigarettes,
not | 25 |
| tax stamped or tax imprinted underneath the sealed transparent |
|
|
|
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|
| 1 |
| wrapper
of such original package as required by this Act, or | 2 |
| any vending device
containing such original packages to which | 3 |
| stamps have not been affixed, or
on which an authorized | 4 |
| substitute for stamps has not been imprinted
underneath the | 5 |
| sealed transparent wrapper of such original packages, as
| 6 |
| required by this Act, he may file or cause to be filed his | 7 |
| complaint in
writing, verified by affidavit, with any court | 8 |
| within whose jurisdiction
the premises to be searched are | 9 |
| situated, stating the facts upon which such
belief is founded, | 10 |
| the premises to be searched, and the property to be
seized, and | 11 |
| procure a search warrant and execute the same. Upon the
| 12 |
| execution of such search warrant, the peace officer, or officer | 13 |
| or employee
of the Department, executing such search warrant | 14 |
| shall make due return
thereof to the court issuing the same, | 15 |
| together with an inventory of the
property taken thereunder. | 16 |
| The court shall thereupon issue process against
the owner of | 17 |
| such property if he is known; otherwise, such process shall be
| 18 |
| issued against the person in whose possession the property so | 19 |
| taken is
found, if such person is known. In case of inability | 20 |
| to serve such process
upon the owner or the person in | 21 |
| possession of the property at the time of
its seizure, as | 22 |
| hereinbefore provided, notice of the proceedings before the
| 23 |
| court shall be given as required by the statutes of the State | 24 |
| governing
cases of Attachment. Upon the return of the process | 25 |
| duly served or upon the
posting or publishing of notice made, | 26 |
| as hereinabove provided, the court or
jury, if a jury shall be |
|
|
|
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|
| 1 |
| demanded, shall proceed to determine whether or
not such | 2 |
| property so seized was held or possessed in violation of this | 3 |
| Act,
or whether, if a vending device has been so seized, it | 4 |
| contained at the
time of its seizure original packages not tax | 5 |
| stamped or tax imprinted
underneath the sealed transparent | 6 |
| wrapper of such original packages as
required by this Act. In | 7 |
| case of a finding that the original packages
seized were not | 8 |
| tax stamped or tax imprinted underneath the sealed
transparent | 9 |
| wrapper of such original packages in accordance with the
| 10 |
| provisions of this Act, or that any vending device so seized | 11 |
| contained at
the time of its seizure original packages not tax | 12 |
| stamped or tax imprinted
underneath the sealed transparent | 13 |
| wrapper of such original packages in
accordance with the | 14 |
| provisions of this Act, judgment shall be entered
confiscating | 15 |
| and forfeiting the property to the State and ordering its
| 16 |
| delivery to the Department, and in addition thereto, the court | 17 |
| shall have
power to tax and assess the costs of the | 18 |
| proceedings.
| 19 |
| When any original packages or any cigarette vending device | 20 |
| shall have
been declared forfeited to the State by any court, | 21 |
| as hereinbefore
provided, and when such confiscated and | 22 |
| forfeited property shall have been
delivered to the Department, | 23 |
| as provided in this Act, the said Department
shall destroy sell | 24 |
| such property . The Department may, prior to any destruction of | 25 |
| cigarettes, permit the true holder of the trademark rights in | 26 |
| the cigarette brand to inspect such contraband cigarettes, in |
|
|
|
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|
| 1 |
| order to assist the Department in any investigation regarding | 2 |
| such cigarettes. for the best price obtainable and shall | 3 |
| forthwith
pay over the proceeds of such sale to the State | 4 |
| Treasurer; provided,
however, that if the value of such | 5 |
| property to be sold at any one time
shall be $500 or more, such | 6 |
| property shall be sold only to the highest and
best bidder on | 7 |
| such terms and conditions and on open competitive bidding
after | 8 |
| public advertisement, in such manner and for such terms as the
| 9 |
| Department, by rule, may prescribe.
| 10 |
| Upon making such a sale of original packages of cigarettes | 11 |
| which were
not tax stamped or tax imprinted underneath the | 12 |
| sealed transparent wrapper
of such original packages as | 13 |
| required by this Act, the Department shall
affix a distinctive | 14 |
| stamp to each of the original packages so sold
indicating that | 15 |
| the same are sold pursuant to the provisions of this
Section.
| 16 |
| (Source: Laws 1965, p. 3707.)
| 17 |
| (35 ILCS 130/21) (from Ch. 120, par. 453.21)
| 18 |
| Sec. 21. Destruction or use of forfeited property. | 19 |
| (a) When any original packages of cigarettes or
any | 20 |
| cigarette vending device shall have been declared forfeited to | 21 |
| the State by
the Department, as provided in Section 18a of this | 22 |
| Act, and when all proceedings
for the judicial review of the | 23 |
| Department's decision have terminated, the
Department shall, | 24 |
| to the extent that its decision is sustained on review, | 25 |
| destroy , or maintain and use such property in an undercover |
|
|
|
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|
| 1 |
| capacity , or sell
such property for the best price obtainable | 2 |
| and shall forthwith pay over the
proceeds of such sale to the | 3 |
| State Treasurer.
If the value of such property to be sold at | 4 |
| any one time is
$500 or more, however,
such property shall be | 5 |
| sold only to the highest and best bidder on
such terms and | 6 |
| conditions and on open competitive bidding after public
| 7 |
| advertisement, in such manner and for such terms as the | 8 |
| Department, by
rule, may prescribe .
| 9 |
| (b) The Department may, prior to any destruction of | 10 |
| cigarettes, permit the true holder of the trademark rights in | 11 |
| the cigarette brand to inspect such contraband cigarettes in | 12 |
| order to assist the Department in any investigation regarding | 13 |
| such cigarettes. If no complaint for review, as provided in | 14 |
| Section 8 of
this Act, has been filed within the time required | 15 |
| by the Administrative
Review Law, and if no stay order has been | 16 |
| entered thereunder, the
Department shall proceed to sell the | 17 |
| property for the
best price obtainable and shall forthwith pay | 18 |
| over the proceeds of such
sale to the State Treasurer. If the | 19 |
| value
of such property to be sold at any one time is $500
or | 20 |
| more, however, such property
shall be sold only to the highest | 21 |
| and best bidder on such terms and
conditions and on open | 22 |
| competitive bidding after public
advertisement, in such manner | 23 |
| and for such terms as the Department, by
rule, may prescribe.
| 24 |
| (c) Upon making a sale of unstamped original packages of
| 25 |
| cigarettes as provided in this Section, the Department shall | 26 |
| affix
a distinctive stamp to each of the original packages so |
|
|
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| sold indicating
that the same are sold under this Section.
| 2 |
| (d) Notwithstanding the foregoing, any cigarettes seized | 3 |
| under
this Act or under the Cigarette Use Tax Act may, at the | 4 |
| discretion of the
Director of Revenue, be distributed to any | 5 |
| eleemosynary institution within
the State of Illinois.
| 6 |
| (Source: P.A. 94-776, eff. 5-19-06.)
| 7 |
| (35 ILCS 130/9c rep.)
| 8 |
| (35 ILCS 130/28 rep.)
| 9 |
| Section 10. The Cigarette Tax Act is amended by repealing | 10 |
| Sections 9c and 28. | 11 |
| Section 15. The Prevention of Cigarette Sales to Minors Act | 12 |
| is amended by changing Sections 5 and 10 and by adding Sections | 13 |
| 2, 6, 7, 8, 9, 20, 25, and 30 as follows: | 14 |
| (720 ILCS 678/2 new)
| 15 |
| Sec. 2. Definitions. For the purpose of this Act: | 16 |
| "Clear and conspicuous statement" means the statement is of | 17 |
| sufficient type size to be clearly readable by the recipient of | 18 |
| the communication. | 19 |
| "Consumer" means an individual who acquires or seeks to | 20 |
| acquire cigarettes for personal use. | 21 |
| "Delivery sale" means any sale of cigarettes to a consumer | 22 |
| if: | 23 |
| (a) the consumer submits the order for such sale by |
|
|
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| means of a telephone or other method of voice transmission, | 2 |
| the mails, or the Internet or other online service, or the | 3 |
| seller is otherwise not in the physical presence of the | 4 |
| buyer when the request for purchase or order is made; or | 5 |
| (b) the cigarettes are delivered by use of a common | 6 |
| carrier, private delivery
service, or the mails, or the | 7 |
| seller is not in the physical presence of the buyer when | 8 |
| the buyer obtains possession of the cigarettes. | 9 |
| "Delivery service" means any person (other than a person | 10 |
| that makes a delivery sale) who
delivers to the consumer the | 11 |
| cigarettes sold in a delivery sale. | 12 |
| "Department" means the Department of Revenue. | 13 |
| "Government-issued identification" means a State driver's | 14 |
| license, State identification card, passport, a military | 15 |
| identification or an official naturalization or immigration | 16 |
| document, such as an alien registration recipient card | 17 |
| (commonly known as a "green card") or an immigrant visa. | 18 |
| "Legal minimum age" means the minimum age at which an | 19 |
| individual may legally purchase cigarettes within this State, | 20 |
| as determined by either State or local government. | 21 |
| "Mails" or "mailing" mean the shipment of cigarettes | 22 |
| through the United States Postal Service. | 23 |
| "Out-of-state sale" means a sale of cigarettes to a | 24 |
| consumer located outside of this State where the consumer | 25 |
| submits the order for such sale by means of a telephonic or | 26 |
| other method of voice transmission, the mails or any other |
|
|
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| delivery service, facsimile transmission, or the Internet or | 2 |
| other online service and where the cigarettes are delivered by | 3 |
| use of the mails or other delivery service. | 4 |
| "Person" means any individual, corporation, partnership, | 5 |
| limited liability company, association, or other organization | 6 |
| that engages in any for profit or not-for-profit activities. | 7 |
| "Shipping package" means a container in which packs or | 8 |
| cartons of cigarettes are shipped in connection with a delivery | 9 |
| sale. | 10 |
| "Shipping documents" means bills of lading, air bills, or | 11 |
| any other documents used to evidence the undertaking by a | 12 |
| delivery service to deliver letters, packages, or other | 13 |
| containers. | 14 |
| "Within this State" means within the exterior limits of the | 15 |
| State of Illinois and includes all territory within these | 16 |
| limits owned by or ceded to the United States of America. | 17 |
| (720 ILCS 678/5)
| 18 |
| Sec. 5. Unlawful shipment or transportation of cigarettes. | 19 |
| (a) It is unlawful for any person engaged in the business | 20 |
| of selling cigarettes to ship or cause to be shipped any | 21 |
| cigarettes unless the person shipping the cigarettes:
| 22 |
| (1) is licensed as a distributor under either
the | 23 |
| Cigarette Tax Act, or the Cigarette Use Tax Act; or
| 24 |
| delivers the cigarettes to a distributor licensed under | 25 |
| either the Cigarette Tax Act or the Cigarette Use Tax Act; |
|
|
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| or | 2 |
| (2) ships them to an export warehouse proprietor | 3 |
| pursuant to
Chapter 52 of the Internal Revenue Code, or an | 4 |
| operator of
a customs bonded warehouse pursuant to Section | 5 |
| 1311 or
1555 of Title 19 of the United States Code.
| 6 |
| For purposes of this subsection (a), a person is a licensed | 7 |
| distributor if the person's name appears on a list of licensed | 8 |
| distributors published by the Illinois Department of Revenue.
| 9 |
| The term cigarette has the same meaning as defined in Section 1 | 10 |
| of the Cigarette Tax Act and Section 1 of the Cigarette Use Tax | 11 |
| Act.
Nothing in this Act prohibits a person licensed as a | 12 |
| distributor under the Cigarette Tax Act or the Cigarette Use | 13 |
| Tax Act from shipping or causing to be shipped any cigarettes | 14 |
| to a registered retailer under the Retailers' Occupation Tax | 15 |
| Act and the Cigarette Tax Act provided the cigarette tax or | 16 |
| cigarette use tax has been paid.
| 17 |
| (b) A common or contract carrier may transport cigarettes | 18 |
| to any individual person in this State only if the carrier | 19 |
| reasonably believes such cigarettes have been received from a | 20 |
| person described in paragraph (a)(1). Common or contract | 21 |
| carriers may make deliveries of cigarettes to licensed | 22 |
| distributors described in paragraph (a)(1) of this Section. | 23 |
| Nothing in this subsection (b) shall be construed to prohibit a | 24 |
| person other than a common or contract carrier from | 25 |
| transporting not more than 1,000 cigarettes at any one time to | 26 |
| any person in this State.
|
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| (c) A common or contract carrier may not complete the | 2 |
| delivery of any cigarettes to persons other than those | 3 |
| described in paragraph (a)(1) of this Section without first | 4 |
| obtaining from the purchaser an official written | 5 |
| identification from any state or federal agency that displays | 6 |
| the person's date of birth or a birth certificate that includes | 7 |
| a reliable confirmation that the purchaser is at least 18 years | 8 |
| of age; that the cigarettes purchased are not intended for | 9 |
| consumption by an individual who is younger than 18 years of | 10 |
| age; and a written statement signed by the purchaser that | 11 |
| certifies the purchaser's address and that the purchaser is at | 12 |
| least 18 years of age. The statement shall also confirm: (1) | 13 |
| that the purchaser understands that signing another person's | 14 |
| name to the certification is illegal; (2) that the sale of | 15 |
| cigarettes to individuals under 18 years of age is illegal; and | 16 |
| (3) that the purchase of cigarettes by individuals under 18 | 17 |
| years of age is illegal under the laws of Illinois. | 18 |
| (d) When a person engaged in the business of selling
| 19 |
| cigarettes ships or causes to be shipped any cigarettes to any | 20 |
| person in this State, other than in the cigarette | 21 |
| manufacturer's or tobacco products manufacturer's original | 22 |
| container or wrapping, the container or wrapping must be | 23 |
| plainly and visibly marked with the word "cigarettes".
| 24 |
| (e) When a peace officer of this State or any duly | 25 |
| authorized officer or employee of the Illinois Department of | 26 |
| Public Health or Department of Revenue discovers any cigarettes |
|
|
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| which have been or which are being shipped or transported in | 2 |
| violation of this Section, he or she shall seize and take | 3 |
| possession of the cigarettes, and the cigarettes shall be | 4 |
| subject to a forfeiture action pursuant to the procedures | 5 |
| provided under the Cigarette Tax Act or Cigarette Use Tax Act.
| 6 |
| (Source: P.A. 93-960, eff. 8-20-04.) | 7 |
| (720 ILCS 678/6 new)
| 8 |
| Sec. 6. Prevention of delivery sales to minors. | 9 |
| (a) No person shall make a delivery sale of cigarettes to | 10 |
| any individual who is
under the legal minimum age. | 11 |
| (b) Each person accepting a purchase order for a delivery | 12 |
| sale shall comply with
the provisions of this Act and all other | 13 |
| laws of this State generally applicable to sales of cigarettes | 14 |
| that occur entirely within this State, including, but not | 15 |
| limited to, those laws imposing: (i) excise taxes; (ii) sales | 16 |
| taxes; (iii) license and revenue-stamping requirements; and | 17 |
| (iv) escrow payment obligations. | 18 |
| (720 ILCS 678/7 new)
| 19 |
| Sec. 7. Age verification and shipping requirements to | 20 |
| prevent delivery sales to minors. | 21 |
| (a) No person, other than a delivery service, shall mail, | 22 |
| ship, or otherwise cause to be delivered a shipping package in | 23 |
| connection with a delivery sale unless the person: | 24 |
| (1) prior to the first delivery sale to the prospective |
|
|
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| consumer, obtains
from the prospective consumer a written | 2 |
| certification which includes a statement signed by the | 3 |
| prospective consumer that certifies: | 4 |
| (A) the prospective consumer's current address; | 5 |
| and | 6 |
| (B) that the prospective consumer is at least the | 7 |
| legal minimum age; | 8 |
| (2) informs, in writing, such prospective consumer | 9 |
| that: | 10 |
| (A) the signing of another person's name to the | 11 |
| certification described in
this Section is illegal; | 12 |
| (B) sales of cigarettes to individuals under the | 13 |
| legal minimum age are
illegal; | 14 |
| (C) the purchase of cigarettes by individuals | 15 |
| under the legal minimum age
is illegal; and | 16 |
| (D) the name and identity of the prospective | 17 |
| consumer may be reported to
the state of the consumer's | 18 |
| current address under the Act of October 19, 1949 (15 | 19 |
| U.S.C. § 375, et seq.), commonly known as the Jenkins | 20 |
| Act; | 21 |
| (3) makes a good faith effort to verify the date of | 22 |
| birth of the prospective
customer provided pursuant to this | 23 |
| Section by: | 24 |
| (A) comparing the date of birth against a | 25 |
| commercially available database
or | 26 |
| (B) obtaining a photocopy or other image of a |
|
|
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| valid, government-issued
identification stating the | 2 |
| date of birth or age of the prospective consumer; | 3 |
| (4) provides to the prospective consumer a notice that | 4 |
| meets the requirements of
subsection (b); | 5 |
| (5) receives payment for the delivery sale from the | 6 |
| prospective consumer by a
credit or debit card that has | 7 |
| been issued in such consumer's name, or by a check or other | 8 |
| written instrument in such consumer's name; and | 9 |
| (6) ensures that the shipping package is delivered to | 10 |
| the same address as is shown
on the government-issued | 11 |
| identification or contained in the commercially available | 12 |
| database. | 13 |
| (b) The notice required under this Section shall include: | 14 |
| (1) a statement that cigarette sales to consumers below | 15 |
| the legal minimum age are
illegal; | 16 |
| (2) a statement that sales of cigarettes are restricted | 17 |
| to those consumers who
provide verifiable proof of age in | 18 |
| accordance with subsection (a); | 19 |
| (3) a statement that cigarette sales are subject to tax | 20 |
| under Section 2 of the
Cigarette Tax Act (35 ILCS 130/2) | 21 |
| and an explanation of how such tax has been, or is to be, | 22 |
| paid with respect to such delivery sale. | 23 |
| (c) A statement meets the requirement of this Section if: | 24 |
| (1) the statement is clear and conspicuous; | 25 |
| (2) the statement is contained in a printed box set | 26 |
| apart from the other contents of
the communication; |
|
|
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| 1 |
| (3) the statement is printed in bold, capital letters; | 2 |
| (4) the statement is printed with a degree of color | 3 |
| contrast between the
background and the printed statement | 4 |
| that is no less than the color contrast between the | 5 |
| background and the largest text used in the communication; | 6 |
| and | 7 |
| (5) for any printed material delivered by electronic | 8 |
| means, the statement appears
at both the top and the bottom | 9 |
| of the electronic mail message or both the top and the | 10 |
| bottom of the Internet website homepage. | 11 |
| (d) Each person, other than a delivery service, who mails, | 12 |
| ships, or otherwise causes to be delivered a shipping package | 13 |
| in connection with a delivery sale shall: | 14 |
| (1) include as part of the shipping documents a clear | 15 |
| and conspicuous statement
stating: "Cigarettes: Illinois | 16 |
| Law Prohibits Shipping to Individuals Under 18 and Requires | 17 |
| the Payment of All Applicable Taxes"; | 18 |
| (2) use a method of mailing, shipping, or delivery that | 19 |
| requires a signature before
the shipping package is | 20 |
| released to the consumer; and | 21 |
| (3) ensure that the shipping package is not delivered | 22 |
| to any post office box. | 23 |
| (720 ILCS 678/8 new)
| 24 |
| Sec. 8. Registration and reporting requirements to prevent | 25 |
| delivery sales to minors. |
|
|
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| (a) Each person who makes a delivery sale of cigarettes to | 2 |
| a consumer located within this
State shall file with the | 3 |
| Department for each individual sale: | 4 |
| (1) a statement setting forth such person's name, trade | 5 |
| name, and the address of
such person's principal place of | 6 |
| business and any other place of business; and | 7 |
| (2) not later than the tenth day of each calendar | 8 |
| month, a memorandum or copy of
the invoice for each and | 9 |
| every such delivery sale made during the previous calendar | 10 |
| month, which includes the following information: | 11 |
| (A) the name and address of the consumer to whom | 12 |
| such delivery sale
was made; | 13 |
| (B) the brand style or brand styles of the | 14 |
| cigarettes that were sold in such
delivery sale; | 15 |
| (C) the quantity of cigarettes that were sold in | 16 |
| such delivery sale; and | 17 |
| (D) an indication of whether or not the cigarettes | 18 |
| sold in the delivery sale
bore a tax stamp evidencing | 19 |
| payment of the tax under Section 2 of the Cigarette Tax | 20 |
| Act (35 ILCS 130/2). | 21 |
| (b) Each person engaged in business within this State who | 22 |
| makes an out-of-state sale
shall, for each individual sale, | 23 |
| submit to the appropriate tax official of the state in which | 24 |
| the consumer is located the information required in subsection | 25 |
| (a). | 26 |
| (c) Any person that satisfies the requirements of 15 U.S.C. |
|
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| Section 376 shall be deemed to
satisfy the requirements of | 2 |
| subsections (a) and (b). | 3 |
| (d) The Department is authorized to disclose to the | 4 |
| Attorney General any information
received under this title and | 5 |
| requested by the Attorney General. The Department and the | 6 |
| Attorney General shall share with each other the information | 7 |
| received under this title and may share the information with | 8 |
| other federal, State, or local agencies for purposes of | 9 |
| enforcement of this title or the laws of the Federal government | 10 |
| or of other States. | 11 |
| (e) This Section shall not be construed to impose liability | 12 |
| upon any delivery service, or
officers or employees thereof, | 13 |
| when acting within the scope of business of the delivery | 14 |
| service. | 15 |
| (720 ILCS 678/9 new)
| 16 |
| Sec. 9. Statements for delivery sales. | 17 |
| (a) Each person who makes a delivery sale shall collect and | 18 |
| remit to the Department all excise taxes imposed by this State | 19 |
| with respect to such delivery sale and maintain evidence of | 20 |
| such payment unless the person is located outside the State and | 21 |
| includes a statement on the outside of the shipping package | 22 |
| stating: "Illinois law requires the payment of state taxes on | 23 |
| this shipment of cigarettes. You are legally responsible for | 24 |
| all applicable unpaid state taxes on these cigarettes." | 25 |
| (b) A statement meets the requirements of subsection (a) if |
|
|
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| 1 |
| the statement is: | 2 |
| (1) clear and conspicuous; | 3 |
| (2) contained in a printed box set apart from the | 4 |
| shipping label and other markings
contained on the shipping | 5 |
| package; | 6 |
| (3) printed in bold, capital letters; | 7 |
| (4) printed with a degree of color contrast between the | 8 |
| background and the printed
statement that is no less than | 9 |
| the color contrast between the background and the largest | 10 |
| text used on the shipping label; and | 11 |
| (5) located on the same side of the shipping package as | 12 |
| the shipping label. | 13 |
| (720 ILCS 678/10)
| 14 |
| Sec. 10. Violation. | 15 |
| (a) A person who violates subsection (a), (b), or (c) of | 16 |
| Section 5 or Section, 6, 7, 8, or 9 is guilty of a Class A | 17 |
| misdemeanor. A second or subsequent violation of subsection | 18 |
| (a), (b), or (c) of Section 5 or Section, 6, 7, 8, or 9 is a | 19 |
| Class 4 felony.
| 20 |
| (b) The Department of Revenue shall impose a civil penalty | 21 |
| not to exceed $5,000 on any person who violates subsection (a), | 22 |
| (b), or (c) of Section 5 or Sections 6, 7, 8, or 9 . The | 23 |
| Department of Revenue shall impose a civil penalty not to | 24 |
| exceed $5,000 on any person engaged in the business of selling | 25 |
| cigarettes who ships or causes to be shipped any such |
|
|
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|
| 1 |
| cigarettes to any person in this State in violation of | 2 |
| subsection (d) of Section 5.
| 3 |
| (c) All cigarettes sold or attempted to be sold in a | 4 |
| delivery sale that does not meet the requirements of this Act | 5 |
| shall be forfeited to the State. All cigarettes forfeited to | 6 |
| this State under this Act shall be destroyed. The Department | 7 |
| may, prior to any destruction of cigarettes, permit the true | 8 |
| holder of the trademark rights in the cigarette brand to | 9 |
| inspect such contraband cigarettes, in order to assist the | 10 |
| Department in any investigation regarding such cigarettes. | 11 |
| (d) (c) Any person aggrieved by any decision of the | 12 |
| Department of Revenue may, within 60 days after notice of that | 13 |
| decision, protest in writing and request a hearing. The | 14 |
| Department of Revenue shall give notice to the person of the | 15 |
| time and place for the hearing and shall hold a hearing before | 16 |
| it issues a final administrative decision. Absent a written | 17 |
| protest within 60 days, the Department's decision shall become | 18 |
| final without any further determination made or notice given.
| 19 |
| (Source: P.A. 93-960, eff. 8-20-04.) | 20 |
| (720 ILCS 678/20 new)
| 21 |
| Sec. 20. Tip line. | 22 |
| (a) Not later than 120 days after the effective date of | 23 |
| this amendatory Act of the 95th General Assembly, the | 24 |
| Department shall establish, publicize, and maintain a | 25 |
| toll-free telephone number to receive information related to |
|
|
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| 1 |
| violations of this Act. | 2 |
| (b) The Attorney General may pay a reward of up to $5,000 | 3 |
| to any person who furnishes information leading to the | 4 |
| Department's collection of excise taxes imposed upon delivery | 5 |
| sales which otherwise would not have been collected but for the | 6 |
| information provided by the person. | 7 |
| (720 ILCS 678/25 new)
| 8 |
| Sec. 25. Construction. The requirements imposed by this Act | 9 |
| shall not apply where such application would be contrary to the | 10 |
| Constitution and laws of the United States. | 11 |
| (720 ILCS 678/30 new)
| 12 |
| Sec. 30. Severability. If any provision of this Act is for | 13 |
| any reason held to be unconstitutional or invalid, such holding | 14 |
| shall not affect the constitutionality or validity of the | 15 |
| remaining provisions of this Act, and to this end the | 16 |
| provisions of this Act are expressly declared to be severable.
| 17 |
| Section 99. Effective date. This Act takes effect upon | 18 |
| becoming law.
|
|
|
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| 1 |
|
INDEX
| 2 |
|
Statutes amended in order of appearance
|
| 3 |
| 35 ILCS 130/1 |
from Ch. 120, par. 453.1 |
| 4 |
| 35 ILCS 130/3 |
from Ch. 120, par. 453.3 |
| 5 |
| 35 ILCS 130/3-10 |
|
| 6 |
| 35 ILCS 130/3-15 new |
|
| 7 |
| 35 ILCS 130/3-20 new |
|
| 8 |
| 35 ILCS 130/4 |
from Ch. 120, par. 453.4 |
| 9 |
| 35 ILCS 130/4c new |
|
| 10 |
| 35 ILCS 130/4d new |
|
| 11 |
| 35 ILCS 130/4e new |
|
| 12 |
| 35 ILCS 130/4f new |
|
| 13 |
| 35 ILCS 130/4g new |
|
| 14 |
| 35 ILCS 130/5 |
from Ch. 120, par. 453.5 |
| 15 |
| 35 ILCS 130/6a new |
|
| 16 |
| 35 ILCS 130/11 |
from Ch. 120, par. 453.11 |
| 17 |
| 35 ILCS 130/11a new |
|
| 18 |
| 35 ILCS 130/20 |
from Ch. 120, par. 453.20 |
| 19 |
| 35 ILCS 130/21 |
from Ch. 120, par. 453.21 |
| 20 |
| 35 ILCS 130/9c rep. |
|
| 21 |
| 35 ILCS 130/28 rep. |
|
| 22 |
| 720 ILCS 678/2 new |
|
| 23 |
| 720 ILCS 678/5 |
|
| 24 |
| 720 ILCS 678/6 new |
|
| 25 |
| 720 ILCS 678/7 new |
|
|
|
|
|
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| 1 |
| 720 ILCS 678/8 new |
|
| 2 |
| 720 ILCS 678/9 new |
|
| 3 |
| 720 ILCS 678/10 |
|
| 4 |
| 720 ILCS 678/20 new |
|
| 5 |
| 720 ILCS 678/25 new |
|
| 6 |
| 720 ILCS 678/30 new |
|
| |
|