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

SB0044ham008 96TH GENERAL ASSEMBLY

Rep. Barbara Flynn Currie

Filed: 1/11/2011

 

 


 

 


 
09600SB0044ham008LRB096 03720 HLH 44960 a

1
AMENDMENT TO SENATE BILL 44

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

 

 

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

 

 

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1amendatory Act of 1989, in addition to any other tax imposed by
2this Act, a tax is imposed upon any person engaged in business
3as a retailer of cigarettes at the rate of 5 mills per
4cigarette sold or otherwise disposed of in the course of such
5business in this State. On and after the effective date of this
6amendatory Act of 1993, in addition to any other tax imposed by
7this Act, a tax is imposed upon any person engaged in business
8as a retailer of cigarettes at the rate of 7 mills per
9cigarette sold or otherwise disposed of in the course of such
10business in this State. On and after December 15, 1997, in
11addition to any other tax imposed by this Act, a tax is imposed
12upon any person engaged in business as a retailer of cigarettes
13at the rate of 7 mills per cigarette sold or otherwise disposed
14of in the course of such business of this State. All of the
15moneys received by the Department of Revenue pursuant to this
16Act and the Cigarette Use Tax Act from the additional taxes
17imposed by this amendatory Act of 1997, shall be paid each
18month into the Common School Fund. On and after July 1, 2002,
19in addition to any other tax imposed by this Act, a tax is
20imposed upon any person engaged in business as a retailer of
21cigarettes at the rate of 20.0 mills per cigarette sold or
22otherwise disposed of in the course of such business in this
23State. Beginning on March 1, 2011, in addition to any other tax
24imposed by this Act, a tax is imposed upon any person engaged
25in business as a retailer of cigarettes at the rate of 38 mills
26per cigarette sold or otherwise disposed of in the course of

 

 

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1such business in this State. Beginning on March 1, 2012, in
2addition to any other tax imposed by this Act, a tax is imposed
3upon any person engaged in business as a retailer of cigarettes
4at the rate of 12.5 mills per cigarette sold or otherwise
5disposed of in the course of such business in this State. Of
6the moneys received by the Department of Revenue under this Act
7and the Cigarette Use Tax Act from the additional taxes imposed
8by this amendatory Act of the 96th General Assembly (i) an
9amount equal to 0.5 mills per cigarette sold or otherwise
10disposed of shall be paid each month into the Long-Term Care
11Provider Fund and (ii) the balance shall be paid each month
12into the Fund for the Advancement of Education, a special fund
13in the State treasury. The payment of such taxes shall be
14evidenced by a stamp affixed to each original package of
15cigarettes, or an authorized substitute for such stamp
16imprinted on each original package of such cigarettes
17underneath the sealed transparent outside wrapper of such
18original package, as hereinafter provided. However, such taxes
19are not imposed upon any activity in such business in
20interstate commerce or otherwise, which activity may not under
21the Constitution and statutes of the United States be made the
22subject of taxation by this State.
23    Beginning on the effective date of this amendatory Act of
24the 92nd General Assembly and through June 30, 2006, all of the
25moneys received by the Department of Revenue pursuant to this
26Act and the Cigarette Use Tax Act, other than the moneys that

 

 

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

 

 

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1General Revenue Fund and Common School Fund by that same excess
2amount.
3    Beginning on July 1, 2006, all of the moneys received by
4the Department of Revenue pursuant to this Act and the
5Cigarette Use Tax Act, other than the moneys that are dedicated
6to the Common School Fund and, beginning on the effective date
7of this amendatory Act of the 96th General Assembly, other than
8the moneys from the additional taxes imposed by this amendatory
9Act of the 96th General Assembly that must be paid each month
10into the Long-Term Care Provider Fund and the Fund for the
11Advancement of Education, shall be distributed each month as
12follows: first, there shall be paid into the General Revenue
13Fund an amount that, when added to the amount paid into the
14Common School Fund for that month, equals $29,200,000; then,
15from the moneys remaining, if any amounts required to be paid
16into the General Revenue Fund in previous months remain unpaid,
17those amounts shall be paid into the General Revenue Fund; then
18from the moneys remaining, $5,000,000 per month shall be paid
19into the School Infrastructure Fund; then, if any amounts
20required to be paid into the School Infrastructure Fund in
21previous months remain unpaid, those amounts shall be paid into
22the School Infrastructure Fund; then the moneys remaining, if
23any, shall be paid into the Long-Term Care Provider Fund.
24    When any tax imposed herein terminates or has terminated,
25distributors who have bought stamps while such tax was in
26effect and who therefore paid such tax, but who can show, to

 

 

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1the Department's satisfaction, that they sold the cigarettes to
2which they affixed such stamps after such tax had terminated
3and did not recover the tax or its equivalent from purchasers,
4shall be allowed by the Department to take credit for such
5absorbed tax against subsequent tax stamp purchases from the
6Department by such distributor.
7    The impact of the tax levied by this Act is imposed upon
8the retailer and shall be prepaid or pre-collected by the
9distributor for the purpose of convenience and facility only,
10and the amount of the tax shall be added to the price of the
11cigarettes sold by such distributor. Collection of the tax
12shall be evidenced by a stamp or stamps affixed to each
13original package of cigarettes, as hereinafter provided.
14    Each distributor shall collect the tax from the retailer at
15or before the time of the sale, shall affix the stamps as
16hereinafter required, and shall remit the tax collected from
17retailers to the Department, as hereinafter provided. Any
18distributor who fails to properly collect and pay the tax
19imposed by this Act shall be liable for the tax. Any
20distributor having cigarettes to which stamps have been affixed
21in his possession for sale on the effective date of this
22amendatory Act of 1989 shall not be required to pay the
23additional tax imposed by this amendatory Act of 1989 on such
24stamped cigarettes. Any distributor having cigarettes to which
25stamps have been affixed in his or her possession for sale at
2612:01 a.m. on the effective date of this amendatory Act of

 

 

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11993, is required to pay the additional tax imposed by this
2amendatory Act of 1993 on such stamped cigarettes. This
3payment, less the discount provided in subsection (b), shall be
4due when the distributor first makes a purchase of cigarette
5tax stamps after the effective date of this amendatory Act of
61993, or on the first due date of a return under this Act after
7the effective date of this amendatory Act of 1993, whichever
8occurs first. Any distributor having cigarettes to which stamps
9have been affixed in his possession for sale on December 15,
101997 shall not be required to pay the additional tax imposed by
11this amendatory Act of 1997 on such stamped cigarettes.
12    Any distributor having cigarettes to which stamps have been
13affixed in his or her possession for sale on July 1, 2002 shall
14not be required to pay the additional tax imposed by this
15amendatory Act of the 92nd General Assembly on those stamped
16cigarettes. Any retailer having cigarettes in his or her
17possession on March 1, 2011 to which tax stamps have been
18affixed is not required to pay the additional tax that begins
19on March 1, 2011 imposed by this amendatory Act of the 96th
20General Assembly on those stamped cigarettes. Any distributor
21having cigarettes in his or her possession on March 1, 2011 to
22which tax stamps have been affixed is required to pay the
23additional tax that begins on March 1, 2011 imposed by this
24amendatory Act of the 96th General Assembly to the extent the
25calendar year 2011 average monthly volume of cigarette stamps
26in the distributor's possession exceeds the average monthly

 

 

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1volume of cigarette stamps purchased by the distributor in
2calendar year 2010. This payment, less the discount provided in
3subsection (b), is due when the distributor first makes a
4purchase of cigarette stamps on or after March 1, 2011 or on
5the first due date of a return under this Act occurring on or
6after March 1, 2011, whichever occurs first. Any retailer
7having cigarettes in his or her possession on March 1, 2012 to
8which tax stamps have been affixed is not required to pay the
9additional tax that begins on March 1, 2012 imposed by this
10amendatory Act of the 96th General Assembly on those stamped
11cigarettes. Any distributor having cigarettes in his or her
12possession on March 1, 2012 to which tax stamps have been
13affixed is required to pay the additional tax that begins on
14March 1, 2012 imposed by this amendatory Act of the 96th
15General Assembly to the extent the calendar year 2012 average
16monthly volume of cigarette stamps in the distributor's
17possession exceeds the average monthly volume of cigarette
18stamps purchased by the distributor in calendar year 2011. This
19payment, less the discount provided in subsection (b), is due
20when the distributor first makes a purchase of cigarette stamps
21on or after March 1, 2012 or on the first due date of a return
22under this Act occurring on or after March 1, 2012, whichever
23occurs first.
24    Distributors making sales of cigarettes to secondary
25distributors shall add the amount of the tax to the price of
26the cigarettes sold by the distributors. Secondary

 

 

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1distributors making sales of cigarettes to retailers shall
2include the amount of the tax in the price of the cigarettes
3sold to retailers. The amount of tax shall not be less than the
4amount of taxes imposed by the State and all local
5jurisdictions. The amount of local taxes shall be calculated
6based on the location of the retailer's place of business shown
7on the retailer's certificate of registration or
8sub-registration issued to the retailer pursuant to Section 2a
9of the Retailers' Occupation Tax Act. The original packages of
10cigarettes sold to the retailer shall bear all the required
11stamps, or other indicia, for the taxes included in the price
12of cigarettes.
13    The amount of the Cigarette Tax imposed by this Act shall
14be separately stated, apart from the price of the goods, by
15distributors, secondary distributors, and retailers, in all
16bills and sales invoices.
17    (b) The distributor shall be required to collect the taxes
18provided under paragraph (a) hereof, and, to cover the costs of
19such collection, shall be allowed a discount during any year
20commencing July 1st and ending the following June 30th in
21accordance with the schedule set out hereinbelow, which
22discount shall be allowed at the time of purchase of the stamps
23when purchase is required by this Act, or at the time when the
24tax is remitted to the Department without the purchase of
25stamps from the Department when that method of paying the tax
26is required or authorized by this Act. Prior to December 1,

 

 

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11985, a discount equal to 1 2/3% of the amount of the tax up to
2and including the first $700,000 paid hereunder by such
3distributor to the Department during any such year; 1 1/3% of
4the next $700,000 of tax or any part thereof, paid hereunder by
5such distributor to the Department during any such year; 1% of
6the next $700,000 of tax, or any part thereof, paid hereunder
7by such distributor to the Department during any such year, and
82/3 of 1% of the amount of any additional tax paid hereunder by
9such distributor to the Department during any such year shall
10apply. On and after December 1, 1985, a discount equal to 1.75%
11of the amount of the tax payable under this Act up to and
12including the first $3,000,000 paid hereunder by such
13distributor to the Department during any such year and 1.5% of
14the amount of any additional tax paid hereunder by such
15distributor to the Department during any such year shall apply.
16    Two or more distributors that use a common means of
17affixing revenue tax stamps or that are owned or controlled by
18the same interests shall be treated as a single distributor for
19the purpose of computing the discount.
20    (c) The taxes herein imposed are in addition to all other
21occupation or privilege taxes imposed by the State of Illinois,
22or by any political subdivision thereof, or by any municipal
23corporation.
24(Source: P.A. 96-1027, eff. 7-12-10.)
 
25    (35 ILCS 130/3)  (from Ch. 120, par. 453.3)

 

 

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

 

 

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

 

 

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1address of the consignor or seller, the true name and address
2of the consignee or purchaser, and the quantity by brand style
3of the cigarettes so transported, provided that this Section
4shall not be construed as to impose any requirement or
5liability upon any common or contract carrier.
6    The Department, or any person authorized by the Department,
7shall sell such stamps only to persons holding valid licenses
8as distributors under this Act. On and after July 1, 2003,
9payment for such stamps must be made by means of electronic
10funds transfer. The Department may refuse to sell stamps to any
11person who does not comply with the provisions of this Act.
12Beginning on the effective date of this amendatory Act of the
1392nd General Assembly and through June 30, 2002, persons
14holding valid licenses as distributors may purchase cigarette
15tax stamps up to an amount equal to 115% of the distributor's
16average monthly cigarette tax stamp purchases over the 12
17calendar months prior to the effective date of this amendatory
18Act of the 92nd General Assembly.
19    Prior to December 1, 1985, the Department shall allow a
20distributor 21 days in which to make final payment of the
21amount to be paid for such stamps, by allowing the distributor
22to make payment for the stamps at the time of purchasing them
23with a draft which shall be in such form as the Department
24prescribes, and which shall be payable within 21 days
25thereafter: Provided that such distributor has filed with the
26Department, and has received the Department's approval of, a

 

 

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1bond, which is in addition to the bond required under Section 4
2of this Act, payable to the Department in an amount equal to
380% of such distributor's average monthly tax liability to the
4Department under this Act during the preceding calendar year or
5$500,000, whichever is less. The Bond shall be joint and
6several and shall be in the form of a surety company bond in
7such form as the Department prescribes, or it may be in the
8form of a bank certificate of deposit or bank letter of credit.
9The bond shall be conditioned upon the distributor's payment of
10amount of any 21-day draft which the Department accepts from
11that distributor for the delivery of stamps to that distributor
12under this Act. The distributor's failure to pay any such
13draft, when due, shall also make such distributor automatically
14liable to the Department for a penalty equal to 25% of the
15amount of such draft.
16    On and after December 1, 1985 and until July 1, 2003, the
17Department shall allow a distributor 30 days in which to make
18final payment of the amount to be paid for such stamps, by
19allowing the distributor to make payment for the stamps at the
20time of purchasing them with a draft which shall be in such
21form as the Department prescribes, and which shall be payable
22within 30 days thereafter, and beginning on January 1, 2003 and
23thereafter, the draft shall be payable by means of electronic
24funds transfer: Provided that such distributor has filed with
25the Department, and has received the Department's approval of,
26a bond, which is in addition to the bond required under Section

 

 

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14 of this Act, payable to the Department in an amount equal to
2150% of such distributor's average monthly tax liability to the
3Department under this Act during the preceding calendar year or
4$750,000, whichever is less, except that as to bonds filed on
5or after January 1, 1987, such additional bond shall be in an
6amount equal to 100% of such distributor's average monthly tax
7liability under this Act during the preceding calendar year or
8$750,000, whichever is less. The bond shall be joint and
9several and shall be in the form of a surety company bond in
10such form as the Department prescribes, or it may be in the
11form of a bank certificate of deposit or bank letter of credit.
12The bond shall be conditioned upon the distributor's payment of
13the amount of any 30-day draft which the Department accepts
14from that distributor for the delivery of stamps to that
15distributor under this Act. The distributor's failure to pay
16any such draft, when due, shall also make such distributor
17automatically liable to the Department for a penalty equal to
1825% of the amount of such draft.
19    Beginning on the effective date of this amendatory Act of
20the 96th General Assembly, the Department shall allow a
21distributor 10 days in which to make final payment of the
22amount to be paid for such stamps, by allowing the distributor
23to make payment for the stamps at the time of purchasing them
24with a draft, which shall be payable by means of electronic
25funds transfer and in such form as the Department prescribes,
26and which shall be payable within 10 days thereafter, provided

 

 

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1that such distributor has filed with the Department, and has
2received the Department's approval of, a bond, which is in
3addition to the bond required under Section 4 of this Act,
4payable to the Department in an amount equal to 100% of that
5distributor's average monthly tax liability to the Department
6under this Act during the preceding calendar year or $750,000,
7whichever is less. The bond shall be joint and several and
8shall be in the form of a surety company bond in such form as
9the Department prescribes, or it may be in the form of a bank
10certificate of deposit or bank letter of credit. The bond shall
11be conditioned upon the distributor's payment of the amount of
12any 10-day draft which the Department accepts from that
13distributor for the delivery of stamps to that distributor
14under this Act. The distributor's failure to pay any such
15draft, when due, shall also make such distributor automatically
16liable to the Department for a penalty equal to 25% of the
17amount of such draft.
18    Every prior continuous compliance taxpayer shall be exempt
19from all requirements under this Section concerning the
20furnishing of such bond, as defined in this Section, as a
21condition precedent to his being authorized to engage in the
22business licensed under this Act. This exemption shall continue
23for each such taxpayer until such time as he may be determined
24by the Department to be delinquent in the filing of any
25returns, or is determined by the Department (either through the
26Department's issuance of a final assessment which has become

 

 

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1final under the Act, or by the taxpayer's filing of a return
2which admits tax to be due that is not paid) to be delinquent
3or deficient in the paying of any tax under this Act, at which
4time that taxpayer shall become subject to the bond
5requirements of this Section and, as a condition of being
6allowed to continue to engage in the business licensed under
7this Act, shall be required to furnish bond to the Department
8in such form as provided in this Section. Such taxpayer shall
9furnish such bond for a period of 2 years, after which, if the
10taxpayer has not been delinquent in the filing of any returns,
11or delinquent or deficient in the paying of any tax under this
12Act, the Department may reinstate such person as a prior
13continuance compliance taxpayer. Any taxpayer who fails to pay
14an admitted or established liability under this Act may also be
15required to post bond or other acceptable security with the
16Department guaranteeing the payment of such admitted or
17established liability.
18    Any person aggrieved by any decision of the Department
19under this Section may, within the time allowed by law, protest
20and request a hearing, whereupon the Department shall give
21notice and shall hold a hearing in conformity with the
22provisions of this Act and then issue its final administrative
23decision in the matter to such person. In the absence of such a
24protest filed within the time allowed by law, the Department's
25decision shall become final without any further determination
26being made or notice given.

 

 

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1    The Department shall discharge any surety and shall release
2and return any bond or security deposited, assigned, pledged,
3or otherwise provided to it by a taxpayer under this Section
4within 30 days after:
5    (1) Such taxpayer becomes a prior continuous compliance
6taxpayer; or
7    (2) Such taxpayer has ceased to collect receipts on which
8he is required to remit tax to the Department, has filed a
9final tax return, and has paid to the Department an amount
10sufficient to discharge his remaining tax liability as
11determined by the Department under this Act. The Department
12shall make a final determination of the taxpayer's outstanding
13tax liability as expeditiously as possible after his final tax
14return has been filed. If the Department cannot make such final
15determination within 45 days after receiving the final tax
16return, within such period it shall so notify the taxpayer,
17stating its reasons therefor.
18    The Department may authorize distributors to affix revenue
19tax stamps by imprinting tax meter stamps upon original
20packages of cigarettes. The Department shall adopt rules and
21regulations relating to the imprinting of such tax meter stamps
22as will result in payment of the proper taxes as herein
23imposed. No distributor may affix revenue tax stamps to
24original packages of cigarettes by imprinting tax meter stamps
25thereon unless such distributor has first obtained permission
26from the Department to employ this method of affixation. The

 

 

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1Department shall regulate the use of tax meters and may, to
2assure the proper collection of the taxes imposed by this Act,
3revoke or suspend the privilege, theretofore granted by the
4Department to any distributor, to imprint tax meter stamps upon
5original packages of cigarettes.
6    Illinois cigarette manufacturers who place their
7cigarettes in original packages which are contained inside a
8sealed transparent wrapper, and similar out-of-State cigarette
9manufacturers who elect to qualify and are accepted by the
10Department as distributors under Section 4b(a) of this Act,
11shall pay the taxes imposed by this Act by remitting the amount
12thereof to the Department by the 5th day of each month covering
13cigarettes shipped or otherwise delivered in Illinois to
14purchasers during the preceding calendar month. Such
15manufacturers of cigarettes in original packages which are
16contained inside a sealed transparent wrapper, before
17delivering such cigarettes or causing such cigarettes to be
18delivered in this State to purchasers, shall evidence their
19obligation to remit the taxes due with respect to such
20cigarettes by imprinting language to be prescribed by the
21Department on each original package of such cigarettes
22underneath the sealed transparent outside wrapper of such
23original package, in such place thereon and in such manner as
24the Department may designate. Such imprinted language shall
25acknowledge the manufacturer's payment of or liability for the
26tax imposed by this Act with respect to the distribution of

 

 

09600SB0044ham008- 21 -LRB096 03720 HLH 44960 a

1such cigarettes.
2    A distributor shall not affix, or cause to be affixed, any
3stamp or imprint to a package of cigarettes, as provided for in
4this Section, if the tobacco product manufacturer, as defined
5in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
6that made or sold the cigarettes has failed to become a
7participating manufacturer, as defined in subdivision (a)(1)
8of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
9or has failed to create a qualified escrow fund for any
10cigarettes manufactured by the tobacco product manufacturer
11and sold in this State or otherwise failed to bring itself into
12compliance with subdivision (a)(2) of Section 15 of the Tobacco
13Product Manufacturers' Escrow Act.
14(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;
1596-1027, eff. 7-12-10.)
 
16    Section 15. The Cigarette Use Tax Act is amended by
17changing Sections 2, 3, and 12 as follows:
 
18    (35 ILCS 135/2)  (from Ch. 120, par. 453.32)
19    Sec. 2. A tax is imposed upon the privilege of using
20cigarettes in this State, at the rate of 6 mills per cigarette
21so used. On and after December 1, 1985, in addition to any
22other tax imposed by this Act, a tax is imposed upon the
23privilege of using cigarettes in this State at a rate of 4
24mills per cigarette so used. On and after the effective date of

 

 

09600SB0044ham008- 22 -LRB096 03720 HLH 44960 a

1this amendatory Act of 1989, in addition to any other tax
2imposed by this Act, a tax is imposed upon the privilege of
3using cigarettes in this State at the rate of 5 mills per
4cigarette so used. On and after the effective date of this
5amendatory Act of 1993, in addition to any other tax imposed by
6this Act, a tax is imposed upon the privilege of using
7cigarettes in this State at a rate of 7 mills per cigarette so
8used. On and after December 15, 1997, in addition to any other
9tax imposed by this Act, a tax is imposed upon the privilege of
10using cigarettes in this State at a rate of 7 mills per
11cigarette so used. On and after July 1, 2002, in addition to
12any other tax imposed by this Act, a tax is imposed upon the
13privilege of using cigarettes in this State at a rate of 20.0
14mills per cigarette so used. Beginning on March 1, 2011, in
15addition to any other tax imposed by this Act, a tax is imposed
16upon the privilege of using cigarettes in this State at a rate
17of 38 mills per cigarette so used. Beginning on March 1, 2012,
18in addition to any other tax imposed by this Act, a tax is
19imposed upon the privilege of using cigarettes in this State at
20a rate of 12.5 mills per cigarette so used. The taxes herein
21imposed shall be in addition to all other occupation or
22privilege taxes imposed by the State of Illinois or by any
23political subdivision thereof or by any municipal corporation.
24    When any tax imposed herein terminates or has terminated,
25distributors who have bought stamps while such tax was in
26effect and who therefore paid such tax, but who can show, to

 

 

09600SB0044ham008- 23 -LRB096 03720 HLH 44960 a

1the Department's satisfaction, that they sold the cigarettes to
2which they affixed such stamps after such tax had terminated
3and did not recover the tax or its equivalent from purchasers,
4shall be allowed by the Department to take credit for such
5absorbed tax against subsequent tax stamp purchases from the
6Department by such distributors.
7    When the word "tax" is used in this Act, it shall include
8any tax or tax rate imposed by this Act and shall mean the
9singular of "tax" or the plural "taxes" as the context may
10require.
11    Any distributor having cigarettes to which stamps have been
12affixed in his possession for sale on the effective date of
13this amendatory Act of 1989 shall not be required to pay the
14additional tax imposed by this amendatory Act of 1989 on such
15stamped cigarettes. Any distributor having cigarettes to which
16stamps have been affixed in his or her possession for sale at
1712:01 a.m. on the effective date of this amendatory Act of
181993, is required to pay the additional tax imposed by this
19amendatory Act of 1993 on such stamped cigarettes. This payment
20shall be due when the distributor first makes a purchase of
21cigarette tax stamps after the effective date of this
22amendatory Act of 1993, or on the first due date of a return
23under this Act after the effective date of this amendatory Act
24of 1993, whichever occurs first. Once a distributor tenders
25payment of the additional tax to the Department, the
26distributor may purchase stamps from the Department. Any

 

 

09600SB0044ham008- 24 -LRB096 03720 HLH 44960 a

1distributor having cigarettes to which stamps have been affixed
2in his possession for sale on December 15, 1997 shall not be
3required to pay the additional tax imposed by this amendatory
4Act of 1997 on such stamped cigarettes.
5    Any distributor having cigarettes to which stamps have been
6affixed in his or her possession for sale on July 1, 2002 shall
7not be required to pay the additional tax imposed by this
8amendatory Act of the 92nd General Assembly on those stamped
9cigarettes. Any retailer having cigarettes in his or her
10possession on March 1, 2011 to which tax stamps have been
11affixed is not required to pay the additional tax that begins
12on March 1, 2011 imposed by this amendatory Act of the 96th
13General Assembly on those stamped cigarettes. Any distributor
14having cigarettes in his or her possession on March 1, 2011 to
15which tax stamps have been affixed is required to pay the
16additional tax that begins on March 1, 2011 imposed by this
17amendatory Act of the 96th General Assembly to the extent the
18calendar year 2011 average monthly volume of cigarette stamps
19in the distributor's possession exceeds the average monthly
20volume of cigarette stamps purchased by the distributor in
21calendar year 2010. This payment, less the discount provided in
22Section 3, is due when the distributor first makes a purchase
23of cigarette stamps on or after March 1, 2011 or on the first
24due date of a return under this Act occurring on or after March
251, 2011, whichever occurs first. Any retailer having cigarettes
26in his or her possession on March 1, 2012 to which tax stamps

 

 

09600SB0044ham008- 25 -LRB096 03720 HLH 44960 a

1have been affixed is not required to pay the additional tax
2that begins on March 1, 2012 imposed by this amendatory Act of
3the 96th General Assembly on those stamped cigarettes. Any
4distributor having cigarettes in his or her possession on March
51, 2012 to which tax stamps have been affixed is required to
6pay the additional tax that begins on March 1, 2012 imposed by
7this amendatory Act of the 96th General Assembly to the extent
8the calendar year 2012 average monthly volume of cigarette
9stamps in the distributor's possession exceeds the average
10monthly volume of cigarette stamps purchased by the distributor
11in calendar year 2011. This payment, less the discount provided
12in Section 3, is due when the distributor first makes a
13purchase of cigarette stamps on or after March 1, 2012 or on
14the first due date of a return under this Act occurring on or
15after March 1, 2012, whichever occurs first.
16(Source: P.A. 92-536, eff. 6-6-02.)
 
17    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
18    Sec. 3. Stamp payment. The tax hereby imposed shall be
19collected by a distributor maintaining a place of business in
20this State or a distributor authorized by the Department
21pursuant to Section 7 hereof to collect the tax, and the amount
22of the tax shall be added to the price of the cigarettes sold
23by such distributor. Collection of the tax shall be evidenced
24by a stamp or stamps affixed to each original package of
25cigarettes or by an authorized substitute for such stamp

 

 

09600SB0044ham008- 26 -LRB096 03720 HLH 44960 a

1imprinted on each original package of such cigarettes
2underneath the sealed transparent outside wrapper of such
3original package, except as hereinafter provided. Each
4distributor who is required or authorized to collect the tax
5herein imposed, before delivering or causing to be delivered
6any original packages of cigarettes in this State to any
7purchaser, shall firmly affix a proper stamp or stamps to each
8such package, or (in the case of manufacturers of cigarettes in
9original packages which are contained inside a sealed
10transparent wrapper) shall imprint the required language on the
11original package of cigarettes beneath such outside wrapper as
12hereinafter provided. Such stamp or stamps need not be affixed
13to the original package of any cigarettes with respect to which
14the distributor is required to affix a like stamp or stamps by
15virtue of the Cigarette Tax Act, however, and no tax imprint
16need be placed underneath the sealed transparent wrapper of an
17original package of cigarettes with respect to which the
18distributor is required or authorized to employ a like tax
19imprint by virtue of the Cigarette Tax Act.
20    No stamp or imprint may be affixed to, or made upon, any
21package of cigarettes unless that package complies with all
22requirements of the federal Cigarette Labeling and Advertising
23Act, 15 U.S.C. 1331 and following, for the placement of labels,
24warnings, or any other information upon a package of cigarettes
25that is sold within the United States. Under the authority of
26Section 6, the Department shall revoke the license of any

 

 

09600SB0044ham008- 27 -LRB096 03720 HLH 44960 a

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

 

 

09600SB0044ham008- 28 -LRB096 03720 HLH 44960 a

1packages of cigarettes to a facility where retail sales of
2cigarettes take place or to a facility where a secondary
3distributor makes sales for resale. Any licensed distributor
4that ships or otherwise causes to be delivered unstamped
5original packages of cigarettes into, within, or from this
6State shall ensure that the invoice or equivalent documentation
7and the bill of lading or freight bill for the shipment
8identifies the true name and address of the consignor or
9seller, the true name and address of the consignee or
10purchaser, and the quantity by brand style of the cigarettes so
11transported, provided that this Section shall not be construed
12as to impose any requirement or liability upon any common or
13contract carrier.
14    Distributors making sales of cigarettes to secondary
15distributors shall add the amount of the tax to the price of
16the cigarettes sold by the distributors. Secondary
17distributors making sales of cigarettes to retailers shall
18include the amount of the tax in the price of the cigarettes
19sold to retailers. The amount of tax shall not be less than the
20amount of taxes imposed by the State and all local
21jurisdictions. The amount of local taxes shall be calculated
22based on the location of the retailer's place of business shown
23on the retailer's certificate of registration or
24sub-registration issued to the retailer pursuant to Section 2a
25of the Retailers' Occupation Tax Act. The original packages of
26cigarettes sold by the retailer shall bear all the required

 

 

09600SB0044ham008- 29 -LRB096 03720 HLH 44960 a

1stamps, or other indicia, for the taxes included in the price
2of cigarettes.
3    Stamps, when required hereunder, shall be purchased from
4the Department, or any person authorized by the Department, by
5distributors. On and after July 1, 2003, payment for such
6stamps must be made by means of electronic funds transfer. The
7Department may refuse to sell stamps to any person who does not
8comply with the provisions of this Act. Beginning on June 6,
92002 and through June 30, 2002, persons holding valid licenses
10as distributors may purchase cigarette tax stamps up to an
11amount equal to 115% of the distributor's average monthly
12cigarette tax stamp purchases over the 12 calendar months prior
13to June 6, 2002.
14    Prior to December 1, 1985, the Department shall allow a
15distributor 21 days in which to make final payment of the
16amount to be paid for such stamps, by allowing the distributor
17to make payment for the stamps at the time of purchasing them
18with a draft which shall be in such form as the Department
19prescribes, and which shall be payable within 21 days
20thereafter: Provided that such distributor has filed with the
21Department, and has received the Department's approval of, a
22bond, which is in addition to the bond required under Section 4
23of this Act, payable to the Department in an amount equal to
2480% of such distributor's average monthly tax liability to the
25Department under this Act during the preceding calendar year or
26$500,000, whichever is less. The bond shall be joint and

 

 

09600SB0044ham008- 30 -LRB096 03720 HLH 44960 a

1several and shall be in the form of a surety company bond in
2such form as the Department prescribes, or it may be in the
3form of a bank certificate of deposit or bank letter of credit.
4The bond shall be conditioned upon the distributor's payment of
5the amount of any 21-day draft which the Department accepts
6from that distributor for the delivery of stamps to that
7distributor under this Act. The distributor's failure to pay
8any such draft, when due, shall also make such distributor
9automatically liable to the Department for a penalty equal to
1025% of the amount of such draft.
11    On and after December 1, 1985 and until July 1, 2003, the
12Department shall allow a distributor 30 days in which to make
13final payment of the amount to be paid for such stamps, by
14allowing the distributor to make payment for the stamps at the
15time of purchasing them with a draft which shall be in such
16form as the Department prescribes, and which shall be payable
17within 30 days thereafter, and beginning on January 1, 2003 and
18thereafter, the draft shall be payable by means of electronic
19funds transfer: Provided that such distributor has filed with
20the Department, and has received the Department's approval of,
21a bond, which is in addition to the bond required under Section
224 of this Act, payable to the Department in an amount equal to
23150% of such distributor's average monthly tax liability to the
24Department under this Act during the preceding calendar year or
25$750,000, whichever is less, except that as to bonds filed on
26or after January 1, 1987, such additional bond shall be in an

 

 

09600SB0044ham008- 31 -LRB096 03720 HLH 44960 a

1amount equal to 100% of such distributor's average monthly tax
2liability under this Act during the preceding calendar year or
3$750,000, whichever is less. The bond shall be joint and
4several and shall be in the form of a surety company bond in
5such form as the Department prescribes, or it may be in the
6form of a bank certificate of deposit or bank letter of credit.
7The bond shall be conditioned upon the distributor's payment of
8the amount of any 30-day draft which the Department accepts
9from that distributor for the delivery of stamps to that
10distributor under this Act. The distributor's failure to pay
11any such draft, when due, shall also make such distributor
12automatically liable to the Department for a penalty equal to
1325% of the amount of such draft.
14    Beginning on the effective date of this amendatory Act of
15the 96th General Assembly, the Department shall allow a
16distributor 10 days in which to make final payment of the
17amount to be paid for such stamps, by allowing the distributor
18to make payment for the stamps at the time of purchasing them
19with a draft, which shall be payable by means of electronic
20funds transfer and in such form as the Department prescribes,
21and which shall be payable within 10 days thereafter, provided
22that such distributor has filed with the Department, and has
23received the Department's approval of, a bond, which is in
24addition to the bond required under Section 4 of this Act,
25payable to the Department in an amount equal to 100% of that
26distributor's average monthly tax liability to the Department

 

 

09600SB0044ham008- 32 -LRB096 03720 HLH 44960 a

1under this Act during the preceding calendar year or $750,000,
2whichever is less. The bond shall be joint and several and
3shall be in the form of a surety company bond in such form as
4the Department prescribes, or it may be in the form of a bank
5certificate of deposit or bank letter of credit. The bond shall
6be conditioned upon the distributor's payment of the amount of
7any 10-day draft which the Department accepts from that
8distributor for the delivery of stamps to that distributor
9under this Act. The distributor's failure to pay any such
10draft, when due, shall also make such distributor automatically
11liable to the Department for a penalty equal to 25% of the
12amount of such draft.
13    Every prior continuous compliance taxpayer shall be exempt
14from all requirements under this Section concerning the
15furnishing of such bond, as defined in this Section, as a
16condition precedent to his being authorized to engage in the
17business licensed under this Act. This exemption shall continue
18for each such taxpayer until such time as he may be determined
19by the Department to be delinquent in the filing of any
20returns, or is determined by the Department (either through the
21Department's issuance of a final assessment which has become
22final under the Act, or by the taxpayer's filing of a return
23which admits tax to be due that is not paid) to be delinquent
24or deficient in the paying of any tax under this Act, at which
25time that taxpayer shall become subject to the bond
26requirements of this Section and, as a condition of being

 

 

09600SB0044ham008- 33 -LRB096 03720 HLH 44960 a

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

 

 

09600SB0044ham008- 34 -LRB096 03720 HLH 44960 a

1    compliance taxpayer; or
2        (2) such taxpayer has ceased to collect receipts on
3    which he is required to remit tax to the Department, has
4    filed a final tax return, and has paid to the Department an
5    amount sufficient to discharge his remaining tax liability
6    as determined by the Department under this Act. The
7    Department shall make a final determination of the
8    taxpayer's outstanding tax liability as expeditiously as
9    possible after his final tax return has been filed. If the
10    Department cannot make such final determination within 45
11    days after receiving the final tax return, within such
12    period it shall so notify the taxpayer, stating its reasons
13    therefor.
14    At the time of purchasing such stamps from the Department
15when purchase is required by this Act, or at the time when the
16tax which he has collected is remitted by a distributor to the
17Department without the purchase of stamps from the Department
18when that method of remitting the tax that has been collected
19is required or authorized by this Act, the distributor shall be
20allowed a discount during any year commencing July 1 and ending
21the following June 30 in accordance with the schedule set out
22hereinbelow, from the amount to be paid by him to the
23Department for such stamps, or to be paid by him to the
24Department on the basis of monthly remittances (as the case may
25be), to cover the cost, to such distributor, of collecting the
26tax herein imposed by affixing such stamps to the original

 

 

09600SB0044ham008- 35 -LRB096 03720 HLH 44960 a

1packages of cigarettes sold by such distributor or by placing
2tax imprints underneath the sealed transparent wrapper of
3original packages of cigarettes sold by such distributor (as
4the case may be): (1) Prior to December 1, 1985, a discount
5equal to 1-2/3% of the amount of the tax up to and including
6the first $700,000 paid hereunder by such distributor to the
7Department during any such year; 1-1/3% of the next $700,000 of
8tax or any part thereof, paid hereunder by such distributor to
9the Department during any such year; 1% of the next $700,000 of
10tax, or any part thereof, paid hereunder by such distributor to
11the Department during any such year; and 2/3 of 1% of the
12amount of any additional tax paid hereunder by such distributor
13to the Department during any such year or (2) On and after
14December 1, 1985, a discount equal to 1.75% of the amount of
15the tax payable under this Act up to and including the first
16$3,000,000 paid hereunder by such distributor to the Department
17during any such year and 1.5% of the amount of any additional
18tax paid hereunder by such distributor to the Department during
19any such year.
20    Two or more distributors that use a common means of
21affixing revenue tax stamps or that are owned or controlled by
22the same interests shall be treated as a single distributor for
23the purpose of computing the discount.
24    Cigarette manufacturers who are distributors under Section
257(a) of this Act, and who place their cigarettes in original
26packages which are contained inside a sealed transparent

 

 

09600SB0044ham008- 36 -LRB096 03720 HLH 44960 a

1wrapper, shall be required to remit the tax which they are
2required to collect under this Act to the Department by
3remitting the amount thereof to the Department by the 5th day
4of each month, covering cigarettes shipped or otherwise
5delivered to points in Illinois to purchasers during the
6preceding calendar month, but a distributor need not remit to
7the Department the tax so collected by him from purchasers
8under this Act to the extent to which such distributor is
9required to remit the tax imposed by the Cigarette Tax Act to
10the Department with respect to the same cigarettes. All taxes
11upon cigarettes under this Act are a direct tax upon the retail
12consumer and shall conclusively be presumed to be precollected
13for the purpose of convenience and facility only. Cigarette
14manufacturers that are distributors licensed under Section
157(a) of this Act and who place their cigarettes in original
16packages which are contained inside a sealed transparent
17wrapper, before delivering such cigarettes or causing such
18cigarettes to be delivered in this State to purchasers, shall
19evidence their obligation to collect and remit the tax due with
20respect to such cigarettes by imprinting language to be
21prescribed by the Department on each original package of such
22cigarettes underneath the sealed transparent outside wrapper
23of such original package, in such place thereon and in such
24manner as the Department may prescribe; provided (as stated
25hereinbefore) that this requirement does not apply when such
26distributor is required or authorized by the Cigarette Tax Act

 

 

09600SB0044ham008- 37 -LRB096 03720 HLH 44960 a

1to place the tax imprint provided for in the last paragraph of
2Section 3 of that Act underneath the sealed transparent wrapper
3of such original package of cigarettes. Such imprinted language
4shall acknowledge the manufacturer's collection and payment of
5or liability for the tax imposed by this Act with respect to
6such cigarettes.
7    The Department shall adopt the design or designs of the tax
8stamps and shall procure the printing of such stamps in such
9amounts and denominations as it deems necessary to provide for
10the affixation of the proper amount of tax stamps to each
11original package of cigarettes.
12    Where tax stamps are required, the Department may authorize
13distributors to affix revenue tax stamps by imprinting tax
14meter stamps upon original packages of cigarettes. The
15Department shall adopt rules and regulations relating to the
16imprinting of such tax meter stamps as will result in payment
17of the proper taxes as herein imposed. No distributor may affix
18revenue tax stamps to original packages of cigarettes by
19imprinting meter stamps thereon unless such distributor has
20first obtained permission from the Department to employ this
21method of affixation. The Department shall regulate the use of
22tax meters and may, to assure the proper collection of the
23taxes imposed by this Act, revoke or suspend the privilege,
24theretofore granted by the Department to any distributor, to
25imprint tax meter stamps upon original packages of cigarettes.
26    The tax hereby imposed and not paid pursuant to this

 

 

09600SB0044ham008- 38 -LRB096 03720 HLH 44960 a

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

 

 

09600SB0044ham008- 39 -LRB096 03720 HLH 44960 a

1Department the tax imposed by this Act.
2    (b) On receipt of the return and payment of the tax as
3required by paragraph (a), the Department may furnish the
4person with a suitable tax stamp to be affixed to the package
5of cigarettes upon which the tax has been paid if the
6Department determines that the cigarettes still exist.
7    (c) The return referred to in paragraph (a) shall contain
8the name and address of the person possessing the cigarettes
9involved, the location of the cigarettes and the quantity,
10brand name, place, and date of the acquisition of the
11cigarettes.
12    (d) Nothing in this Section shall permit a secondary
13distributor to purchase unstamped original packages of
14cigarettes or to purchase original packages of cigarettes from
15a person other than a licensed distributor.
16    (e) The provisions of this Section are not subject to the
17Uniform Penalty and Interest Act.
18(Source: P.A. 96-1027, eff. 7-12-10.)
 
19    Section 20. The Tobacco Products Tax Act of 1995 is amended
20by changing Sections 10-5, 10-10, and 10-30 as follows:
 
21    (35 ILCS 143/10-5)
22    Sec. 10-5. Definitions. For purposes of this Act:
23    "Business" means any trade, occupation, activity, or
24enterprise engaged in, at any location whatsoever, for the

 

 

09600SB0044ham008- 40 -LRB096 03720 HLH 44960 a

1purpose of selling tobacco products.
2    "Cigarette" has the meaning ascribed to the term in Section
31 of the Cigarette Tax Act.
4    "Correctional Industries program" means a program run by a
5State penal institution in which residents of the penal
6institution produce tobacco products for sale to persons
7incarcerated in penal institutions or resident patients of a
8State operated mental health facility.
9    "Department" means the Illinois Department of Revenue.
10    "Distributor" means any of the following:
11        (1) Any manufacturer or wholesaler in this State
12    engaged in the business of selling tobacco products who
13    sells, exchanges, or distributes tobacco products to
14    retailers or consumers in this State.
15        (2) Any manufacturer or wholesaler engaged in the
16    business of selling tobacco products from without this
17    State who sells, exchanges, distributes, ships, or
18    transports tobacco products to retailers or consumers
19    located in this State, so long as that manufacturer or
20    wholesaler has or maintains within this State, directly or
21    by subsidiary, an office, sales house, or other place of
22    business, or any agent or other representative operating
23    within this State under the authority of the person or
24    subsidiary, irrespective of whether the place of business
25    or agent or other representative is located here
26    permanently or temporarily.

 

 

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1        (3) Any retailer who receives tobacco products on which
2    the tax has not been or will not be paid by another
3    distributor.
4    "Distributor" does not include any person, wherever
5resident or located, who makes, manufactures, or fabricates
6tobacco products as part of a Correctional Industries program
7for sale to residents incarcerated in penal institutions or
8resident patients of a State operated mental health facility.
9    "Manufacturer" means any person, wherever resident or
10located, who manufactures and sells tobacco products, except a
11person who makes, manufactures, or fabricates tobacco products
12as a part of a Correctional Industries program for sale to
13persons incarcerated in penal institutions or resident
14patients of a State operated mental health facility.
15    "Moist snuff" means any finely cut, ground, or powdered
16tobacco that is not intended to be smoked, but shall not
17include any finely cut, ground, or powdered tobacco that is
18intended to be placed in the nasal cavity.
19    "Person" means any natural individual, firm, partnership,
20association, joint stock company, joint venture, limited
21liability company, or public or private corporation, however
22formed, or a receiver, executor, administrator, trustee,
23conservator, or other representative appointed by order of any
24court.
25    "Place of business" means and includes any place where
26tobacco products are sold or where tobacco products are

 

 

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1manufactured, stored, or kept for the purpose of sale or
2consumption, including any vessel, vehicle, airplane, train,
3or vending machine.
4    "Retailer" means any person in this State engaged in the
5business of selling tobacco products to consumers in this
6State, regardless of quantity or number of sales.
7    "Sale" means any transfer, exchange, or barter in any
8manner or by any means whatsoever for a consideration and
9includes all sales made by persons.
10    "Tobacco products" means any cigars; cheroots; stogies;
11periques; granulated, plug cut, crimp cut, ready rubbed, and
12other smoking tobacco; snuff (including moist snuff) or snuff
13flour; cavendish; plug and twist tobacco; fine-cut and other
14chewing tobaccos; shorts; refuse scraps, clippings, cuttings,
15and sweeping of tobacco; and other kinds and forms of tobacco,
16prepared in such manner as to be suitable for chewing or
17smoking in a pipe or otherwise, or both for chewing and
18smoking; but does not include cigarettes or tobacco purchased
19for the manufacture of cigarettes by cigarette distributors and
20manufacturers defined in the Cigarette Tax Act and persons who
21make, manufacture, or fabricate cigarettes as a part of a
22Correctional Industries program for sale to residents
23incarcerated in penal institutions or resident patients of a
24State operated mental health facility.
25    "Wholesale price" means the established list price for
26which a manufacturer sells tobacco products to a distributor,

 

 

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1before the allowance of any discount, trade allowance, rebate,
2or other reduction. In the absence of such an established list
3price, the manufacturer's invoice price at which the
4manufacturer sells the tobacco product to unaffiliated
5distributors, before any discounts, trade allowances, rebates,
6or other reductions, shall be presumed to be the wholesale
7price.
8    "Wholesaler" means any person, wherever resident or
9located, engaged in the business of selling tobacco products to
10others for the purpose of resale.
11(Source: P.A. 92-231, eff. 8-2-01.)
 
12    (35 ILCS 143/10-10)
13    Sec. 10-10. Tax imposed. On the first day of the third
14month after the month in which this Act becomes law and until
15March 1, 2011, a tax is imposed on any person engaged in
16business as a distributor of tobacco products, as defined in
17Section 10-5, at the rate of 18% of the wholesale price of
18tobacco products sold or otherwise disposed of to retailers or
19consumers located in this State. Beginning on March 1, 2011, a
20tax is imposed on any person engaged in business as a
21distributor of tobacco products, as defined in Section 10-5, at
22the rate of (i) 18% of the wholesale price of tobacco products,
23other than moist snuff, sold or otherwise disposed of to
24retailers or consumers located in this State and (ii) $0.20 per
25ounce of moist snuff, and a proportionate tax at the like rate

 

 

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1on all fractional parts of an ounce, sold or otherwise disposed
2of to retailers or consumers located in this State. The tax is
3in addition to all other occupation or privilege taxes imposed
4by the State of Illinois, by any political subdivision thereof,
5or by any municipal corporation. However, the tax is not
6imposed upon any activity in that business in interstate
7commerce or otherwise, to the extent to which that activity may
8not, under the Constitution and Statutes of the United States,
9be made the subject of taxation by this State. The tax is also
10not imposed on sales made to the United States or any entity
11thereof.
12    Beginning on March 1, 2011, the tax rate imposed per ounce
13of moist snuff may not exceed 11% of the tax imposed upon a
14package of 20 cigarettes pursuant to the Cigarette Tax Act.
15    All moneys received by the Department under this Act shall
16be paid into the Long-Term Care Provider Fund of the State
17Treasury.
18(Source: P.A. 92-231, eff. 8-2-01.)
 
19    (35 ILCS 143/10-30)
20    Sec. 10-30. Returns. Every distributor shall, on or before
21the 15th day of each month, file a return with the Department
22covering the preceding calendar month. The return shall
23disclose the wholesale price for all tobacco products and the
24quantity of moist snuff sold or otherwise disposed of and other
25information that the Department may reasonably require. The

 

 

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1return shall be filed upon a form prescribed and furnished by
2the Department.
3    At the time when any return of any distributor is due to be
4filed with the Department, the distributor shall also remit to
5the Department the tax liability that the distributor has
6incurred for transactions occurring in the preceding calendar
7month.
8(Source: P.A. 89-21, eff. 6-6-95.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.".