Full Text of SB0338 98th General Assembly
SB0338enr 98TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning revenue.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Cigarette Tax Act is amended by changing | 5 | | Sections 1 and 2 as follows:
| 6 | | (35 ILCS 130/1) (from Ch. 120, par. 453.1)
| 7 | | Sec. 1. For the purposes of this Act:
| 8 | | "Brand Style" means a variety of cigarettes distinguished | 9 | | by the tobacco used, tar and nicotine content, flavoring used, | 10 | | size of the cigarette, filtration on the cigarette or | 11 | | packaging. | 12 | | Until July 1, 2012, and beginning July 1, 2013, | 13 | | "cigarette", means any
roll for smoking made wholly or in part | 14 | | of tobacco irrespective of size
or shape and whether or not | 15 | | such tobacco is flavored, adulterated or
mixed with any other | 16 | | ingredient, and the wrapper or cover of which is
made of paper | 17 | | or any other substance or material except tobacco.
| 18 | | "Cigarette", beginning on and after July 1, 2012, and | 19 | | through June 30, 2013, means any roll for smoking made wholly | 20 | | or in part of tobacco irrespective of size or shape and whether | 21 | | or not such tobacco is flavored, adulterated, or mixed with any | 22 | | other ingredient, and the wrapper or cover of which is made of | 23 | | paper. |
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| 1 | | "Cigarette", beginning on and after July 1, 2012, and | 2 | | through June 30, 2013, also shall mean: Any roll for smoking | 3 | | made wholly or in part of tobacco labeled as anything other | 4 | | than a cigarette or not bearing a label, if it meets two or | 5 | | more of the following criteria: | 6 | | (a) the product is sold in packs similar to cigarettes; | 7 | | (b) the product is available for sale in cartons of ten | 8 | | packs; | 9 | | (c) the product is sold in soft packs, hard packs, | 10 | | flip-top boxes, clam shells, or other cigarette-type | 11 | | boxes; | 12 | | (d) the product is of a length and diameter similar to | 13 | | commercially manufactured cigarettes; | 14 | | (e) the product has a cellulose acetate or other | 15 | | integrated filter; | 16 | | (f) the product is marketed or advertised to consumers | 17 | | as a cigarette or cigarette substitute; or | 18 | | (g) other evidence that the product fits within the | 19 | | definition of cigarette. | 20 | | "Contraband cigarettes" means: | 21 | | (a) cigarettes that do not bear a required tax stamp | 22 | | under this Act; | 23 | | (b) cigarettes for which any required federal taxes | 24 | | have not been paid; | 25 | | (c) cigarettes that bear a counterfeit tax stamp; | 26 | | (d) cigarettes that are manufactured, fabricated, |
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| 1 | | assembled, processed, packaged, or labeled by any person | 2 | | other than (i) the owner of the trademark rights in the | 3 | | cigarette brand or (ii) a person that is directly or | 4 | | indirectly authorized by such owner; | 5 | | (e) cigarettes imported into the United States, or | 6 | | otherwise distributed, in violation of the federal | 7 | | Imported Cigarette Compliance Act of 2000 (Title IV of | 8 | | Public Law 106-476); | 9 | | (f) cigarettes that have false manufacturing labels; | 10 | | (g) cigarettes identified in Section 3-10(a)(1) of | 11 | | this Act; | 12 | | (h) cigarettes that are improperly tax stamped, | 13 | | including cigarettes that bear a tax stamp of another state | 14 | | or taxing jurisdiction; or | 15 | | (i) cigarettes made or fabricated by a person holding a | 16 | | cigarette machine operator license under Section 1-20 of | 17 | | the Cigarette Machine Operators' Occupation Tax Act in the | 18 | | possession of manufacturers, distributors, secondary | 19 | | distributors, manufacturer representatives or other | 20 | | retailers for the purpose of resale, regardless of whether | 21 | | the tax has been paid on such cigarettes. | 22 | | "Little cigar" has the meaning ascribed to that term in the | 23 | | Tobacco Products Tax Act of 1995. | 24 | | "Person" means any natural individual, firm, partnership, | 25 | | association, joint
stock company, joint adventure, public or | 26 | | private corporation, however formed,
limited liability |
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| 1 | | company, or a receiver, executor, administrator, trustee,
| 2 | | guardian or other representative appointed by order of any | 3 | | court.
| 4 | | "Prior Continuous Compliance Taxpayer" means any person | 5 | | who is licensed
under this Act and who, having been a licensee | 6 | | for a continuous period of 5
years, is determined by the | 7 | | Department not to have been either delinquent
or deficient in | 8 | | the payment of tax liability during that period or
otherwise in | 9 | | violation of this Act. Also, any taxpayer who has, as
verified | 10 | | by the Department, continuously complied with the condition of | 11 | | his
bond or other security under provisions of this Act for a | 12 | | period of 5
consecutive years shall be considered to be a | 13 | | "Prior continuous compliance
taxpayer". In calculating the | 14 | | consecutive period of time described herein
for qualification | 15 | | as a "prior continuous compliance taxpayer", a
consecutive | 16 | | period of time of qualifying compliance immediately prior to
| 17 | | the effective date of this amendatory Act of 1987 shall be | 18 | | credited to any
licensee who became licensed on or before the | 19 | | effective date of this
amendatory Act of 1987.
| 20 | | "Department" means the Department of Revenue.
| 21 | | "Sale" means any transfer, exchange or barter in any manner | 22 | | or by any
means whatsoever for a consideration, and includes | 23 | | and means all sales
made by any person.
| 24 | | "Original Package" means the individual packet, box or | 25 | | other container
whatsoever used to contain and to convey | 26 | | cigarettes to the consumer.
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| 1 | | "Distributor" means any and each of the following:
| 2 | | (1) Any person engaged in the business of selling | 3 | | cigarettes in this
State who brings or causes to be brought | 4 | | into this State from without
this State any original | 5 | | packages of cigarettes, on which original
packages there is | 6 | | no authorized evidence underneath a sealed transparent
| 7 | | wrapper showing that the tax liability imposed by this Act | 8 | | has been paid
or assumed by the out-of-State seller of such | 9 | | cigarettes, for sale or
other disposition in the course of | 10 | | such business.
| 11 | | (2) Any person who makes, manufactures or fabricates | 12 | | cigarettes in this
State for sale in this State, except a | 13 | | person who makes, manufactures
or fabricates cigarettes as | 14 | | a part of a correctional industries program
for sale to | 15 | | residents incarcerated in penal institutions or resident | 16 | | patients
of a State-operated mental health facility.
| 17 | | (3) Any person who makes, manufactures or fabricates | 18 | | cigarettes
outside this State, which cigarettes are placed | 19 | | in original packages
contained in sealed transparent | 20 | | wrappers, for delivery or shipment into
this State, and who | 21 | | elects to qualify and is accepted by the Department
as a | 22 | | distributor under Section 4b of this Act.
| 23 | | "Place of business" shall mean and include any place where | 24 | | cigarettes
are sold or where cigarettes are manufactured, | 25 | | stored or kept for the
purpose of sale or consumption, | 26 | | including any vessel, vehicle, airplane,
train or vending |
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| 1 | | machine.
| 2 | | "Manufacturer representative" means a director, officer, | 3 | | or employee of a manufacturer who has obtained authority from | 4 | | the Department under Section 4f to maintain representatives in | 5 | | Illinois that provide or sell original packages of cigarettes | 6 | | made, manufactured, or fabricated by the manufacturer to | 7 | | retailers in compliance with Section 4f of this Act to promote | 8 | | cigarettes made, manufactured, or fabricated by the | 9 | | manufacturer. | 10 | | "Business" means any trade, occupation, activity or | 11 | | enterprise
engaged in for the purpose of selling cigarettes in | 12 | | this State.
| 13 | | "Retailer" means any person who engages in the making of | 14 | | transfers of
the ownership of, or title to, cigarettes to a | 15 | | purchaser for use or
consumption and not for resale in any | 16 | | form, for a valuable consideration. "Retailer" does not include | 17 | | a person:
| 18 | | (1) who transfers to residents incarcerated in penal | 19 | | institutions
or resident patients of a State-operated | 20 | | mental health facility ownership
of cigarettes made, | 21 | | manufactured, or fabricated as part of a correctional
| 22 | | industries program; or | 23 | | (2) who transfers cigarettes to a not-for-profit | 24 | | research institution that conducts tests concerning the | 25 | | health effects of tobacco products and who does not offer | 26 | | the cigarettes for resale.
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| 1 | | "Retailer" shall be construed to include any person who | 2 | | engages in
the making of transfers of the ownership of, or | 3 | | title to, cigarettes to
a purchaser, for use or consumption by | 4 | | any other person to whom such
purchaser may transfer the | 5 | | cigarettes without a valuable consideration,
except a person | 6 | | who transfers to residents incarcerated in penal institutions
| 7 | | or resident patients of a State-operated mental health facility | 8 | | ownership
of cigarettes made, manufactured or fabricated as | 9 | | part of a correctional
industries program.
| 10 | | "Secondary distributor" means any person engaged in the | 11 | | business of selling cigarettes who purchases stamped original | 12 | | packages of cigarettes from a licensed distributor under this | 13 | | Act or the Cigarette Use Tax Act, sells 75% or more of those | 14 | | cigarettes to retailers for resale, and maintains an | 15 | | established business where a substantial stock of cigarettes is | 16 | | available to retailers for resale. | 17 | | "Stamp" or "stamps" mean the indicia required to be affixed | 18 | | on a pack of cigarettes that evidence payment of the tax on | 19 | | cigarettes under Section 2 of this Act. | 20 | | "Related party" means any person that is associated with | 21 | | any other person because he or she: | 22 | | (a) is an officer or director of a business; or | 23 | | (b) is legally recognized as a partner in business. | 24 | | (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10; | 25 | | 97-587, eff. 8-26-11; 97-688, eff. 6-14-12.)
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| 1 | | (35 ILCS 130/2) (from Ch. 120, par. 453.2)
| 2 | | Sec. 2. Tax imposed; rate; collection, payment, and | 3 | | distribution;
discount. | 4 | | (a) A tax is imposed upon any person engaged in business as | 5 | | a
retailer of cigarettes in this State at the rate of 5 1/2 | 6 | | mills per
cigarette sold, or otherwise disposed of in the | 7 | | course of such business in
this State. In addition to any other | 8 | | tax imposed by this Act, a tax is
imposed upon any person | 9 | | engaged in business as a retailer of cigarettes in
this State | 10 | | at a rate of 1/2 mill per cigarette sold or otherwise disposed
| 11 | | of in the course of such business in this State on and after | 12 | | January 1,
1947, and shall be paid into the Metropolitan Fair | 13 | | and Exposition Authority
Reconstruction Fund or as otherwise | 14 | | provided in Section 29. On and after December 1, 1985, in | 15 | | addition to any
other tax imposed by this Act, a tax is imposed | 16 | | upon any person engaged in
business as a retailer of cigarettes | 17 | | in this State at a rate of 4 mills per
cigarette sold or | 18 | | otherwise disposed of in the course of such business in
this | 19 | | State. Of the additional tax imposed by this amendatory Act of | 20 | | 1985,
$9,000,000 of the moneys received by the Department of | 21 | | Revenue pursuant to
this Act shall be paid each month into the | 22 | | Common School Fund. On and after
the effective date of this | 23 | | amendatory Act of 1989, in addition to any other tax
imposed by | 24 | | this Act, a tax is imposed upon any person engaged in business | 25 | | as a
retailer of cigarettes at the rate of 5 mills per | 26 | | cigarette sold or
otherwise disposed of in the course of such |
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| 1 | | business in this State.
On and after the effective date of this | 2 | | amendatory Act of 1993, in addition
to any other tax imposed by | 3 | | this Act, a tax is imposed upon any person engaged
in business | 4 | | as a retailer of cigarettes at the rate of 7 mills per | 5 | | cigarette
sold or otherwise disposed of in the course of such | 6 | | business in this State.
On and after December 15, 1997, in | 7 | | addition
to any other tax imposed by this Act, a tax is imposed | 8 | | upon any person engaged
in business as a retailer of cigarettes | 9 | | at the rate of 7 mills per cigarette
sold or otherwise disposed | 10 | | of in the course of such business of this State.
All of the | 11 | | moneys received by the Department of Revenue pursuant to this | 12 | | Act
and the Cigarette Use Tax Act from the additional taxes | 13 | | imposed by this
amendatory Act of 1997, shall be paid each | 14 | | month into the Common School Fund.
On and after July 1, 2002, | 15 | | in addition to any other tax imposed by this Act,
a tax is | 16 | | imposed upon any person engaged in business as a retailer of
| 17 | | cigarettes at the rate of 20.0 mills per cigarette sold or | 18 | | otherwise disposed
of
in the course of such business in this | 19 | | State.
Beginning on June 24, 2012, in addition to any other tax | 20 | | imposed by this Act, a tax is imposed upon any person engaged | 21 | | in business as a retailer of cigarettes at the rate of 50 mills | 22 | | per cigarette sold or otherwise disposed of in the course of | 23 | | such business in this State. All moneys received by the | 24 | | Department of Revenue under this Act and the Cigarette Use Tax | 25 | | Act from the additional taxes imposed by this amendatory Act of | 26 | | the 97th General Assembly shall be paid each month into the |
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| 1 | | Healthcare Provider Relief Fund. The payment of such taxes | 2 | | shall be evidenced by a stamp affixed to
each original package | 3 | | of cigarettes, or an authorized substitute for such stamp
| 4 | | imprinted on each original package of such cigarettes | 5 | | underneath the sealed
transparent outside wrapper of such | 6 | | original package, as hereinafter provided.
However, such taxes | 7 | | are not imposed upon any activity in such business in
| 8 | | interstate commerce or otherwise, which activity may not under
| 9 | | the Constitution and statutes of the United States be made the | 10 | | subject of
taxation by this State.
| 11 | | Beginning on the effective date of this amendatory Act of | 12 | | the 92nd General
Assembly and through June 30, 2006,
all of the | 13 | | moneys received by the Department of Revenue pursuant to this | 14 | | Act
and the Cigarette Use Tax Act, other than the moneys that | 15 | | are dedicated to the Common
School Fund, shall be distributed | 16 | | each month as follows: first, there shall be
paid into the | 17 | | General Revenue Fund an amount which, when added to the amount
| 18 | | paid into the Common School Fund for that month, equals | 19 | | $33,300,000, except that in the month of August of 2004, this | 20 | | amount shall equal $83,300,000; then, from
the moneys | 21 | | remaining, if any amounts required to be paid into the General
| 22 | | Revenue Fund in previous months remain unpaid, those amounts | 23 | | shall be paid into
the General Revenue Fund;
then, beginning on | 24 | | April 1, 2003, from the moneys remaining, $5,000,000 per
month | 25 | | shall be paid into the School Infrastructure Fund; then, if any | 26 | | amounts
required to be paid into the School Infrastructure Fund |
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| 1 | | in previous months
remain unpaid, those amounts shall be paid | 2 | | into the School Infrastructure
Fund;
then the moneys remaining, | 3 | | if any, shall be paid into the Long-Term Care
Provider Fund.
To | 4 | | the extent that more than $25,000,000 has been paid into the | 5 | | General
Revenue Fund and Common School Fund per month for the | 6 | | period of July 1, 1993
through the effective date of this | 7 | | amendatory Act of 1994 from combined
receipts
of the Cigarette | 8 | | Tax Act and the Cigarette Use Tax Act, notwithstanding the
| 9 | | distribution provided in this Section, the Department of | 10 | | Revenue is hereby
directed to adjust the distribution provided | 11 | | in this Section to increase the
next monthly payments to the | 12 | | Long Term Care Provider Fund by the amount paid to
the General | 13 | | Revenue Fund and Common School Fund in excess of $25,000,000 | 14 | | per
month and to decrease the next monthly payments to the | 15 | | General Revenue Fund and
Common School Fund by that same excess | 16 | | amount.
| 17 | | Beginning on July 1, 2006, all of the moneys received by | 18 | | the Department of Revenue pursuant to this Act and the | 19 | | Cigarette Use Tax Act, other than the moneys that are dedicated | 20 | | to the Common School Fund and, beginning on the effective date | 21 | | of this amendatory Act of the 97th General Assembly, other than | 22 | | the moneys from the additional taxes imposed by this amendatory | 23 | | Act of the 97th General Assembly that must be paid each month | 24 | | into the Healthcare Provider Relief Fund, shall be distributed | 25 | | each month as follows: first, there shall be paid into the | 26 | | General Revenue Fund an amount that, when added to the amount |
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| 1 | | paid into the Common School Fund for that month, equals | 2 | | $29,200,000; then, from the moneys remaining, if any amounts | 3 | | required to be paid into the General Revenue Fund in previous | 4 | | months remain unpaid, those amounts shall be paid into the | 5 | | General Revenue Fund; then from the moneys remaining, | 6 | | $5,000,000 per month shall be paid into the School | 7 | | Infrastructure Fund; then, if any amounts required to be paid | 8 | | into the School Infrastructure Fund in previous months remain | 9 | | unpaid, those amounts shall be paid into the School | 10 | | Infrastructure Fund; then the moneys remaining, if any, shall | 11 | | be paid into the Long-Term Care Provider Fund.
| 12 | | Moneys collected from the tax imposed on little cigars | 13 | | under Section 10-10 of the Tobacco Products Tax Act of 1995 | 14 | | shall be included with the moneys collected under the Cigarette | 15 | | Tax Act and the Cigarette Use Tax Act when making distributions | 16 | | to the Common School Fund, the Healthcare Provider Relief Fund, | 17 | | the General Revenue Fund, the School Infrastructure Fund, and | 18 | | the Long-Term Care Provider Fund under this Section. | 19 | | When any tax imposed herein terminates or has terminated, | 20 | | distributors
who have bought stamps while such tax was in | 21 | | effect and who therefore paid
such tax, but who can show, to | 22 | | the Department's satisfaction, that they
sold the cigarettes to | 23 | | which they affixed such stamps after such tax had
terminated | 24 | | and did not recover the tax or its equivalent from purchasers,
| 25 | | shall be allowed by the Department to take credit for such | 26 | | absorbed tax
against subsequent tax stamp purchases from the |
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| 1 | | Department by such
distributor.
| 2 | | The impact of the tax levied by this Act is imposed upon | 3 | | the retailer
and shall be prepaid or pre-collected by the | 4 | | distributor for the purpose of
convenience and facility only, | 5 | | and the amount of the tax shall be added to
the price of the | 6 | | cigarettes sold by such distributor. Collection of the tax
| 7 | | shall be evidenced by a stamp or stamps affixed to each | 8 | | original package of
cigarettes, as hereinafter provided.
| 9 | | Each distributor shall collect the tax from the retailer at | 10 | | or before
the time of the sale, shall affix the stamps as | 11 | | hereinafter required, and
shall remit the tax collected from | 12 | | retailers to the Department, as
hereinafter provided. Any | 13 | | distributor who fails to properly collect and pay
the tax | 14 | | imposed by this Act shall be liable for the tax. Any | 15 | | distributor having
cigarettes to which stamps have been affixed | 16 | | in his possession for sale on the
effective date of this | 17 | | amendatory Act of 1989 shall not be required to pay the
| 18 | | additional tax imposed by this amendatory Act of 1989 on such | 19 | | stamped
cigarettes. Any distributor having cigarettes to which | 20 | | stamps have been affixed
in his or her possession for sale at | 21 | | 12:01 a.m. on the effective date of this
amendatory Act of | 22 | | 1993, is required to pay the additional tax imposed by this
| 23 | | amendatory Act of 1993 on such stamped cigarettes. This | 24 | | payment, less the
discount provided in subsection (b), shall be | 25 | | due when the distributor first
makes a purchase of cigarette | 26 | | tax stamps after the effective date of this
amendatory Act of |
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| 1 | | 1993, or on the first due date of a return under this Act
after | 2 | | the effective date of this amendatory Act of 1993, whichever | 3 | | occurs
first. Any distributor having cigarettes to which stamps | 4 | | have been affixed
in his possession for sale on December 15, | 5 | | 1997
shall not be required to pay the additional tax imposed by | 6 | | this amendatory Act
of 1997 on such stamped cigarettes.
| 7 | | Any distributor having cigarettes to which stamps have been | 8 | | affixed in his
or her
possession for sale on July 1, 2002 shall | 9 | | not be required to pay the additional
tax imposed by this | 10 | | amendatory Act of the 92nd General Assembly on those
stamped
| 11 | | cigarettes.
| 12 | | Any retailer having cigarettes in his or her possession on | 13 | | June 24, 2012 to which tax stamps have been affixed is not | 14 | | required to pay the additional tax that begins on June 24, 2012 | 15 | | imposed by this amendatory Act of the 97th General Assembly on | 16 | | those stamped cigarettes. Any distributor having cigarettes in | 17 | | his or her possession on June 24, 2012 to which tax stamps have | 18 | | been affixed, and any distributor having stamps in his or her | 19 | | possession on June 24, 2012 that have not been affixed to | 20 | | packages of cigarettes before June 24, 2012, is required to pay | 21 | | the additional tax that begins on June 24, 2012 imposed by this | 22 | | amendatory Act of the 97th General Assembly to the extent the | 23 | | calendar year 2012 average monthly volume of cigarette stamps | 24 | | in the distributor's possession exceeds the average monthly | 25 | | volume of cigarette stamps purchased by the distributor in | 26 | | calendar year 2011. This payment, less the discount provided in |
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| 1 | | subsection (b), is due when the distributor first makes a | 2 | | purchase of cigarette stamps on or after June 24, 2012 or on | 3 | | the first due date of a return under this Act occurring on or | 4 | | after June 24, 2012, whichever occurs first. Those distributors | 5 | | may elect to pay the additional tax on packages of cigarettes | 6 | | to which stamps have been affixed and on any stamps in the | 7 | | distributor's possession that have not been affixed to packages | 8 | | of cigarettes over a period not to exceed 12 months from the | 9 | | due date of the additional tax by notifying the Department in | 10 | | writing. The first payment for distributors making such | 11 | | election is due when the distributor first makes a purchase of | 12 | | cigarette tax stamps on or after June 24, 2012 or on the first | 13 | | due date of a return under this Act occurring on or after June | 14 | | 24, 2012, whichever occurs first. Distributors making such an | 15 | | election are not entitled to take the discount provided in | 16 | | subsection (b) on such payments. | 17 | | Distributors making sales of cigarettes to secondary | 18 | | distributors shall add the amount of the tax to the price of | 19 | | the cigarettes sold by the distributors. Secondary | 20 | | distributors making sales of cigarettes to retailers shall | 21 | | include the amount of the tax in the price of the cigarettes | 22 | | sold to retailers. The amount of tax shall not be less than the | 23 | | amount of taxes imposed by the State and all local | 24 | | jurisdictions. The amount of local taxes shall be calculated | 25 | | based on the location of the retailer's place of business shown | 26 | | on the retailer's certificate of registration or |
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| 1 | | sub-registration issued to the retailer pursuant to Section 2a | 2 | | of the Retailers' Occupation Tax Act. The original packages of | 3 | | cigarettes sold to the retailer shall bear all the required | 4 | | stamps, or other indicia, for the taxes included in the price | 5 | | of cigarettes. | 6 | | The amount of the Cigarette Tax imposed by this Act shall | 7 | | be separately
stated, apart from the price of the goods, by | 8 | | distributors, manufacturer representatives, secondary | 9 | | distributors, and
retailers, in all bills and sales invoices.
| 10 | | (b) The distributor shall be required to collect the taxes | 11 | | provided
under paragraph (a) hereof, and, to cover the costs of | 12 | | such collection,
shall be allowed a discount during any year | 13 | | commencing July 1st and ending
the following June 30th in | 14 | | accordance with the schedule set out
hereinbelow, which | 15 | | discount shall be allowed at the time of purchase of the
stamps | 16 | | when purchase is required by this Act, or at the time when the | 17 | | tax
is remitted to the Department without the purchase of | 18 | | stamps from the
Department when that method of paying the tax | 19 | | is required or authorized by
this Act. Prior to December 1, | 20 | | 1985, a discount equal to 1 2/3% of
the amount of the tax up to | 21 | | and including the first $700,000 paid hereunder by
such | 22 | | distributor to the Department during any such year; 1 1/3% of | 23 | | the next
$700,000 of tax or any part thereof, paid hereunder by | 24 | | such distributor to the
Department during any such year; 1% of | 25 | | the next $700,000 of tax, or any part
thereof, paid hereunder | 26 | | by such distributor to the Department during any such
year, and |
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| 1 | | 2/3 of 1% of the amount of any additional tax paid hereunder by | 2 | | such
distributor to the Department during any such year shall | 3 | | apply. On and after
December 1, 1985, a discount equal to 1.75% | 4 | | of the amount of the tax payable
under this Act up to and | 5 | | including the first $3,000,000 paid hereunder by such
| 6 | | distributor to the Department during any such year and 1.5% of | 7 | | the amount of
any additional tax paid hereunder by such | 8 | | distributor to the Department during
any such year shall apply.
| 9 | | Two or more distributors that use a common means of | 10 | | affixing revenue tax
stamps or that are owned or controlled by | 11 | | the same interests shall be
treated as a single distributor for | 12 | | the purpose of computing the discount.
| 13 | | (c) The taxes herein imposed are in addition to all other | 14 | | occupation or
privilege taxes imposed by the State of Illinois, | 15 | | or by any political
subdivision thereof, or by any municipal | 16 | | corporation.
| 17 | | (Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11; | 18 | | 97-688, eff. 6-14-12.)
| 19 | | Section 10. The Cigarette Use Tax Act is amended by | 20 | | changing Section 1 as follows:
| 21 | | (35 ILCS 135/1) (from Ch. 120, par. 453.31)
| 22 | | Sec. 1. For the purpose of this Act, unless otherwise | 23 | | required by the
context:
| 24 | | "Use" means the exercise by any person of any right or |
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| 1 | | power over
cigarettes incident to the ownership or possession | 2 | | thereof, other than the
making of a sale thereof in the course | 3 | | of engaging in a business of selling
cigarettes and shall | 4 | | include the keeping or retention of cigarettes for use, except | 5 | | that "use" does not include the use of cigarettes by a | 6 | | not-for-profit research institution conducting tests | 7 | | concerning the health effects of tobacco products, provided the | 8 | | cigarettes are not offered for resale.
| 9 | | "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. | 13 | | Until July 1, 2012, and beginning July 1, 2013, "cigarette" | 14 | | means any roll for smoking made wholly or in part of tobacco
| 15 | | irrespective of size or shape and whether or not such tobacco | 16 | | is flavored,
adulterated or mixed with any other ingredient, | 17 | | and the wrapper or cover of
which is made of paper or any other | 18 | | substance or material except tobacco.
| 19 | | "Cigarette", beginning on and after July 1, 2012, and | 20 | | through June 30, 2013, means any roll for smoking made wholly | 21 | | or in part of tobacco irrespective of size or shape and whether | 22 | | or not such tobacco is flavored, adulterated or mixed with any | 23 | | other ingredient, and the wrapper or cover of which is made of | 24 | | paper. | 25 | | "Cigarette", beginning on and after July 1, 2012, and | 26 | | through June 30, 2013, also shall mean: Any roll for smoking |
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| 1 | | made wholly or in part of tobacco labeled as anything other | 2 | | than a cigarette or not bearing a label, if it meets two or | 3 | | more of the following criteria: | 4 | | (a) the product is sold in packs similar to cigarettes; | 5 | | (b) the product is available for sale in cartons of ten | 6 | | packs; | 7 | | (c) the product is sold in soft packs, hard packs, | 8 | | flip-top boxes, clam shells, or other cigarette-type | 9 | | boxes; | 10 | | (d) the product is of a length and diameter similar to | 11 | | commercially manufactured cigarettes; | 12 | | (e) the product has a cellulose acetate or other | 13 | | integrated filter; | 14 | | (f) the product is marketed or advertised to consumers | 15 | | as a cigarette or cigarette substitute; or | 16 | | (g) other evidence that the product fits within the | 17 | | definition of cigarette. | 18 | | "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; | 24 | | (d) cigarettes that are manufactured, fabricated, | 25 | | assembled, processed, packaged, or labeled by any person | 26 | | other than (i) the owner of the trademark rights in the |
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| 1 | | cigarette brand or (ii) a person that is directly or | 2 | | indirectly authorized by such owner; | 3 | | (e) cigarettes imported into the United States, or | 4 | | otherwise distributed, in violation of the federal | 5 | | Imported Cigarette Compliance Act of 2000 (Title IV of | 6 | | Public Law 106-476); | 7 | | (f) cigarettes that have false manufacturing labels; | 8 | | (g) cigarettes identified in Section 3-10(a)(1) of | 9 | | this Act; | 10 | | (h) cigarettes that are improperly tax stamped, | 11 | | including cigarettes that bear a tax stamp of another state | 12 | | or taxing jurisdiction; or | 13 | | (i) cigarettes made or fabricated by a person holding a | 14 | | cigarette machine operator license under Section 1-20 of | 15 | | the Cigarette Machine Operators' Occupation Tax Act in the | 16 | | possession of manufacturers, distributors, secondary | 17 | | distributors, manufacturer representatives or other | 18 | | retailers for the purpose of resale, regardless of whether | 19 | | the tax has been paid on such cigarettes. | 20 | | "Person" means any natural individual, firm, partnership, | 21 | | association,
joint stock company, joint adventure, public or | 22 | | private corporation,
however formed, limited liability | 23 | | company, or a receiver, executor,
administrator, trustee, | 24 | | guardian or other representative appointed by order of
any | 25 | | court.
| 26 | | "Department" means the Department of Revenue.
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| 1 | | "Sale" means any transfer, exchange or barter in any manner | 2 | | or by any
means whatsoever for a consideration, and includes | 3 | | and means all sales made
by any person.
| 4 | | "Original Package" means the individual packet, box or | 5 | | other container
whatsoever used to contain and to convey | 6 | | cigarettes to the consumer.
| 7 | | "Distributor" means any and each of the following:
| 8 | | a. Any person engaged in the business of selling | 9 | | cigarettes in this
State who brings or causes to be brought | 10 | | into this State from without this
State any original | 11 | | packages of cigarettes, on which original packages there
is | 12 | | no authorized evidence underneath a sealed transparent | 13 | | wrapper showing
that the tax liability imposed by this Act | 14 | | has been paid or assumed by the
out-of-State seller of such | 15 | | cigarettes, for sale in the course of such
business.
| 16 | | b. Any person who makes, manufactures or fabricates | 17 | | cigarettes in this
State for sale, except a person who | 18 | | makes, manufactures or fabricates
cigarettes for sale to | 19 | | residents incarcerated in penal institutions or resident
| 20 | | patients or a State-operated mental health facility.
| 21 | | c. Any person who makes, manufactures or fabricates | 22 | | cigarettes outside
this State, which cigarettes are placed | 23 | | in original packages contained in
sealed transparent | 24 | | wrappers, for delivery or shipment into this State, and
who | 25 | | elects to qualify and is accepted by the Department as a | 26 | | distributor
under Section 7 of this Act.
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| 1 | | "Distributor" does not include any person who transfers | 2 | | cigarettes to a not-for-profit
research institution that | 3 | | conducts tests concerning the
health effects of tobacco | 4 | | products and who does not offer
the cigarettes for resale.
| 5 | | "Distributor maintaining a place of business in this | 6 | | State", or any like
term, means any distributor having or | 7 | | maintaining within this State,
directly or by a subsidiary, an | 8 | | office, distribution house, sales house,
warehouse or other | 9 | | place of business, or any agent operating within this
State | 10 | | under the authority of the distributor or its subsidiary,
| 11 | | irrespective of whether such place of business or agent is | 12 | | located here
permanently or temporarily, or whether such | 13 | | distributor or subsidiary is
licensed to transact business | 14 | | within this State.
| 15 | | "Business" means any trade, occupation, activity or | 16 | | enterprise engaged
in or conducted in this State for the | 17 | | purpose of selling cigarettes.
| 18 | | "Prior Continuous Compliance Taxpayer" means any person | 19 | | who is licensed
under this Act and who, having been a licensee | 20 | | for a continuous period of 5
years, is determined by the | 21 | | Department not to have been either delinquent
or deficient in | 22 | | the payment of tax liability during that period or
otherwise in | 23 | | violation of this Act. Also, any taxpayer who has, as
verified | 24 | | by the Department, continuously complied with the
condition of | 25 | | his bond or other security under provisions of this Act of a
| 26 | | period of 5 consecutive years shall be considered to be a |
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| 1 | | "prior
continuous compliance taxpayer". In calculating the | 2 | | consecutive period of
time described herein for qualification | 3 | | as a "prior continuous compliance
taxpayer", a consecutive | 4 | | period of time of qualifying compliance
immediately prior to | 5 | | the effective date of this amendatory Act of 1987 shall be
| 6 | | credited to any licensee who became licensed on or before the | 7 | | effective date
of this amendatory Act of 1987.
| 8 | | "Secondary distributor" means any person engaged in the | 9 | | business of selling cigarettes who purchases stamped original | 10 | | packages of cigarettes from a licensed distributor under this | 11 | | Act or the Cigarette Tax Act, sells 75% or more of those | 12 | | cigarettes to retailers for resale, and maintains an | 13 | | established business where a substantial stock of cigarettes is | 14 | | available to retailers for resale. | 15 | | "Secondary distributor maintaining a place of business in | 16 | | this State", or any like term, means any secondary distributor | 17 | | having or maintaining within this State, directly or by a | 18 | | subsidiary, an office, distribution house, sales house, | 19 | | warehouse, or other place of business, or any agent operating | 20 | | within this State under the authority of the secondary | 21 | | distributor or its subsidiary, irrespective of whether such | 22 | | place of business or agent is located here permanently or | 23 | | temporarily, or whether such secondary distributor or | 24 | | subsidiary is licensed to transact business within this State. | 25 | | "Stamp" or "stamps" mean the indicia required to be affixed | 26 | | on a pack of cigarettes that evidence payment of the tax on |
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| 1 | | cigarettes under Section 2 of this Act. | 2 | | "Related party" means any person that is associated with | 3 | | any other person because he or she: | 4 | | (a) is an officer or director of a business; or | 5 | | (b) is legally recognized as a partner in business. | 6 | | (Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10; | 7 | | 97-688, eff. 6-14-12.)
| 8 | | Section 15. The Tobacco Products Tax Act of 1995 is amended | 9 | | by changing Sections 10-5, 10-10, 10-15, 10-30, and 10-45 and | 10 | | by adding Sections 10-26, 10-27, 10-28, 10-29, and 10-36 as | 11 | | follows:
| 12 | | (35 ILCS 143/10-5)
| 13 | | Sec. 10-5. Definitions. For purposes of this Act:
| 14 | | "Business" means any trade, occupation, activity, or | 15 | | enterprise engaged
in, at any location whatsoever, for the | 16 | | purpose of selling tobacco products.
| 17 | | "Cigarette" has the meaning ascribed to the term in Section | 18 | | 1 of the
Cigarette Tax Act.
| 19 | | "Contraband little cigar" means: | 20 | | (1) packages of little cigars containing 20 or 25 | 21 | | little cigars that do not bear a required tax stamp under | 22 | | this Act; | 23 | | (2) packages of little cigars containing 20 or 25 | 24 | | little cigars that bear a fraudulent, imitation, or |
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| 1 | | counterfeit tax stamp; | 2 | | (3) packages of little cigars containing 20 or 25 | 3 | | little cigars that are improperly tax stamped, including | 4 | | packages of little cigars that bear only a tax stamp of | 5 | | another state or taxing jurisdiction; or | 6 | | (4) packages of little cigars containing other than 20 | 7 | | or 25 little cigars in the possession of a distributor, | 8 | | retailer or wholesaler, unless the distributor, retailer, | 9 | | or wholesaler possesses, or produces within the time frame | 10 | | provided in Section 10-27 or 10-28 of this Act, an invoice | 11 | | from a stamping distributor, distributor, or wholesaler | 12 | | showing that the tax on the packages has been or will be | 13 | | paid. | 14 | | "Correctional Industries program" means a program run by a | 15 | | State penal
institution in which residents of the penal | 16 | | institution produce tobacco
products for sale to persons | 17 | | incarcerated in penal institutions or resident
patients of a | 18 | | State operated mental health facility.
| 19 | | "Department" means the Illinois Department of Revenue.
| 20 | | "Distributor" means any of the following:
| 21 | | (1) Any manufacturer or wholesaler in this State | 22 | | engaged in the business
of selling tobacco products who | 23 | | sells, exchanges, or distributes tobacco
products to | 24 | | retailers or consumers in this State.
| 25 | | (2) Any manufacturer or wholesaler engaged
in
the | 26 | | business of selling tobacco products from without this |
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| 1 | | State who sells,
exchanges, distributes,
ships, or | 2 | | transports tobacco products to retailers or consumers | 3 | | located in
this State,
so long as that manufacturer or | 4 | | wholesaler has or maintains within this State,
directly or | 5 | | by subsidiary, an office, sales house, or other place of | 6 | | business,
or any agent or other representative operating | 7 | | within this State under the
authority of the person or | 8 | | subsidiary, irrespective of whether the place of
business | 9 | | or agent or other representative is located here | 10 | | permanently or
temporarily.
| 11 | | (3) Any retailer who receives tobacco products on which | 12 | | the tax has not
been or
will not be paid by another | 13 | | distributor.
| 14 | | "Distributor" does not include any person, wherever | 15 | | resident or located, who
makes, manufactures, or fabricates | 16 | | tobacco products as part of a Correctional
Industries program | 17 | | for sale to residents incarcerated in penal institutions or
| 18 | | resident patients of a State operated mental health facility.
| 19 | | "Little cigar" means and includes any roll, made wholly or | 20 | | in part of tobacco, where such roll has an integrated cellulose | 21 | | acetate filter and weighs less than 4 pounds per thousand and | 22 | | the wrapper or cover of which is made in whole or in part of | 23 | | tobacco. | 24 | | "Manufacturer" means any person, wherever resident or | 25 | | located, who
manufactures and sells tobacco products, except a | 26 | | person who makes,
manufactures, or fabricates tobacco products |
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| 1 | | as a part of a Correctional
Industries program for sale to | 2 | | persons incarcerated in penal institutions or
resident | 3 | | patients of a State operated mental health facility.
| 4 | | Beginning on January 1, 2013, "moist snuff" means any | 5 | | finely cut, ground, or powdered tobacco that is not intended to | 6 | | be smoked, but shall not include any finely cut, ground, or | 7 | | powdered tobacco that is intended to be placed in the nasal | 8 | | cavity. | 9 | | "Person" means any natural individual, firm, partnership, | 10 | | association, joint
stock company, joint venture, limited | 11 | | liability company, or public or private
corporation, however | 12 | | formed, or a receiver, executor, administrator, trustee,
| 13 | | conservator, or other representative appointed by order of any | 14 | | court.
| 15 | | "Place of business" means and includes any place where | 16 | | tobacco products
are sold or where tobacco products are | 17 | | manufactured, stored, or kept for
the purpose of sale or | 18 | | consumption, including any vessel, vehicle, airplane,
train, | 19 | | or vending machine.
| 20 | | "Retailer" means any person in this State engaged in the | 21 | | business of selling
tobacco products to consumers in this | 22 | | State, regardless of quantity or number
of sales.
| 23 | | "Sale" means any transfer, exchange, or barter in any | 24 | | manner or by any means
whatsoever for a consideration and | 25 | | includes all sales made by
persons.
| 26 | | "Stamp" or "stamps" mean the indicia required to be affixed |
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| 1 | | on a package of little cigars that evidence payment of the tax | 2 | | on packages of little cigars containing 20 or 25 little cigars | 3 | | under Section 10-10 of this Act. These stamps shall be the same | 4 | | stamps used for cigarettes under the Cigarette Tax Act. | 5 | | "Stamping distributor" means a distributor licensed under | 6 | | this Act and also licensed as a distributor under the Cigarette | 7 | | Tax Act or Cigarette Use Tax Act. | 8 | | "Tobacco products" means any cigars , including little | 9 | | cigars ; cheroots; stogies; periques; granulated,
plug cut, | 10 | | crimp cut, ready rubbed, and other smoking tobacco; snuff | 11 | | (including moist snuff) or snuff
flour; cavendish; plug and | 12 | | twist tobacco; fine-cut and other chewing tobaccos;
shorts; | 13 | | refuse scraps, clippings, cuttings, and sweeping of tobacco; | 14 | | and
other kinds and forms of tobacco, prepared in such manner | 15 | | as to be suitable for
chewing or smoking in a pipe or | 16 | | otherwise, or both for chewing and smoking; but
does not | 17 | | include cigarettes or tobacco purchased for the manufacture of
| 18 | | cigarettes by cigarette distributors and manufacturers defined | 19 | | in the
Cigarette Tax Act and persons who make, manufacture, or | 20 | | fabricate
cigarettes as a part of a Correctional Industries | 21 | | program for sale to
residents incarcerated in penal | 22 | | institutions or resident patients of a
State operated mental | 23 | | health facility.
| 24 | | "Wholesale price" means the established list price for | 25 | | which a manufacturer
sells tobacco products to a distributor, | 26 | | before the allowance of any discount,
trade allowance, rebate, |
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| 1 | | or other reduction.
In the absence of such an established list | 2 | | price, the manufacturer's invoice
price at which the | 3 | | manufacturer sells the tobacco product to unaffiliated
| 4 | | distributors, before any discounts, trade allowances, rebates, | 5 | | or other
reductions, shall be presumed to be the wholesale | 6 | | price.
| 7 | | "Wholesaler" means any person, wherever resident or | 8 | | located, engaged in the
business of selling tobacco products to | 9 | | others for the purpose of resale. "Wholesaler", when used in | 10 | | this Act, does not include a person licensed as a distributor | 11 | | under Section 10-20 of this Act unless expressly stated in this | 12 | | Act.
| 13 | | (Source: P.A. 97-688, eff. 6-14-12.)
| 14 | | (35 ILCS 143/10-10)
| 15 | | Sec. 10-10. Tax imposed. | 16 | | (a) Except as otherwise provided in this Section with | 17 | | respect to little cigars, on On the first day of the third | 18 | | month after the
month in which this Act becomes law, a tax is | 19 | | imposed on any person engaged in
business as a distributor of | 20 | | tobacco products, as defined in Section 10-5,
at the rate of | 21 | | (i) 18% of the wholesale price of tobacco products sold or | 22 | | otherwise
disposed of to retailers or consumers located in this | 23 | | State prior to July 1, 2012 and (ii) 36% of the wholesale price | 24 | | of tobacco products sold or otherwise
disposed of to retailers | 25 | | or consumers located in this State beginning on July 1, 2012; |
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| 1 | | except that, beginning on January 1, 2013, the tax on moist | 2 | | snuff shall be imposed at a rate of $0.30 per ounce, and a | 3 | | proportionate tax at the like rate on all fractional parts of | 4 | | an ounce, sold or otherwise
disposed of to retailers or | 5 | | consumers located in this State. The tax is in
addition to all | 6 | | other
occupation or privilege taxes imposed by the State of | 7 | | Illinois, by any
political subdivision thereof, or by any | 8 | | municipal corporation. However, the
tax is not imposed upon any | 9 | | activity in that business in interstate commerce or
otherwise, | 10 | | to the extent to which that activity may not, under the | 11 | | Constitution
and Statutes of the United States, be made the | 12 | | subject of taxation by this
State , and except that, beginning | 13 | | July 1, 2013, the tax on little cigars shall be imposed at the | 14 | | same rate, and the proceeds shall be distributed in the same | 15 | | manner, as the tax imposed on cigarettes under the Cigarette | 16 | | Tax Act . The tax is also not imposed on sales made to the | 17 | | United States or any
entity thereof.
| 18 | | (b) Notwithstanding subsection (a) of this Section, | 19 | | stamping distributors of packages of little cigars containing | 20 | | 20 or 25 little cigars sold or otherwise disposed of in this | 21 | | State shall remit the tax by purchasing tax stamps from the | 22 | | Department and affixing them to packages of little cigars in | 23 | | the same manner as stamps are purchased and affixed to | 24 | | cigarettes under the Cigarette Tax Act, unless the stamping | 25 | | distributor sells or otherwise disposes of those packages of | 26 | | little cigars to another stamping distributor. Only persons |
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| 1 | | meeting the definition of "stamping distributor" contained in | 2 | | Section 10-5 of this Act may affix stamps to packages of little | 3 | | cigars containing 20 or 25 little cigars. Stamping distributors | 4 | | may not sell or dispose of little cigars at retail to consumers | 5 | | or users at locations where stamping distributors affix stamps | 6 | | to packages of little cigars containing 20 or 25 little cigars. | 7 | | (c) The impact of the tax levied by this Act is imposed | 8 | | upon distributors engaged in the business of selling tobacco | 9 | | products to retailers or consumers in this State. Whenever a | 10 | | stamping distributor brings or causes to be brought into this | 11 | | State from without this State, or purchases from without or | 12 | | within this State, any packages of little cigars containing 20 | 13 | | or 25 little cigars upon which there are no tax stamps affixed | 14 | | as required by this Act, for purposes of resale or disposal in | 15 | | this State to a person not a stamping distributor, then such | 16 | | stamping distributor shall pay the tax to the Department and | 17 | | add the amount of the tax to the price of such packages sold by | 18 | | such stamping distributor. Payment of the tax shall be | 19 | | evidenced by a stamp or stamps affixed to each package of | 20 | | little cigars containing 20 or 25 little cigars. | 21 | | Stamping distributors paying the tax to the Department on | 22 | | packages of little cigars containing 20 or 25 little cigars | 23 | | sold to other distributors, wholesalers or retailers shall add | 24 | | the amount of the tax to the price of the packages of little | 25 | | cigars containing 20 or 25 little cigars sold by such stamping | 26 | | distributors. |
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| 1 | | (d) Beginning on January 1, 2013, the tax rate imposed per | 2 | | ounce of moist snuff may not exceed 15% of the tax imposed upon | 3 | | a package of 20 cigarettes pursuant to the Cigarette Tax Act. | 4 | | (e) All moneys received by the Department under this Act | 5 | | from sales occurring prior to July 1, 2012 shall be paid into
| 6 | | the Long-Term Care Provider Fund of the State Treasury. Of the | 7 | | moneys received by the Department from sales occurring on or | 8 | | after July 1, 2012, except for moneys received from the tax | 9 | | imposed on the sale of little cigars, 50% shall be paid into | 10 | | the Long-Term Care Provider Fund and 50% shall be paid into the | 11 | | Healthcare Provider Relief Fund. Beginning July 1, 2013, all | 12 | | moneys received by the Department under this Act from the tax | 13 | | imposed on little cigars shall be distributed as provided in | 14 | | subsection (a) of Section 2 of the Cigarette Tax Act.
| 15 | | (Source: P.A. 97-688, eff. 6-14-12.)
| 16 | | (35 ILCS 143/10-15)
| 17 | | Sec. 10-15. Exempt sales. Purchases of tobacco products | 18 | | other than little cigars by wholesalers
who will not sell the | 19 | | product at retail are exempt from the tax imposed by this
Act. | 20 | | Purchases of tobacco products other than little cigars by | 21 | | wholesalers and retailers for delivery
of the product outside | 22 | | Illinois are exempt from the tax imposed by this Act.
The | 23 | | wholesaler or retailer making the exempt sale of tobacco | 24 | | products other than little cigars shall document this
exemption | 25 | | by obtaining a certification from the purchaser containing the
|
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| 1 | | seller's name and address, the purchaser's name and address, | 2 | | the date of
purchase, the purchaser's signature, the | 3 | | purchaser's tobacco products tax
license number, if | 4 | | applicable, and a statement that the purchaser is purchasing | 5 | | for resale
other than for sale to consumers or is purchasing | 6 | | for delivery outside of
Illinois.
| 7 | | (Source: P.A. 89-21, eff. 6-6-95.)
| 8 | | (35 ILCS 143/10-26 new) | 9 | | Sec. 10-26. Manufacturers; sale of little cigars. | 10 | | Manufacturers that are not stamping distributors may not sell | 11 | | little cigars to consumers in this State or to distributors, | 12 | | wholesalers or retailers, unless the distributors, wholesalers | 13 | | or retailers are stamping distributors. Manufacturers that are | 14 | | not stamping distributors may sell little cigars only to | 15 | | stamping distributors. Manufacturers that are not stamping | 16 | | distributors are prohibited from delivering little cigars to | 17 | | locations where sales of little cigars to consumers or users | 18 | | take place. | 19 | | (35 ILCS 143/10-27 new) | 20 | | Sec. 10-27. Retailers; purchase and possession of little | 21 | | cigars. | 22 | | (a) Retailers are prohibited from possessing unstamped | 23 | | packages of little cigars containing 20 or 25 little cigars at | 24 | | locations where retailers make sales of little cigars to |
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| 1 | | consumers or users. Retailers that are also stamping | 2 | | distributors are prohibited from possessing unstamped little | 3 | | cigars at locations where those retailers make sales of | 4 | | packages of little cigars containing 20 or 25 little cigars to | 5 | | consumers or users. Retailers that are not stamping | 6 | | distributors shall purchase stamped packages of little cigars | 7 | | containing 20 or 25 little cigars for resale only from stamping | 8 | | distributors, distributors, or wholesalers. Retailers who are | 9 | | not stamping distributors may not purchase or possess unstamped | 10 | | packages of little cigars containing 20 or 25 little cigars. A | 11 | | retailer must be a stamping distributor to make tax exempt | 12 | | sales of packages of little cigars containing 20 or 25 little | 13 | | cigars for use outside of this State. A retailer who is a | 14 | | stamping distributor making sales of stamped packages of little | 15 | | cigars for use outside of this State may file a claim for | 16 | | credit for such sales with the Department on forms and in the | 17 | | manner provided by the Department. | 18 | | (b) For purchases of packages of little cigars containing | 19 | | other than 20 or 25 little cigars, retailers who are not | 20 | | stamping distributors may not purchase or possess such packages | 21 | | of little cigars, unless the retailer receives an invoice from | 22 | | a stamping distributor, distributor, or wholesaler stating the | 23 | | tax on the packages has been or will be paid. Retailers shall | 24 | | retain such invoices for inspection by the Department. If a | 25 | | retailer maintaining multiple retail locations notifies the | 26 | | Department in writing that it maintains its invoices at a |
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| 1 | | centralized business location, the Department shall have the | 2 | | authority to inspect invoices at the centralized business | 3 | | location at all times during the usual business hours of the | 4 | | day and the Department may grant the retailer 3 business days | 5 | | to produce the invoices at the retail location at which the | 6 | | request was made. A retailer must be a stamping distributor to | 7 | | make tax exempt sales of packages of little cigars containing | 8 | | other than 20 or 25 little cigars for use outside of this | 9 | | State. A retailer who is a stamping distributor making sales of | 10 | | packages of little cigars containing other than 20 or 25 little | 11 | | cigars for use outside of this State on which the tax has been | 12 | | or will be paid by another stamping distributor or was paid by | 13 | | the retailer may file a claim for credit for such sales with | 14 | | the Department on forms and in the manner provided by the | 15 | | Department. | 16 | | (c) Notwithstanding anything to the contrary in this Act, a | 17 | | retailer unknowingly possessing contraband little cigars | 18 | | obtained from a stamping distributor, distributor, or | 19 | | wholesaler or other person engaged in the business of selling | 20 | | tobacco products or knowingly possessing contraband little | 21 | | cigars obtained from a stamping distributor is not subject to | 22 | | penalties for such purchase or possession if the retailer, | 23 | | within 48 hours after discovering that the little cigars are | 24 | | contraband little cigars, excluding Saturdays, Sundays, and | 25 | | holidays: (i) notifies the Department and the person from whom | 26 | | the little cigars were obtained, orally and in writing, that he |
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| 1 | | or she possesses contraband little cigars; (ii) places the | 2 | | contraband little cigars in one or more containers and seals | 3 | | those containers; and (iii) places on the containers the | 4 | | following or similar language: "Contraband Little Cigars. Not | 5 | | For Sale." All contraband little cigars in the possession of a | 6 | | retailer remain subject to forfeiture under the provisions of | 7 | | this Act. | 8 | | (35 ILCS 143/10-28 new) | 9 | | Sec. 10-28. Wholesalers. | 10 | | (a) Wholesalers are prohibited from possessing unstamped | 11 | | packages of little cigars containing 20 or 25 little cigars | 12 | | unless the wholesalers are stamping distributors. A wholesaler | 13 | | must be a stamping distributor to make tax exempt sales of | 14 | | packages of little cigars containing 20 or 25 little cigars for | 15 | | use outside of this State. A wholesaler who is a stamping | 16 | | distributor making sales of stamped packages of little cigars | 17 | | for use outside of this State may file a claim for credit for | 18 | | such sales with the Department on forms and in the manner | 19 | | provided by the Department. | 20 | | (b) For purchases of packages of little cigars containing | 21 | | other than 20 or 25 little cigars, wholesalers who are not | 22 | | stamping distributors may not purchase or possess such packages | 23 | | of little cigars, unless the wholesalers receive an invoice | 24 | | from a stamping distributor, distributor, or wholesaler | 25 | | stating the tax on the packages has been or will be paid. |
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| 1 | | Wholesalers shall retain such invoices for inspection by the | 2 | | Department. Every sales invoice for packages of little cigars | 3 | | containing other than 20 or 25 little cigars issued by a | 4 | | wholesaler to a person who is not a stamping distributor shall | 5 | | state that the tax imposed by the Act has been or will be paid. | 6 | | If a wholesaler maintaining multiple wholesale locations | 7 | | notifies the Department in writing that it maintains its | 8 | | invoices at a centralized business location, the Department | 9 | | shall have the authority to inspect invoices at the centralized | 10 | | business location at all times during the usual business hours | 11 | | of the day and the Department may grant the wholesaler 3 | 12 | | business days to produce the invoices at the wholesale location | 13 | | at which the request was made. A wholesaler must be a stamping | 14 | | distributor to make tax exempt sales of packages of little | 15 | | cigars containing other than 20 or 25 little cigars for use | 16 | | outside of this State. A wholesaler who is a stamping | 17 | | distributor making sales of packages of little cigars | 18 | | containing other than 20 or 25 little cigars for use outside of | 19 | | this State on which the tax has been or will be paid by another | 20 | | stamping distributor or was paid by the wholesaler may file a | 21 | | claim for credit for such sales with the Department on forms | 22 | | and in the manner provided by the Department. | 23 | | (35 ILCS 143/10-29 new) | 24 | | Sec. 10-29. Invoices; packages of little cigars. | 25 | | (a) Every sales invoice for packages of little cigars |
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| 1 | | containing other than 20 or 25 little cigars issued by a | 2 | | stamping distributor to a person who is not a stamping | 3 | | distributor shall contain both the stamping distributor's | 4 | | Tobacco Products License number and Cigarette Tax | 5 | | Distributor's License number or Cigarette Use Tax | 6 | | Distributor's License number and state that the tax imposed by | 7 | | the Act has been or will be paid or that the sale is exempt in | 8 | | whole or in part and the exemption which is claimed. | 9 | | (b) Any stamping distributor, distributor or wholesaler | 10 | | who knowingly falsely states on the invoice that the tax | 11 | | imposed by this Act has been or will be paid, or any officer or | 12 | | employee of a corporation, member or employee of a partnership, | 13 | | or manager, member or employee of a limited liability company | 14 | | that is a stamping distributor, distributor, or wholesaler, | 15 | | who, as such officer, employee, manager, or member, knowingly | 16 | | causes to be issued an invoice on behalf of such entity, that | 17 | | such person knows falsely states that the tax imposed by the | 18 | | Act has been or will be paid, is guilty of a Class 4 felony. | 19 | | (c) Whenever any sales invoice issued by a stamping | 20 | | distributor, distributor or wholesaler for the sale of packages | 21 | | of little cigars containing other than 20 or 25 little cigars | 22 | | does not comply with subsection (b) of Section 10-28 or | 23 | | subsection (a) of this Section by indicating that the tax has | 24 | | been or will be paid or that the sale is exempt in whole or in | 25 | | part, a prima facie presumption shall arise that the tax | 26 | | imposed by Section 10-10 of this Act has not been paid on the |
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| 1 | | little cigars listed on the sales invoice. A person who is not | 2 | | a stamping distributor and is unable to rebut this presumption | 3 | | is in violation of this Act and is subject to the penalties | 4 | | provided in this Act.
| 5 | | (35 ILCS 143/10-30)
| 6 | | Sec. 10-30. Returns. | 7 | | (a) Every distributor shall, on or before the 15th day of
| 8 | | each month, file a return with the Department covering the | 9 | | preceding calendar
month. The return shall disclose the | 10 | | wholesale price for all tobacco products other than moist snuff | 11 | | and the quantity in ounces of moist snuff sold
or otherwise | 12 | | disposed of and other information that the Department may
| 13 | | reasonably require. The return shall be filed upon a form | 14 | | prescribed and
furnished by the Department.
| 15 | | (b) In addition to the information required under | 16 | | subsection (a), on or before the 15th day of each month, | 17 | | covering the preceding calendar month, each stamping | 18 | | distributor shall, on forms prescribed and furnished by the | 19 | | Department, report the quantity of little cigars sold or | 20 | | otherwise disposed of, including the number of packages of | 21 | | little cigars sold or disposed of during the month containing | 22 | | 20 or 25 little cigars. | 23 | | (c) At the time when any return of any distributor is due | 24 | | to be filed with
the Department, the distributor shall also | 25 | | remit to the Department the
tax liability that the distributor |
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| 1 | | has incurred for transactions
occurring in the preceding | 2 | | calendar month.
| 3 | | (d) The Department may adopt rules to require the | 4 | | electronic filing of any return or document required to be | 5 | | filed under this Act. Those rules may provide for exceptions | 6 | | from the filing requirement set forth in this paragraph for | 7 | | persons who demonstrate that they do not have access to the | 8 | | Internet and petition the Department to waive the electronic | 9 | | filing requirement. | 10 | | (Source: P.A. 97-688, eff. 6-14-12.)
| 11 | | (35 ILCS 143/10-36 new) | 12 | | Sec. 10-36. Recordkeeping by retailers. Every retailer | 13 | | shall keep complete and accurate records of tobacco products | 14 | | held and purchased, and tobacco products sold or otherwise | 15 | | disposed of, and shall preserve and keep all invoices, bills of | 16 | | lading, sales records, and copies of bills of sale. Books, | 17 | | records, papers, and documents that are required by this Act to | 18 | | be kept shall, at all times during the usual business hours of | 19 | | the day, be subject to inspection by the Department or its duly | 20 | | authorized agents and employees. The books, records, papers, | 21 | | and documents for any period with respect to which the | 22 | | Department is authorized to issue a notice of tax liability | 23 | | shall be preserved until the expiration of that period.
| 24 | | (35 ILCS 143/10-45)
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| 1 | | Sec. 10-45. Incorporation by reference. All of the | 2 | | provisions of Sections
4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, | 3 | | 5i, 5j, 6, 6a, 6b, 6c, 8, 9, 10, 11, 11a,
and 12 of the | 4 | | Retailers' Occupation Tax Act, and all applicable provisions of
| 5 | | the Uniform Penalty and Interest Act that are not inconsistent | 6 | | with this Act,
apply to distributors of tobacco products to the | 7 | | same extent as if those
provisions were included in this Act. | 8 | | References in the
incorporated Sections of the Retailers' | 9 | | Occupation Tax Act to retailers, to
sellers, or to persons | 10 | | engaged in the business of selling tangible personal
property | 11 | | mean distributors when used in this Act. References in the
| 12 | | incorporated Sections to sales of tangible personal property | 13 | | mean sales
of tobacco products when used in this Act.
| 14 | | All of the provisions of Sections 7, 8, 8a, 16, 18a, 18b, | 15 | | 18c, 22, 23, 24, 26, 27, and 28a of the Cigarette Tax Act which | 16 | | are not inconsistent with this Act shall apply, as far as | 17 | | practicable, to the subject matter of this Act to the same | 18 | | extent as if those provisions were included in this Act. | 19 | | References in the incorporated Sections to sales of cigarettes | 20 | | mean sales of little cigars in packages of 20 or 25 little | 21 | | cigars. | 22 | | (Source: P.A. 89-21, eff. 6-6-95.)
| 23 | | Section 99. Effective date. This Act takes effect upon | 24 | | becoming law. |
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