Full Text of HB3533 97th General Assembly
HB3533 97TH GENERAL ASSEMBLY |
| | 97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012 HB3533 Introduced 2/24/2011___________, by SYNOPSIS AS INTRODUCED: |
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35 ILCS 130/1 | from Ch. 120, par. 453.1 |
35 ILCS 135/1 | from Ch. 120, par. 453.31 |
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Amends the Cigarette Tax Act and the Cigarette Use Tax Act. Defines "Manufacturer's sales representative". Provides that a manufacturer's sales representative may be licensed as a secondary distributor provided that (i) the representative does not possess a quantity in excess of 125 cartons of stamped packages of cigarettes for resale to retailers and (ii) a representative licensed as a secondary distributor is subject to recordkeeping requirements and other restrictions.
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| | | FISCAL NOTE ACT MAY APPLY | |
| | A BILL FOR |
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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 | | Section 1 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 | | "Cigarette", means any
roll for smoking made wholly or in | 13 | | part of tobacco irrespective of size
or shape and whether or | 14 | | not such tobacco is flavored, adulterated or
mixed with any | 15 | | other ingredient, and the wrapper or cover of which is
made of | 16 | | paper or any other substance or material except tobacco.
| 17 | | "Contraband cigarettes" means: | 18 | | (a) cigarettes that do not bear a required tax stamp | 19 | | under this Act; | 20 | | (b) cigarettes for which any required federal taxes | 21 | | have not been paid; | 22 | | (c) cigarettes that bear a counterfeit tax stamp; | 23 | | (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; or | 12 | | (h) cigarettes that are improperly tax stamped, | 13 | | including cigarettes that bear a tax stamp of another state | 14 | | or taxing jurisdiction. | 15 | | "Person" means any natural individual, firm, partnership, | 16 | | association, joint
stock company, joint adventure, public or | 17 | | private corporation, however formed,
limited liability | 18 | | company, or a receiver, executor, administrator, trustee,
| 19 | | guardian or other representative appointed by order of any | 20 | | court.
| 21 | | "Prior Continuous Compliance Taxpayer" means any person | 22 | | who is licensed
under this Act and who, having been a licensee | 23 | | for a continuous period of 5
years, is determined by the | 24 | | Department not to have been either delinquent
or deficient in | 25 | | the payment of tax liability during that period or
otherwise in | 26 | | violation of this Act. Also, any taxpayer who has, as
verified |
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| 1 | | by the Department, continuously complied with the condition of | 2 | | his
bond or other security under provisions of this Act for a | 3 | | period of 5
consecutive years shall be considered to be a | 4 | | "Prior continuous compliance
taxpayer". In calculating the | 5 | | consecutive period of time described herein
for qualification | 6 | | as a "prior continuous compliance taxpayer", a
consecutive | 7 | | period of time of qualifying compliance immediately prior to
| 8 | | the effective date of this amendatory Act of 1987 shall be | 9 | | credited to any
licensee who became licensed on or before the | 10 | | effective date of this
amendatory Act of 1987.
| 11 | | "Department" means the Department of Revenue.
| 12 | | "Sale" means any transfer, exchange or barter in any manner | 13 | | or by any
means whatsoever for a consideration, and includes | 14 | | and means all sales
made by any person.
| 15 | | "Original Package" means the individual packet, box or | 16 | | other container
whatsoever used to contain and to convey | 17 | | cigarettes to the consumer.
| 18 | | "Distributor" means any and each of the following:
| 19 | | (1) Any person engaged in the business of selling | 20 | | cigarettes in this
State who brings or causes to be brought | 21 | | into this State from without
this State any original packages | 22 | | of cigarettes, on which original
packages there is no | 23 | | authorized evidence underneath a sealed transparent
wrapper | 24 | | showing that the tax liability imposed by this Act has been | 25 | | paid
or assumed by the out-of-State seller of such cigarettes, | 26 | | for sale or
other disposition in the course of such business.
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| 1 | | (2) Any person who makes, manufactures or fabricates | 2 | | cigarettes in this
State for sale in this State, except a | 3 | | person who makes, manufactures
or fabricates cigarettes as a | 4 | | part of a correctional industries program
for sale to residents | 5 | | incarcerated in penal institutions or resident patients
of a | 6 | | State-operated mental health facility.
| 7 | | (3) Any person who makes, manufactures or fabricates | 8 | | cigarettes
outside this State, which cigarettes are placed in | 9 | | original packages
contained in sealed transparent wrappers, | 10 | | for delivery or shipment into
this State, and who elects to | 11 | | qualify and is accepted by the Department
as a distributor | 12 | | under Section 4b of this Act.
| 13 | | "Place of business" shall mean and include any place where | 14 | | cigarettes
are sold or where cigarettes are manufactured, | 15 | | stored or kept for the
purpose of sale or consumption, | 16 | | including any vessel, vehicle, airplane,
train or vending | 17 | | machine.
| 18 | | "Business" means any trade, occupation, activity or | 19 | | enterprise
engaged in for the purpose of selling cigarettes in | 20 | | this State.
| 21 | | "Retailer" means any person who engages in the making of | 22 | | transfers of
the ownership of, or title to, cigarettes to a | 23 | | purchaser for use or
consumption and not for resale in any | 24 | | form, for a valuable consideration. "Retailer" does not include | 25 | | a person:
| 26 | | (1) who transfers to residents incarcerated in penal |
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| 1 | | institutions
or resident patients of a State-operated | 2 | | mental health facility ownership
of cigarettes made, | 3 | | manufactured, or fabricated as part of a correctional
| 4 | | industries program; or | 5 | | (2) who transfers cigarettes to a not-for-profit | 6 | | research institution that conducts tests concerning the | 7 | | health effects of tobacco products and who does not offer | 8 | | the cigarettes for resale.
| 9 | | "Retailer" shall be construed to include any person who | 10 | | engages in
the making of transfers of the ownership of, or | 11 | | title to, cigarettes to
a purchaser, for use or consumption by | 12 | | any other person to whom such
purchaser may transfer the | 13 | | cigarettes without a valuable consideration,
except a person | 14 | | who transfers to residents incarcerated in penal institutions
| 15 | | or resident patients of a State-operated mental health facility | 16 | | ownership
of cigarettes made, manufactured or fabricated as | 17 | | part of a correctional
industries program. | 18 | | "Manufacturer's sales representative" means any natural | 19 | | individual employed by a person that makes, manufactures, or | 20 | | fabricates cigarettes outside this State and who is engaged in | 21 | | the business of calling on retailers for the purpose of | 22 | | selling, placing orders for sale, or distributing stamped | 23 | | cigarette packages of the manufacturer's brands to retailers | 24 | | for resale.
| 25 | | "Secondary distributor" means any person engaged in the | 26 | | business of selling cigarettes who purchases stamped original |
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| 1 | | packages of cigarettes from a licensed distributor under this | 2 | | Act or the Cigarette Use Tax Act, sells 75% or more of those | 3 | | cigarettes to retailers for resale, and maintains an | 4 | | established business where a substantial stock of cigarettes is | 5 | | available to retailers for resale. A manufacturer's sales | 6 | | representative may be licensed as a secondary distributor | 7 | | provided that: (i) the individual does not possess, at any one | 8 | | time, a quantity in excess of 125 cartons of stamped packages | 9 | | of cigarettes for resale to retailers and (ii) any | 10 | | manufacturer's sales representative licensed as a secondary | 11 | | distributor is subject to all recordkeeping requirements and | 12 | | other restrictions under this Act. | 13 | | "Stamp" or "stamps" mean the indicia required to be affixed | 14 | | on a pack of cigarettes that evidence payment of the tax on | 15 | | cigarettes under Section 2 of this Act. | 16 | | "Related party" means any person that is associated with | 17 | | any other person because he or she: | 18 | | (a) is an officer or director of a business; or | 19 | | (b) is legally recognized as a partner in business. | 20 | | (Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10; | 21 | | 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
| 22 | | Section 10. The Cigarette Use Tax Act is amended by | 23 | | changing Section 1 as follows:
| 24 | | (35 ILCS 135/1) (from Ch. 120, par. 453.31)
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| 1 | | Sec. 1. For the purpose of this Act, unless otherwise | 2 | | required by the
context:
| 3 | | "Use" means the exercise by any person of any right or | 4 | | power over
cigarettes incident to the ownership or possession | 5 | | thereof, other than the
making of a sale thereof in the course | 6 | | of engaging in a business of selling
cigarettes and shall | 7 | | include the keeping or retention of cigarettes for use, except | 8 | | that "use" does not include the use of cigarettes by a | 9 | | not-for-profit research institution conducting tests | 10 | | concerning the health effects of tobacco products, provided the | 11 | | cigarettes are not offered for resale.
| 12 | | "Brand Style" means a variety of cigarettes distinguished | 13 | | by the tobacco used, tar and nicotine content, flavoring used, | 14 | | size of the cigarette, filtration on the cigarette or | 15 | | packaging. | 16 | | "Cigarette" means any roll for smoking made wholly or in | 17 | | part of tobacco
irrespective of size or shape and whether or | 18 | | not such tobacco is flavored,
adulterated or mixed with any | 19 | | other ingredient, and the wrapper or cover of
which is made of | 20 | | paper or any other substance or material except tobacco.
| 21 | | "Contraband cigarettes" means: | 22 | | (a) cigarettes that do not bear a required tax stamp | 23 | | under this Act; | 24 | | (b) cigarettes for which any required federal taxes | 25 | | have not been paid; | 26 | | (c) cigarettes that bear a counterfeit tax stamp; |
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| 1 | | (d) cigarettes that are manufactured, fabricated, | 2 | | assembled, processed, packaged, or labeled by any person | 3 | | other than (i) the owner of the trademark rights in the | 4 | | cigarette brand or (ii) a person that is directly or | 5 | | indirectly authorized by such owner; | 6 | | (e) cigarettes imported into the United States, or | 7 | | otherwise distributed, in violation of the federal | 8 | | Imported Cigarette Compliance Act of 2000 (Title IV of | 9 | | Public Law 106-476); | 10 | | (f) cigarettes that have false manufacturing labels; | 11 | | (g) cigarettes identified in Section 3-10(a)(1) of | 12 | | this Act; or | 13 | | (h) cigarettes that are improperly tax stamped, | 14 | | including cigarettes that bear a tax stamp of another state | 15 | | or taxing jurisdiction. | 16 | | "Person" means any natural individual, firm, partnership, | 17 | | association,
joint stock company, joint adventure, public or | 18 | | private corporation,
however formed, limited liability | 19 | | company, or a receiver, executor,
administrator, trustee, | 20 | | guardian or other representative appointed by order of
any | 21 | | court.
| 22 | | "Department" means the Department of Revenue.
| 23 | | "Sale" means any transfer, exchange or barter in any manner | 24 | | or by any
means whatsoever for a consideration, and includes | 25 | | and means all sales made
by any person.
| 26 | | "Original Package" means the individual packet, box or |
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| 1 | | other container
whatsoever used to contain and to convey | 2 | | cigarettes to the consumer.
| 3 | | "Distributor" means any and each of the following:
| 4 | | a. Any person engaged in the business of selling | 5 | | cigarettes in this
State who brings or causes to be brought | 6 | | into this State from without this
State any original | 7 | | packages of cigarettes, on which original packages there
is | 8 | | no authorized evidence underneath a sealed transparent | 9 | | wrapper showing
that the tax liability imposed by this Act | 10 | | has been paid or assumed by the
out-of-State seller of such | 11 | | cigarettes, for sale in the course of such
business.
| 12 | | b. Any person who makes, manufactures or fabricates | 13 | | cigarettes in this
State for sale, except a person who | 14 | | makes, manufactures or fabricates
cigarettes for sale to | 15 | | residents incarcerated in penal institutions or resident
| 16 | | patients or a State-operated mental health facility.
| 17 | | c. 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 7 of this Act.
| 23 | | "Distributor" does not include any person who transfers | 24 | | cigarettes to a not-for-profit
research institution that | 25 | | conducts tests concerning the
health effects of tobacco | 26 | | products and who does not offer
the cigarettes for resale.
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| 1 | | "Distributor maintaining a place of business in this | 2 | | State", or any like
term, means any distributor having or | 3 | | maintaining within this State,
directly or by a subsidiary, an | 4 | | office, distribution house, sales house,
warehouse or other | 5 | | place of business, or any agent operating within this
State | 6 | | under the authority of the distributor or its subsidiary,
| 7 | | irrespective of whether such place of business or agent is | 8 | | located here
permanently or temporarily, or whether such | 9 | | distributor or subsidiary is
licensed to transact business | 10 | | within this State.
| 11 | | "Business" means any trade, occupation, activity or | 12 | | enterprise engaged
in or conducted in this State for the | 13 | | purpose of selling cigarettes.
| 14 | | "Prior Continuous Compliance Taxpayer" means any person | 15 | | who is licensed
under this Act and who, having been a licensee | 16 | | for a continuous period of 5
years, is determined by the | 17 | | Department not to have been either delinquent
or deficient in | 18 | | the payment of tax liability during that period or
otherwise in | 19 | | violation of this Act. Also, any taxpayer who has, as
verified | 20 | | by the Department, continuously complied with the
condition of | 21 | | his bond or other security under provisions of this Act of a
| 22 | | period of 5 consecutive years shall be considered to be a | 23 | | "prior
continuous compliance taxpayer". In calculating the | 24 | | consecutive period of
time described herein for qualification | 25 | | as a "prior continuous compliance
taxpayer", a consecutive | 26 | | period of time of qualifying compliance
immediately prior to |
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| 1 | | the effective date of this amendatory Act of 1987 shall be
| 2 | | credited to any licensee who became licensed on or before the | 3 | | effective date
of this amendatory Act of 1987.
| 4 | | "Secondary distributor" means any person engaged in the | 5 | | business of selling cigarettes who purchases stamped original | 6 | | packages of cigarettes from a licensed distributor under this | 7 | | Act or the Cigarette Tax Act, sells 75% or more of those | 8 | | cigarettes to retailers for resale, and maintains an | 9 | | established business where a substantial stock of cigarettes is | 10 | | available to retailers for resale. | 11 | | "Secondary distributor maintaining a place of business in | 12 | | this State", or any like term, means any secondary distributor | 13 | | having or maintaining within this State, directly or by a | 14 | | subsidiary, an office, distribution house, sales house, | 15 | | warehouse, or other place of business, or any agent operating | 16 | | within this State under the authority of the secondary | 17 | | distributor or its subsidiary, irrespective of whether such | 18 | | place of business or agent is located here permanently or | 19 | | temporarily, or whether such secondary distributor or | 20 | | subsidiary is licensed to transact business within this State. | 21 | | However, any manufacturer's sales representative licensed as a | 22 | | secondary distributor may consider and register the motor | 23 | | vehicle licensed to that individual or manufacturer as an | 24 | | office, distribution house, or other place of business. | 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. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10; | 7 | | 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
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