Full Text of HB4465 103rd General Assembly
HB4465 103RD GENERAL ASSEMBLY | | | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 HB4465 Introduced 1/16/2024, by Rep. Sonya M. Harper SYNOPSIS AS INTRODUCED: | | 35 ILCS 120/2-10 | | 410 ILCS 705/65-10 | |
| Amends the Retailers' Occupation Tax Act. In a provision concerning the rate of tax, provides that the definition "prescription and nonprescription medicine and drugs" includes cannabis or cannabis-infused products purchased from a dispensing organization under the Cannabis Regulation and Tax Act by a cardholder under the Compassionate Use of Medical Cannabis Act. Amends the Cannabis Regulation and Tax Act. Provides that the tax imposed under the provisions is not imposed on cannabis-infused product that is subject to tax under the Compassionate Use of Medical Cannabis Program Act or cannabis or cannabis-infused product sold to a cardholder under the Compassionate Use of Medical Cannabis Program Act. Effective January 1, 2026. |
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| | 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 Retailers' Occupation Tax Act is amended by | 5 | | changing Section 2-10 as follows: | 6 | | (35 ILCS 120/2-10) | 7 | | Sec. 2-10. Rate of tax. Unless otherwise provided in this | 8 | | Section, the tax imposed by this Act is at the rate of 6.25% of | 9 | | gross receipts from sales of tangible personal property made | 10 | | in the course of business. | 11 | | Beginning on July 1, 2000 and through December 31, 2000, | 12 | | with respect to motor fuel, as defined in Section 1.1 of the | 13 | | Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of | 14 | | the Use Tax Act, the tax is imposed at the rate of 1.25%. | 15 | | Beginning on August 6, 2010 through August 15, 2010, and | 16 | | beginning again on August 5, 2022 through August 14, 2022, | 17 | | with respect to sales tax holiday items as defined in Section | 18 | | 2-8 of this Act, the tax is imposed at the rate of 1.25%. | 19 | | Within 14 days after July 1, 2000 (the effective date of | 20 | | Public Act 91-872), each retailer of motor fuel and gasohol | 21 | | shall cause the following notice to be posted in a prominently | 22 | | visible place on each retail dispensing device that is used to | 23 | | dispense motor fuel or gasohol in the State of Illinois: "As of |
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| 1 | | July 1, 2000, the State of Illinois has eliminated the State's | 2 | | share of sales tax on motor fuel and gasohol through December | 3 | | 31, 2000. The price on this pump should reflect the | 4 | | elimination of the tax." The notice shall be printed in bold | 5 | | print on a sign that is no smaller than 4 inches by 8 inches. | 6 | | The sign shall be clearly visible to customers. Any retailer | 7 | | who fails to post or maintain a required sign through December | 8 | | 31, 2000 is guilty of a petty offense for which the fine shall | 9 | | be $500 per day per each retail premises where a violation | 10 | | occurs. | 11 | | With respect to gasohol, as defined in the Use Tax Act, the | 12 | | tax imposed by this Act applies to (i) 70% of the proceeds of | 13 | | sales made on or after January 1, 1990, and before July 1, | 14 | | 2003, (ii) 80% of the proceeds of sales made on or after July | 15 | | 1, 2003 and on or before July 1, 2017, (iii) 100% of the | 16 | | proceeds of sales made after July 1, 2017 and prior to January | 17 | | 1, 2024, (iv) 90% of the proceeds of sales made on or after | 18 | | January 1, 2024 and on or before December 31, 2028, and (v) | 19 | | 100% of the proceeds of sales made after December 31, 2028. If, | 20 | | at any time, however, the tax under this Act on sales of | 21 | | gasohol, as defined in the Use Tax Act, is imposed at the rate | 22 | | of 1.25%, then the tax imposed by this Act applies to 100% of | 23 | | the proceeds of sales of gasohol made during that time. | 24 | | With respect to mid-range ethanol blends, as defined in | 25 | | Section 3-44.3 of the Use Tax Act, the tax imposed by this Act | 26 | | applies to (i) 80% of the proceeds of sales made on or after |
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| 1 | | January 1, 2024 and on or before December 31, 2028 and (ii) | 2 | | 100% of the proceeds of sales made after December 31, 2028. If, | 3 | | at any time, however, the tax under this Act on sales of | 4 | | mid-range ethanol blends is imposed at the rate of 1.25%, then | 5 | | the tax imposed by this Act applies to 100% of the proceeds of | 6 | | sales of mid-range ethanol blends made during that time. | 7 | | With respect to majority blended ethanol fuel, as defined | 8 | | in the Use Tax Act, the tax imposed by this Act does not apply | 9 | | to the proceeds of sales made on or after July 1, 2003 and on | 10 | | or before December 31, 2028 but applies to 100% of the proceeds | 11 | | of sales made thereafter. | 12 | | With respect to biodiesel blends, as defined in the Use | 13 | | Tax Act, with no less than 1% and no more than 10% biodiesel, | 14 | | the tax imposed by this Act applies to (i) 80% of the proceeds | 15 | | of sales made on or after July 1, 2003 and on or before | 16 | | December 31, 2018 and (ii) 100% of the proceeds of sales made | 17 | | after December 31, 2018 and before January 1, 2024. On and | 18 | | after January 1, 2024 and on or before December 31, 2030, the | 19 | | taxation of biodiesel, renewable diesel, and biodiesel blends | 20 | | shall be as provided in Section 3-5.1 of the Use Tax Act. If, | 21 | | at any time, however, the tax under this Act on sales of | 22 | | biodiesel blends, as defined in the Use Tax Act, with no less | 23 | | than 1% and no more than 10% biodiesel is imposed at the rate | 24 | | of 1.25%, then the tax imposed by this Act applies to 100% of | 25 | | the proceeds of sales of biodiesel blends with no less than 1% | 26 | | and no more than 10% biodiesel made during that time. |
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| 1 | | With respect to biodiesel, as defined in the Use Tax Act, | 2 | | and biodiesel blends, as defined in the Use Tax Act, with more | 3 | | than 10% but no more than 99% biodiesel, the tax imposed by | 4 | | this Act does not apply to the proceeds of sales made on or | 5 | | after July 1, 2003 and on or before December 31, 2023. On and | 6 | | after January 1, 2024 and on or before December 31, 2030, the | 7 | | taxation of biodiesel, renewable diesel, and biodiesel blends | 8 | | shall be as provided in Section 3-5.1 of the Use Tax Act. | 9 | | Until July 1, 2022 and beginning again on July 1, 2023, | 10 | | with respect to food for human consumption that is to be | 11 | | consumed off the premises where it is sold (other than | 12 | | alcoholic beverages, food consisting of or infused with adult | 13 | | use cannabis, soft drinks, and food that has been prepared for | 14 | | immediate consumption), the tax is imposed at the rate of 1%. | 15 | | Beginning July 1, 2022 and until July 1, 2023, with respect to | 16 | | food for human consumption that is to be consumed off the | 17 | | premises where it is sold (other than alcoholic beverages, | 18 | | food consisting of or infused with adult use cannabis, soft | 19 | | drinks, and food that has been prepared for immediate | 20 | | consumption), the tax is imposed at the rate of 0%. | 21 | | With respect to prescription and nonprescription | 22 | | medicines, drugs, medical appliances, products classified as | 23 | | Class III medical devices by the United States Food and Drug | 24 | | Administration that are used for cancer treatment pursuant to | 25 | | a prescription, as well as any accessories and components | 26 | | related to those devices, modifications to a motor vehicle for |
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| 1 | | the purpose of rendering it usable by a person with a | 2 | | disability, and insulin, blood sugar testing materials, | 3 | | syringes, and needles used by human diabetics, the tax is | 4 | | imposed at the rate of 1%. For the purposes of this Section, | 5 | | until September 1, 2009: the term "soft drinks" means any | 6 | | complete, finished, ready-to-use, non-alcoholic drink, whether | 7 | | carbonated or not, including, but not limited to, soda water, | 8 | | cola, fruit juice, vegetable juice, carbonated water, and all | 9 | | other preparations commonly known as soft drinks of whatever | 10 | | kind or description that are contained in any closed or sealed | 11 | | bottle, can, carton, or container, regardless of size; but | 12 | | "soft drinks" does not include coffee, tea, non-carbonated | 13 | | water, infant formula, milk or milk products as defined in the | 14 | | Grade A Pasteurized Milk and Milk Products Act, or drinks | 15 | | containing 50% or more natural fruit or vegetable juice. | 16 | | Notwithstanding any other provisions of this Act, | 17 | | beginning September 1, 2009, "soft drinks" means non-alcoholic | 18 | | beverages that contain natural or artificial sweeteners. "Soft | 19 | | drinks" does not include beverages that contain milk or milk | 20 | | products, soy, rice or similar milk substitutes, or greater | 21 | | than 50% of vegetable or fruit juice by volume. | 22 | | Until August 1, 2009, and notwithstanding any other | 23 | | provisions of this Act, "food for human consumption that is to | 24 | | be consumed off the premises where it is sold" includes all | 25 | | food sold through a vending machine, except soft drinks and | 26 | | food products that are dispensed hot from a vending machine, |
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| 1 | | regardless of the location of the vending machine. Beginning | 2 | | August 1, 2009, and notwithstanding any other provisions of | 3 | | this Act, "food for human consumption that is to be consumed | 4 | | off the premises where it is sold" includes all food sold | 5 | | through a vending machine, except soft drinks, candy, and food | 6 | | products that are dispensed hot from a vending machine, | 7 | | regardless of the location of the vending machine. | 8 | | Notwithstanding any other provisions of this Act, | 9 | | beginning September 1, 2009, "food for human consumption that | 10 | | is to be consumed off the premises where it is sold" does not | 11 | | include candy. For purposes of this Section, "candy" means a | 12 | | preparation of sugar, honey, or other natural or artificial | 13 | | sweeteners in combination with chocolate, fruits, nuts or | 14 | | other ingredients or flavorings in the form of bars, drops, or | 15 | | pieces. "Candy" does not include any preparation that contains | 16 | | flour or requires refrigeration. | 17 | | Notwithstanding any other provisions of this Act, | 18 | | beginning September 1, 2009, "nonprescription medicines and | 19 | | drugs" does not include grooming and hygiene products. For | 20 | | purposes of this Section, "grooming and hygiene products" | 21 | | includes, but is not limited to, soaps and cleaning solutions, | 22 | | shampoo, toothpaste, mouthwash, antiperspirants, and sun tan | 23 | | lotions and screens, unless those products are available by | 24 | | prescription only, regardless of whether the products meet the | 25 | | definition of "over-the-counter-drugs". For the purposes of | 26 | | this paragraph, "over-the-counter-drug" means a drug for human |
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| 1 | | use that contains a label that identifies the product as a drug | 2 | | as required by 21 CFR 201.66. The "over-the-counter-drug" | 3 | | label includes: | 4 | | (A) a "Drug Facts" panel; or | 5 | | (B) a statement of the "active ingredient(s)" with a | 6 | | list of those ingredients contained in the compound, | 7 | | substance or preparation. | 8 | | Beginning on January 1, 2014 (the effective date of Public | 9 | | Act 98-122), "prescription and nonprescription medicines and | 10 | | drugs" includes medical cannabis purchased from a registered | 11 | | dispensing organization under the Compassionate Use of Medical | 12 | | Cannabis Program Act. | 13 | | Beginning on January 1, 2026, "prescription and | 14 | | nonprescription medicine and drugs" includes cannabis or | 15 | | cannabis-infused products purchased from a dispensing | 16 | | organization under the Cannabis Regulation and Tax Act by a | 17 | | cardholder, as defined under Section 10 of the Compassionate | 18 | | Use of Medical Cannabis Act. | 19 | | As used in this Section, "adult use cannabis" means | 20 | | cannabis subject to tax under the Cannabis Cultivation | 21 | | Privilege Tax Law and the Cannabis Purchaser Excise Tax Law | 22 | | and does not include cannabis or cannabis-infused product sold | 23 | | to a cardholder, as defined under Section 10 of the | 24 | | Compassionate Use of Medical Cannabis Act subject to tax under | 25 | | the Compassionate Use of Medical Cannabis Program Act . | 26 | | (Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20, |
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| 1 | | Section 20-20, eff. 4-19-22; 102-700, Article 60, Section | 2 | | 60-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff. | 3 | | 4-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.) | 4 | | Section 10. The Cannabis Regulation and Tax Act is amended | 5 | | by changing Section 65-10 as follows: | 6 | | (410 ILCS 705/65-10) | 7 | | Sec. 65-10. Tax imposed. | 8 | | (a) Beginning January 1, 2020, a tax is imposed upon | 9 | | purchasers for the privilege of using cannabis at the | 10 | | following rates: | 11 | | (1) Any cannabis, other than a cannabis-infused | 12 | | product, with an adjusted delta-9-tetrahydrocannabinol | 13 | | level at or below 35% shall be taxed at a rate of 10% of | 14 | | the purchase price; | 15 | | (2) Any cannabis, other than a cannabis-infused | 16 | | product, with an adjusted delta-9-tetrahydrocannabinol | 17 | | level above 35% shall be taxed at a rate of 25% of the | 18 | | purchase price; and | 19 | | (3) A cannabis-infused product shall be taxed at a | 20 | | rate of 20% of the purchase price. | 21 | | (b) The purchase of any product that contains any amount | 22 | | of cannabis or any derivative thereof is subject to the tax | 23 | | under subsection (a) of this Section on the full purchase | 24 | | price of the product. |
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| 1 | | (c) The tax imposed under this Section is not imposed on | 2 | | cannabis or cannabis-infused product that is subject to tax | 3 | | under the Compassionate Use of Medical Cannabis Program Act or | 4 | | on cannabis or cannabis-infused product sold to a cardholder, | 5 | | as defined under Section 10 of the Compassionate Use of | 6 | | Medical Cannabis Program Act . The tax imposed by this Section | 7 | | is not imposed with respect to any transaction in interstate | 8 | | commerce, to the extent the transaction may not, under the | 9 | | Constitution and statutes of the United States, be made the | 10 | | subject of taxation by this State. | 11 | | (d) The tax imposed under this Article shall be in | 12 | | addition to all other occupation, privilege, or excise taxes | 13 | | imposed by the State of Illinois or by any municipal | 14 | | corporation or political subdivision thereof. | 15 | | (e) The tax imposed under this Article shall not be | 16 | | imposed on any purchase by a purchaser if the cannabis | 17 | | retailer is prohibited by federal or State Constitution, | 18 | | treaty, convention, statute, or court decision from collecting | 19 | | the tax from the purchaser. | 20 | | (Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.) | 21 | | Section 99. Effective date. This Act takes effect January | 22 | | 1, 2026. |
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