State of Illinois
92nd General Assembly
Legislation

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92_SB0853eng

 
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 1        AN ACT concerning taxes.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Tobacco  Products  Tax  Act  of  1995  is
 5    amended by changing Sections 10-5, 10-10, 10-20, and 10-50 as
 6    follows:

 7        (35 ILCS 143/10-5)
 8        Sec. 10-5.  Definitions. For purposes of this Act:
 9        "Business"  means  any  trade,  occupation,  activity, or
10    enterprise engaged in, at any location  whatsoever,  for  the
11    purpose of selling tobacco products in this State.
12        "Cigarette"  has  the  meaning  ascribed  to  the term in
13    Section 1 of the Cigarette Tax Act.
14        "Correctional Industries program" means a program run  by
15    a  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 located outside
26        of Illinois engaged in the business  of  selling  tobacco
27        products  from  without  this State who sells, exchanges,
28        distributes, ships, or  transports  tobacco  products  to
29        retailers  or consumers located in this State, so long as
30        that manufacturer or wholesaler has or  maintains  within
31        this  State,  directly or by subsidiary, an office, sales
 
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 1        house, or other place of business, or any agent or  other
 2        representative  operating  within  this  State  under the
 3        authority of the person or  subsidiary,  irrespective  of
 4        whether   the   place  of  business  or  agent  or  other
 5        representative   is   located   here    permanently    or
 6        temporarily.
 7             (3)  Any  retailer  who receives tobacco products on
 8        which the tax has not been or will not be paid by another
 9        distributor.
10        "Distributor"  does  not  include  any  person,  wherever
11    resident or located, who makes, manufactures,  or  fabricates
12    tobacco products as part of a Correctional Industries program
13    for  sale  to residents incarcerated in penal institutions or
14    resident patients of a State operated mental health facility.
15        "Manufacturer" means any  person,  wherever  resident  or
16    located,  who manufactures and sells tobacco products, except
17    a person  who  makes,  manufactures,  or  fabricates  tobacco
18    products  as  a part of a Correctional Industries program for
19    sale  to  persons  incarcerated  in  penal  institutions   or
20    resident patients of a State operated mental health facility.
21        "Person" means any natural individual, firm, partnership,
22    association,  joint  stock  company,  joint  venture, limited
23    liability company, or public or private corporation,  however
24    formed,  or  a  receiver,  executor,  administrator, trustee,
25    conservator, or other representative appointed  by  order  of
26    any court.
27        "Place  of  business"  means and includes any place where
28    tobacco products are  sold  or  where  tobacco  products  are
29    manufactured,  stored,  or  kept  for  the purpose of sale or
30    consumption, including any vessel, vehicle, airplane,  train,
31    or vending machine.
32        "Retailer"  means any person in this State engaged in the
33    business of selling tobacco products  to  consumers  in  this
34    State, regardless of quantity or number of sales.
 
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 1        "Sale"  means  any  transfer,  exchange, or barter in any
 2    manner or by any means whatsoever  for  a  consideration  and
 3    includes all sales made by persons.
 4        "Tobacco  products"  means any cigars; cheroots; stogies;
 5    periques; granulated, plug cut, crimp cut, ready rubbed,  and
 6    other  smoking tobacco; snuff or snuff flour; cavendish; plug
 7    and twist  tobacco;  fine-cut  and  other  chewing  tobaccos;
 8    shorts;  refuse  scraps, clippings, cuttings, and sweeping of
 9    tobacco; and other kinds and forms of  tobacco,  prepared  in
10    such  manner  as  to  be suitable for chewing or smoking in a
11    pipe or otherwise, or both for chewing and smoking; but  does
12    not   include   cigarettes   or  tobacco  purchased  for  the
13    manufacture  of  cigarettes  by  cigarette  distributors  and
14    manufacturers defined in the Cigarette Tax  Act  and  persons
15    who make, manufacture, or fabricate cigarettes as a part of a
16    Correctional   Industries   program  for  sale  to  residents
17    incarcerated in penal institutions or resident patients of  a
18    State operated mental health facility.
19        "Wholesale  price"  means  the established list price for
20    which a manufacturer sells tobacco products to a distributor,
21    before  the  allowance  of  any  discount,  trade  allowance,
22    rebate, or  other  reduction.  In  the  absence  of  such  an
23    established  list  price, the manufacturer's invoice price at
24    which  the  manufacturer  sells  the   tobacco   product   to
25    unaffiliated   distributors,   before  any  discounts,  trade
26    allowances, rebates, or other reductions, shall  be  presumed
27    to be the wholesale price.
28        "Wholesaler"  means  any  person,  wherever  resident  or
29    located,  engaged in the business of selling tobacco products
30    to others for the purpose of resale.
31    (Source: P.A. 89-21, eff. 6-6-95.)

32        (35 ILCS 143/10-10)
33        Sec. 10-10.  Tax imposed. On the first day of  the  third
 
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 1    month after the month in which this Act becomes law, a tax is
 2    imposed on any person engaged in business as a distributor of
 3    tobacco  products, as defined in Section 10-5, at the rate of
 4    18% of the  wholesale  price  of  tobacco  products  sold  or
 5    otherwise  disposed  of  to retailers or consumers located in
 6    this State. The tax is in addition to all other occupation or
 7    privilege taxes imposed by the  State  of  Illinois,  by  any
 8    political   subdivision   thereof,   or   by   any  municipal
 9    corporation.  However,  the  tax  is  not  imposed  upon  any
10    activity   in   that   business  in  interstate  commerce  or
11    otherwise, to the extent to  which  that  activity  may  not,
12    under  the Constitution and Statutes of the United States, be
13    made the subject of taxation by this State.  The tax is  also
14    not  imposed on sales made to the United States or any entity
15    thereof.
16        All moneys received by  the  Department  under  this  Act
17    shall  be  paid  into the Long-Term Care Provider Fund of the
18    State Treasury.
19    (Source: P.A. 89-21, eff. 6-6-95.)

20        (35 ILCS 143/10-20)
21        Sec. 10-20.  Licenses.  It  shall  be  unlawful  for  any
22    person  to  engage  in  business  as a distributor of tobacco
23    products in this State within the meaning of this Act without
24    first having obtained a license to do so from the Department.
25    Application for that license shall be made to the  Department
26    in  a  form prescribed and furnished by the Department.  Each
27    applicant for a license shall furnish to the Department on  a
28    form,  signed  and  verified  by the applicant, the following
29    information:
30             (1)  The name of the applicant.
31             (2)  The  address  of  the  location  at  which  the
32        applicant proposes to engage in business as a distributor
33        of tobacco products in this State.
 
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 1             (3)  Other information the Department may reasonably
 2        require.
 3        Except as  otherwise  provided  in  this  Section,  every
 4    applicant  who is required to procure a distributor's license
 5    shall file with his or her application a  joint  and  several
 6    bond.   The  bond  shall  be  executed  to  the Department of
 7    Revenue, with good and sufficient surety or sureties residing
 8    or licensed to do business  within  the  State  of  Illinois,
 9    conditioned  upon  the  true  and  faithful compliance by the
10    licensee with  all  of  the  provisions  of  this  Act.   The
11    Department  shall  fix  the  amount  of  the  bond  for  each
12    applicant,  taking  into  consideration  the  amount of money
13    expected to become due from the  applicant  under  this  Act.
14    The  amount  of  bond  required by the Department shall be an
15    amount that, in  its  opinion,  will  protect  the  State  of
16    Illinois  against  failure  to pay the amount that may become
17    due from the applicant under this Act, but the amount of  the
18    security  required by the Department shall not exceed 3 times
19    the amount of the applicant's average monthly tax  liability,
20    or  $50,000, whichever amount is lower.  The bond, a reissue,
21    or a substitute shall be kept in full force and effect during
22    the  entire  period  covered  by  the  license.   A  separate
23    application for license shall be made, and  bond  filed,  for
24    each  place  of business at which a person who is required to
25    procure  a  distributor's  license  proposes  to  engage   in
26    business as a distributor in Illinois under this Act.
27        The  Department,  upon receipt of an application and bond
28    in proper form,  shall issue to the applicant a license, in a
29    form prescribed by the Department,  which  shall  permit  the
30    applicant  to  whom  it  is issued to engage in business as a
31    distributor at the place shown on  his  or  her  application.
32    The  license shall be issued by the Department without charge
33    or cost to the applicant.  No license issued under  this  Act
34    is   transferable   or  assignable.   The  license  shall  be
 
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 1    conspicuously displayed in the place of business conducted by
 2    the licensee in Illinois under the license.
 3        The bonding requirement in this Section does not apply to
 4    an applicant for  a  distributor's  license  who  is  already
 5    bonded  under  the Cigarette Tax Act or the Cigarette Use Tax
 6    Act. Licenses issued by the Department under this  Act  shall
 7    be  valid  for a period not to exceed one year after issuance
 8    unless sooner revoked, canceled, or suspended as provided  in
 9    this Act.
10        No  license  shall  be  issued  to  any  person who is in
11    default to the State of Illinois for moneys  due  under  this
12    Act or any other tax Act administered by the Department.
13        The  Department may, in its discretion, upon application,
14    authorize the payment of the tax imposed under Section  10-10
15    by  any  distributor or manufacturer not otherwise subject to
16    the tax imposed under this Act who, to  the  satisfaction  of
17    the Department, furnishes adequate security to ensure payment
18    of the tax.  The distributor or manufacturer shall be issued,
19    without  charge,  a  license  to  remit  the  tax.   When  so
20    authorized,  it  shall  be  the  duty  of  the distributor or
21    manufacturer to remit the  tax  imposed  upon  the  wholesale
22    price  of  tobacco  products sold or otherwise disposed of to
23    retailers or consumers located in this  State,  in  the  same
24    manner  and  subject  to the same requirements as any other a
25    distributor or manufacturer licensed under this Act operating
26    within this State.
27        Any person aggrieved by any decision  of  the  Department
28    under  this  Section may, within 20 days after notice of that
29    decision,  protest  and  request  a  hearing,  whereupon  the
30    Department must give notice to that person of  the  time  and
31    place  fixed  for  the  hearing  and  must  hold a hearing in
32    conformity with the provisions of this Act and then issue its
33    final administrative decision in the matter to  that  person.
34    In  the  absence  of  such  a  protest  within  20  days, the
 
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 1    Department's  decision  becomes  final  without  any  further
 2    determination being made or notice given.
 3    (Source: P.A. 89-21, eff. 6-6-95.)

 4        (35 ILCS 143/10-50)
 5        Sec. 10-50.  Violations and penalties.  When  the  amount
 6    due  is  under  $300,  any  distributor  who  fails to file a
 7    return, wilfully fails or refuses to make any payment to  the
 8    Department  of  the  tax  imposed  by  this  Act,  or files a
 9    fraudulent return, or any officer or agent of  a  corporation
10    engaged  in  the business of distributing tobacco products to
11    retailers and consumers located in this  State  who  signs  a
12    fraudulent  return filed on behalf of the corporation, or any
13    accountant  or  other  agent  who  knowingly   enters   false
14    information  on  the return of any taxpayer under this Act is
15    guilty of a Class 4 felony.
16        Any person who violates any provision of Section 10-20 of
17    this Act, fails to keep books and records as  required  under
18    this  Act,  or  wilfully violates a rule or regulation of the
19    Department for the administration and enforcement of this Act
20    is guilty of a Class 4 felony.  A person commits  a  separate
21    offense  on  each  day  that he or she engages in business in
22    violation of Section 10-20 of this Act.
23        When the amount due is under $300, any person who accepts
24    money that is due to the Department under  this  Act  from  a
25    taxpayer for the purpose of acting as the taxpayer's agent to
26    make  the  payment  to the Department, but who fails to remit
27    the payment to the Department when due, is guilty of a  Class
28    4 felony.
29        When  the amount due is $300 or more, any distributor who
30    files, or causes to be filed, a  fraudulent  return,  or  any
31    officer  or agent of a corporation engaged in the business of
32    distributing tobacco  products  to  retailers  and  consumers
33    located  in  this  State  who  files or causes to be filed or
 
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 1    signs or causes to be signed a  fraudulent  return  filed  on
 2    behalf  of  the corporation, or any accountant or other agent
 3    who knowingly enters false information on the return  of  any
 4    taxpayer under this Act is guilty of a Class 3 felony.
 5        When  the  amount due is $300 or more, any person engaged
 6    in the business of distributing tobacco products to retailers
 7    and consumers located in this  State  who  fails  to  file  a
 8    return,  wilfully fails or refuses to make any payment to the
 9    Department of the tax imposed by this Act, or  accepts  money
10    that  is due to the Department under this Act from a taxpayer
11    for the purpose of acting as the  taxpayer's  agent  to  make
12    payment  to the Department but fails to remit such payment to
13    the Department when due is guilty of a Class 3 felony.
14        Any person whose principal place of business is  in  this
15    State  and who is charged with a violation under this Section
16    shall be tried in the county where his or her principal place
17    of business is located unless he or she asserts a right to be
18    tried in another venue. If the taxpayer does not have his  or
19    her  principal  place of business in this State, however, the
20    hearing must be held in Sangamon County unless  the  taxpayer
21    asserts a right to be tried in another venue.
22        Any  taxpayer  or agent of a taxpayer who with the intent
23    to defraud purports to make a payment due to  the  Department
24    by  issuing  or delivering a check or other order upon a real
25    or fictitious depository for the payment  of  money,  knowing
26    that  it  will  not be paid by the depository, is guilty of a
27    deceptive practice  in  violation  of  Section  17-1  of  the
28    Criminal Code of 1961.
29        A  prosecution  for a violation described in this Section
30    may be commenced within 3 years after the commission  of  the
31    act constituting the violation.
32    (Source: P.A. 89-21, eff. 6-6-95.)

33        Section  99.  Effective date.  This Act takes effect upon
 
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 1    becoming law.

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