Public Act 096-0782
 
SB0451 Enrolled LRB096 06559 RCE 16643 b

    AN ACT concerning revenue.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Cigarette Tax Act is amended by changing
Sections 1, 3, 3-10, 4, 4b, 4d, 9c, 18, 18a, 18b, 18c, 20, and
24 and by adding Section 28a as follows:
 
    (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
    Sec. 1. For the purposes of this Act:
    "Brand Style" means a variety of cigarettes distinguished
by the tobacco used, tar and nicotine content, flavoring used,
size of the cigarette, filtration on the cigarette or
packaging.
    "Cigarette", means any roll for smoking made wholly or in
part of tobacco irrespective of size or shape and whether or
not such tobacco is flavored, adulterated or mixed with any
other ingredient, and the wrapper or cover of which is made of
paper or any other substance or material except tobacco.
    "Contraband cigarettes" means:
        (a) cigarettes that do not bear a required tax stamp
    under this Act;
        (b) cigarettes for which any required federal taxes
    have not been paid;
        (c) cigarettes that bear a counterfeit tax stamp;
        (d) cigarettes that are manufactured, fabricated,
    assembled, processed, packaged, or labeled by any person
    other than (i) the owner of the trademark rights in the
    cigarette brand or (ii) a person that is directly or
    indirectly authorized by such owner;
        (e) cigarettes imported into the United States, or
    otherwise distributed, in violation of the federal
    Imported Cigarette Compliance Act of 2000 (Title IV of
    Public Law 106-476); or
        (f) cigarettes that have false manufacturing labels; .
        (g) cigarettes identified in Section 3-10(a)(1) of
    this Act; or
        (h) cigarettes that are improperly tax stamped,
    including cigarettes that bear a tax stamp of another state
    or taxing jurisdiction.
    "Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, however formed, limited liability
company, or a receiver, executor, administrator, trustee,
guardian or other representative appointed by order of any
court.
    "Prior Continuous Compliance Taxpayer" means any person
who is licensed under this Act and who, having been a licensee
for a continuous period of 5 years, is determined by the
Department not to have been either delinquent or deficient in
the payment of tax liability during that period or otherwise in
violation of this Act. Also, any taxpayer who has, as verified
by the Department, continuously complied with the condition of
his bond or other security under provisions of this Act for a
period of 5 consecutive years shall be considered to be a
"Prior continuous compliance taxpayer". In calculating the
consecutive period of time described herein for qualification
as a "prior continuous compliance taxpayer", a consecutive
period of time of qualifying compliance immediately prior to
the effective date of this amendatory Act of 1987 shall be
credited to any licensee who became licensed on or before the
effective date of this amendatory Act of 1987.
    "Department" means the Department of Revenue.
    "Sale" means any transfer, exchange or barter in any manner
or by any means whatsoever for a consideration, and includes
and means all sales made by any person.
    "Original Package" means the individual packet, box or
other container whatsoever used to contain and to convey
cigarettes to the consumer.
    "Distributor" means any and each of the following:
    (1) Any person engaged in the business of selling
cigarettes in this State who brings or causes to be brought
into this State from without this State any original packages
of cigarettes, on which original packages there is no
authorized evidence underneath a sealed transparent wrapper
showing that the tax liability imposed by this Act has been
paid or assumed by the out-of-State seller of such cigarettes,
for sale or other disposition in the course of such business.
    (2) Any person who makes, manufactures or fabricates
cigarettes in this State for sale in this State, except a
person who makes, manufactures or fabricates cigarettes as a
part of a correctional industries program for sale to residents
incarcerated in penal institutions or resident patients of a
State-operated mental health facility.
    (3) Any person who makes, manufactures or fabricates
cigarettes outside this State, which cigarettes are placed in
original packages contained in sealed transparent wrappers,
for delivery or shipment into this State, and who elects to
qualify and is accepted by the Department as a distributor
under Section 4b of this Act.
    "Place of business" shall mean and include any place where
cigarettes are sold or where cigarettes are manufactured,
stored or kept for the purpose of sale or consumption,
including any vessel, vehicle, airplane, train or vending
machine.
    "Business" means any trade, occupation, activity or
enterprise engaged in for the purpose of selling cigarettes in
this State.
    "Retailer" means any person who engages in the making of
transfers of the ownership of, or title to, cigarettes to a
purchaser for use or consumption and not for resale in any
form, for a valuable consideration. "Retailer" does not include
a person:
        (1) who transfers to residents incarcerated in penal
    institutions or resident patients of a State-operated
    mental health facility ownership of cigarettes made,
    manufactured, or fabricated as part of a correctional
    industries program; or
        (2) who transfers cigarettes to a not-for-profit
    research institution that conducts tests concerning the
    health effects of tobacco products and who does not offer
    the cigarettes for resale.
    "Retailer" shall be construed to include any person who
engages in the making of transfers of the ownership of, or
title to, cigarettes to a purchaser, for use or consumption by
any other person to whom such purchaser may transfer the
cigarettes without a valuable consideration, except a person
who transfers to residents incarcerated in penal institutions
or resident patients of a State-operated mental health facility
ownership of cigarettes made, manufactured or fabricated as
part of a correctional industries program.
    "Stamp" or "stamps" mean the indicia required to be affixed
on a pack of cigarettes that evidence payment of the tax on
cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
indicia used to indicate that the cigarettes are intended for a
sale or distribution within this State that is exempt from
State tax under any applicable provision of law.
    "Within this State" means within the exterior limits of the
State of Illinois and includes all territory within these
limits owned by or ceded to the United States of America.
    "Related party" means any person that is associated with
any other person because he or she:
        (a) is an officer or director of a business; or
        (b) is legally recognized as a partner in business. ;
    or
        (c) is directly or indirectly controlled by another.
(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/3)  (from Ch. 120, par. 453.3)
    Sec. 3. Affixing tax stamp; remitting tax to the
Department. Payment of the taxes imposed by Section 2 of this
Act shall (except as hereinafter provided) be evidenced by
revenue tax stamps affixed to each original package of
cigarettes. Each distributor of cigarettes, before delivering
or causing to be delivered any original package of cigarettes
in this State to a purchaser, shall firmly affix a proper stamp
or stamps to each such package, or (in case of manufacturers of
cigarettes in original packages which are contained inside a
sealed transparent wrapper) shall imprint the required
language on the original package of cigarettes beneath such
outside wrapper, as hereinafter provided. Any stamp required by
this Act shall note whether the State tax under Section 2 of
this Act (35 ILCS 130/2) was paid.
    No stamp or imprint may be affixed to, or made upon, any
package of cigarettes unless that package complies with all
requirements of the federal Cigarette Labeling and Advertising
Act, 15 U.S.C. 1331 and following, for the placement of labels,
warnings, or any other information upon a package of cigarettes
that is sold within the United States. Under the authority of
Section 6, the Department shall revoke the license of any
distributor that is determined to have violated this paragraph.
A person may not affix a stamp on a package of cigarettes,
cigarette papers, wrappers, or tubes if that individual package
has been marked for export outside the United States with a
label or notice in compliance with Section 290.185 of Title 27
of the Code of Federal Regulations. It is not a defense to a
proceeding for violation of this paragraph that the label or
notice has been removed, mutilated, obliterated, or altered in
any manner.
    Only distributors licensed under this Act and
transporters, as defined in Section 9c of this Act, may possess
or out-of-state manufacturers holding a permit under this Act
may receive unstamped original packages packs of cigarettes.
Prior to shipment to an Illinois retailer, a stamp shall be
applied to each original package of cigarettes sold to the
retailer. A distributor may apply tax stamps only to original
packages of cigarettes purchased or obtained directly from an
in-state maker, manufacturer, or fabricator licensed as a
distributor under Section 4 of this Act or an out-of-state
maker, manufacturer, or fabricator holding a permit under
Section 4b of this Act. A another person, each licensed
distributor or out-of-state manufacturer holding a permit
shall apply a stamp to each pack of cigarettes imported,
distributed, or sold whether or not such cigarettes are subject
to State tax under Section 2 of this Act (35 ILCS 130/2) or any
other provision of State law, provided that a distributor or
out-of-state manufacturer may only apply a tax stamp to a pack
of cigarettes purchased or obtained directly from a licensed
distributor or an out-of-state manufacturer holding a permit.
Only a licensed distributor or an out-of-state manufacturer
holding a permit may ship or otherwise cause to be delivered
unstamped original packages packs of cigarettes in, into, or
from this State. A , provided that a licensed distributor or an
out-of-state manufacturer holding a permit may transport
unstamped original packages packs of cigarettes to a facility,
wherever located, owned or controlled by such distributor;
however, a distributor may not transport unstamped original
packages of cigarettes to a facility where retail sales of
cigarettes take place or manufacturer. Any licensed
distributor person that ships or otherwise causes to be
delivered unstamped original packages packs of cigarettes
into, within, or from this State shall ensure that the invoice
or equivalent documentation and the bill of lading or freight
bill for the shipment identifies the true name and address of
the consignor cosignor or seller, the true name and address of
the consignee cosignee or purchaser, and the quantity by brand
style of the cigarettes so transported, provided that this
Section shall not be construed as to impose any requirement or
liability upon any common or contract carrier.
    The Department, or any person authorized by the Department,
shall sell such stamps only to persons holding valid licenses
as distributors under this Act. On and after July 1, 2003,
payment for such stamps must be made by means of electronic
funds transfer. The Department may refuse to sell stamps to any
person who does not comply with the provisions of this Act.
Beginning on the effective date of this amendatory Act of the
92nd General Assembly and through June 30, 2002, persons
holding valid licenses as distributors may purchase cigarette
tax stamps up to an amount equal to 115% of the distributor's
average monthly cigarette tax stamp purchases over the 12
calendar months prior to the effective date of this amendatory
Act of the 92nd General Assembly.
    Prior to December 1, 1985, the Department shall allow a
distributor 21 days in which to make final payment of the
amount to be paid for such stamps, by allowing the distributor
to make payment for the stamps at the time of purchasing them
with a draft which shall be in such form as the Department
prescribes, and which shall be payable within 21 days
thereafter: Provided that such distributor has filed with the
Department, and has received the Department's approval of, a
bond, which is in addition to the bond required under Section 4
of this Act, payable to the Department in an amount equal to
80% of such distributor's average monthly tax liability to the
Department under this Act during the preceding calendar year or
$500,000, whichever is less. The Bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of credit.
The bond shall be conditioned upon the distributor's payment of
amount of any 21-day draft which the Department accepts from
that distributor for the delivery of stamps to that distributor
under this Act. The distributor's failure to pay any such
draft, when due, shall also make such distributor automatically
liable to the Department for a penalty equal to 25% of the
amount of such draft.
    On and after December 1, 1985 and until July 1, 2003, the
Department shall allow a distributor 30 days in which to make
final payment of the amount to be paid for such stamps, by
allowing the distributor to make payment for the stamps at the
time of purchasing them with a draft which shall be in such
form as the Department prescribes, and which shall be payable
within 30 days thereafter, and beginning on January 1, 2003 and
thereafter, the draft shall be payable by means of electronic
funds transfer: Provided that such distributor has filed with
the Department, and has received the Department's approval of,
a bond, which is in addition to the bond required under Section
4 of this Act, payable to the Department in an amount equal to
150% of such distributor's average monthly tax liability to the
Department under this Act during the preceding calendar year or
$750,000, whichever is less, except that as to bonds filed on
or after January 1, 1987, such additional bond shall be in an
amount equal to 100% of such distributor's average monthly tax
liability under this Act during the preceding calendar year or
$750,000, whichever is less. The bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of credit.
The bond shall be conditioned upon the distributor's payment of
the amount of any 30-day draft which the Department accepts
from that distributor for the delivery of stamps to that
distributor under this Act. The distributor's failure to pay
any such draft, when due, shall also make such distributor
automatically liable to the Department for a penalty equal to
25% of the amount of such draft.
    Every prior continuous compliance taxpayer shall be exempt
from all requirements under this Section concerning the
furnishing of such bond, as defined in this Section, as a
condition precedent to his being authorized to engage in the
business licensed under this Act. This exemption shall continue
for each such taxpayer until such time as he may be determined
by the Department to be delinquent in the filing of any
returns, or is determined by the Department (either through the
Department's issuance of a final assessment which has become
final under the Act, or by the taxpayer's filing of a return
which admits tax to be due that is not paid) to be delinquent
or deficient in the paying of any tax under this Act, at which
time that taxpayer shall become subject to the bond
requirements of this Section and, as a condition of being
allowed to continue to engage in the business licensed under
this Act, shall be required to furnish bond to the Department
in such form as provided in this Section. Such taxpayer shall
furnish such bond for a period of 2 years, after which, if the
taxpayer has not been delinquent in the filing of any returns,
or delinquent or deficient in the paying of any tax under this
Act, the Department may reinstate such person as a prior
continuance compliance taxpayer. Any taxpayer who fails to pay
an admitted or established liability under this Act may also be
required to post bond or other acceptable security with the
Department guaranteeing the payment of such admitted or
established liability.
    Any person aggrieved by any decision of the Department
under this Section may, within the time allowed by law, protest
and request a hearing, whereupon the Department shall give
notice and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to such person. In the absence of such a
protest filed within the time allowed by law, the Department's
decision shall become final without any further determination
being made or notice given.
    The Department shall discharge any surety and shall release
and return any bond or security deposited, assigned, pledged,
or otherwise provided to it by a taxpayer under this Section
within 30 days after:
    (1) Such taxpayer becomes a prior continuous compliance
taxpayer; or
    (2) Such taxpayer has ceased to collect receipts on which
he is required to remit tax to the Department, has filed a
final tax return, and has paid to the Department an amount
sufficient to discharge his remaining tax liability as
determined by the Department under this Act. The Department
shall make a final determination of the taxpayer's outstanding
tax liability as expeditiously as possible after his final tax
return has been filed. If the Department cannot make such final
determination within 45 days after receiving the final tax
return, within such period it shall so notify the taxpayer,
stating its reasons therefor.
    The Department may authorize distributors to affix revenue
tax stamps by imprinting tax meter stamps upon original
packages of cigarettes. The Department shall adopt rules and
regulations relating to the imprinting of such tax meter stamps
as will result in payment of the proper taxes as herein
imposed. No distributor may affix revenue tax stamps to
original packages of cigarettes by imprinting tax meter stamps
thereon unless such distributor has first obtained permission
from the Department to employ this method of affixation. The
Department shall regulate the use of tax meters and may, to
assure the proper collection of the taxes imposed by this Act,
revoke or suspend the privilege, theretofore granted by the
Department to any distributor, to imprint tax meter stamps upon
original packages of cigarettes.
    Illinois cigarette manufacturers who place their
cigarettes in original packages which are contained inside a
sealed transparent wrapper, and similar out-of-State cigarette
manufacturers who elect to qualify and are accepted by the
Department as distributors under Section 4b(a) of this Act,
shall pay the taxes imposed by this Act by remitting the amount
thereof to the Department by the 5th day of each month covering
cigarettes shipped or otherwise delivered in Illinois to
purchasers during the preceding calendar month. Such
manufacturers of cigarettes in original packages which are
contained inside a sealed transparent wrapper, before
delivering such cigarettes or causing such cigarettes to be
delivered in this State to purchasers, shall evidence their
obligation to remit the taxes due with respect to such
cigarettes by imprinting language to be prescribed by the
Department on each original package of such cigarettes
underneath the sealed transparent outside wrapper of such
original package, in such place thereon and in such manner as
the Department may designate. Such imprinted language shall
acknowledge the manufacturer's payment of or liability for the
tax imposed by this Act with respect to the distribution of
such cigarettes.
    A distributor shall not affix, or cause to be affixed, any
stamp or imprint to a package of cigarettes, as provided for in
this Section, if the tobacco product manufacturer, as defined
in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
that made or sold the cigarettes has failed to become a
participating manufacturer, as defined in subdivision (a)(1)
of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
or has failed to create a qualified escrow fund for any
cigarettes manufactured by the tobacco product manufacturer
and sold in this State or otherwise failed to bring itself into
compliance with subdivision (a)(2) of Section 15 of the Tobacco
Product Manufacturers' Escrow Act.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/3-10)
    Sec. 3-10. Cigarette enforcement.
    (a) Prohibitions. It is unlawful for any person:
        (1) to sell or distribute in this State; to acquire,
    hold, own, possess, or transport, for sale or distribution
    in this State; or to import, or cause to be imported into
    this State for sale or distribution in this State:
            (A) any cigarettes the package of which:
                (i) bears any statement, label, stamp,
            sticker, or notice indicating that the
            manufacturer did not intend the cigarettes to be
            sold, distributed, or used in the United States,
            including but not limited to labels stating "For
            Export Only", "U.S. Tax Exempt", "For Use Outside
            U.S.", or similar wording; or
                (ii) does not comply with:
                    (aa) all requirements imposed by or
                pursuant to federal law regarding warnings and
                other information on packages of cigarettes
                manufactured, packaged, or imported for sale,
                distribution, or use in the United States,
                including but not limited to the precise
                warning labels specified in the federal
                Cigarette Labeling and Advertising Act, 15
                U.S.C. 1333; and
                    (bb) all federal trademark and copyright
                laws;
            (B) any cigarettes imported into the United States
        in violation of 26 U.S.C. 5754 or any other federal
        law, or implementing federal regulations;
            (C) any cigarettes that such person otherwise
        knows or has reason to know the manufacturer did not
        intend to be sold, distributed, or used in the United
        States; or
            (D) any cigarettes for which there has not been
        submitted to the Secretary of the U.S. Department of
        Health and Human Services the list or lists of the
        ingredients added to tobacco in the manufacture of the
        cigarettes required by the federal Cigarette Labeling
        and Advertising Act, 15 U.S.C. 1335a;
        (2) to alter the package of any cigarettes, prior to
    sale or distribution to the ultimate consumer, so as to
    remove, conceal, or obscure:
            (A) any statement, label, stamp, sticker, or
        notice described in subdivision (a)(1)(A)(i) of this
        Section;
            (B) any health warning that is not specified in, or
        does not conform with the requirements of, the federal
        Cigarette Labeling and Advertising Act, 15 U.S.C.
        1333; or
        (3) to affix any stamp required pursuant to this Act to
    the package of any cigarettes described in subdivision
    (a)(1) of this Section or altered in violation of
    subdivision (a)(2). ; or
        (4) to knowingly possess, or possess for sale,
    contraband cigarettes.
    (b) Documentation. On the first business day of each month,
each person licensed to affix the State tax stamp to cigarettes
shall file with the Department, for all cigarettes imported
into the United States to which the person has affixed the tax
stamp in the preceding month:
        (1) a copy of:
            (A) the permit issued pursuant to the Internal
        Revenue Code, 26 U.S.C. 5713, to the person importing
        the cigarettes into the United States allowing the
        person to import the cigarettes; and
            (B) the customs form containing, with respect to
        the cigarettes, the internal revenue tax information
        required by the U.S. Bureau of Alcohol, Tobacco and
        Firearms;
        (2) a statement, signed by the person under penalty of
    perjury, which shall be treated as confidential by the
    Department and exempt from disclosure under the Freedom of
    Information Act, identifying the brand and brand styles of
    all such cigarettes, the quantity of each brand style of
    such cigarettes, the supplier of such cigarettes, and the
    person or persons, if any, to whom such cigarettes have
    been conveyed for resale; and a separate statement, signed
    by the individual under penalty of perjury, which shall not
    be treated as confidential or exempt from disclosure,
    separately identifying the brands and brand styles of such
    cigarettes; and
        (3) a statement, signed by an officer of the
    manufacturer or importer under penalty of perjury,
    certifying that the manufacturer or importer has complied
    with:
            (A) the package health warning and ingredient
        reporting requirements of the federal Cigarette
        Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
        with respect to such cigarettes; and
            (B) the provisions of Exhibit T of the Master
        Settlement Agreement entered in the case of People of
        the State of Illinois v. Philip Morris, et al. (Circuit
        Court of Cook County, No. 96-L13146), including a
        statement indicating whether the manufacturer is, or
        is not, a participating tobacco manufacturer within
        the meaning of Exhibit T.
    (c) Administrative sanctions.
        (1) Upon finding that a distributor or person has
    committed any of the acts prohibited by subsection (a),
    knowing or having reason to know that he or she has done
    so, or has failed to comply with any requirement of
    subsection (b), the Department may revoke or suspend the
    license or licenses of any distributor pursuant to the
    procedures set forth in Section 6 and impose on the
    distributor, or on the person, a civil penalty in an amount
    not to exceed the greater of 500% of the retail value of
    the cigarettes involved or $5,000.
        (2) Cigarettes that are acquired, held, owned,
    possessed, transported in, imported into, or sold or
    distributed in this State in violation of this Section
    shall be deemed contraband under this Act and are subject
    to seizure and forfeiture as provided in this Act, and all
    such cigarettes seized and forfeited shall be destroyed or
    maintained and used in an undercover capacity. Such
    cigarettes shall be deemed contraband whether the
    violation of this Section is knowing or otherwise.
    (d) Unfair trade practices. In addition to any other
penalties provided for in this Act, a A violation of subsection
(a) or subsection (b) of this Section shall constitute an
unlawful practice as provided in the Consumer Fraud and
Deceptive Business Practices Act.
    (d-1) Retailers shall not be liable under subsections
(c)(1) and (d) of this Section for unknowingly possessing,
selling, or distributing to consumers or users cigarettes
identified in subsection (a)(1) of this Section if the
cigarettes possessed, sold, or distributed by the retailer were
obtained from a distributor licensed under this Act.
    (e) Unfair cigarette sales. For purposes of the Trademark
Registration and Protection Act and the Counterfeit Trademark
Act, cigarettes imported or reimported into the United States
for sale or distribution under any trade name, trade dress, or
trademark that is the same as, or is confusingly similar to,
any trade name, trade dress, or trademark used for cigarettes
manufactured in the United States for sale or distribution in
the United States shall be presumed to have been purchased
outside of the ordinary channels of trade.
    (f) General provisions.
        (1) This Section shall be enforced by the Department;
    provided that, at the request of the Director of Revenue or
    the Director's duly authorized agent, the State police and
    all local police authorities shall enforce the provisions
    of this Section. The Attorney General has concurrent power
    with the State's Attorney of any county to enforce this
    Section.
        (2) For the purpose of enforcing this Section, the
    Director of Revenue and any agency to which the Director
    has delegated enforcement responsibility pursuant to
    subdivision (f)(1) may request information from any State
    or local agency and may share information with and request
    information from any federal agency and any agency of any
    other state or any local agency of any other state.
        (3) In addition to any other remedy provided by law,
    including enforcement as provided in subdivision (a)(1),
    any person may bring an action for appropriate injunctive
    or other equitable relief for a violation of this Section;
    actual damages, if any, sustained by reason of the
    violation; and, as determined by the court, interest on the
    damages from the date of the complaint, taxable costs, and
    reasonable attorney's fees. If the trier of fact finds that
    the violation is flagrant, it may increase recovery to an
    amount not in excess of 3 times the actual damages
    sustained by reason of the violation.
    (g) Definitions. As used in this Section:
    "Importer" means that term as defined in 26 U.S.C. 5702(1).
    "Package" means that term as defined in 15 U.S.C. 1332(4).
    (h) Applicability.
        (1) This Section does not apply to:
            (A) cigarettes allowed to be imported or brought
        into the United States for personal use; and
            (B) cigarettes sold or intended to be sold as
        duty-free merchandise by a duty-free sales enterprise
        in accordance with the provisions of 19 U.S.C. 1555(b)
        and any implementing regulations; except that this
        Section shall apply to any such cigarettes that are
        brought back into the customs territory for resale
        within the customs territory.
        (2) The penalties provided in this Section are in
    addition to any other penalties imposed under other
    provision of law.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/4)  (from Ch. 120, par. 453.4)
    Sec. 4. Distributor's license. No person may engage in
business as a distributor of cigarettes in this State within
the meaning of the first 2 definitions of distributor in
Section 1 of this Act without first having obtained a license
therefor from the Department. Application for license shall be
made to the Department in form as furnished and prescribed by
the Department. Each applicant for a license under this Section
shall furnish to the Department on the form signed and verified
by the applicant under penalty of perjury the following
information:
        (a) The name and address of the applicant;
        (b) The address of the location at which the applicant
    proposes to engage in business as a distributor of
    cigarettes in this State;
        (c) Such other additional information as the
    Department may lawfully require by its rules and
    regulations.
    The annual license fee payable to the Department for each
distributor's license shall be $250. The purpose of such annual
license fee is to defray the cost, to the Department, of
serializing cigarette tax stamps. Each applicant for license
shall pay such fee to the Department at the time of submitting
his application for license to the Department.
    Every applicant who is required to procure a distributor's
license shall file with his application a joint and several
bond. Such bond shall be executed to the Department of Revenue,
with good and sufficient surety or sureties residing or
licensed to do business within the State of Illinois, in the
amount of $2,500, conditioned upon the true and faithful
compliance by the licensee with all of the provisions of this
Act. Such bond, or a reissue thereof, or a substitute therefor,
shall be kept in effect during the entire period covered by the
license. A separate application for license shall be made, a
separate annual license fee paid, and a separate bond filed,
for each place of business at which a person who is required to
procure a distributor's license under this Section proposes to
engage in business as a distributor in Illinois under this Act.
    The following are ineligible to receive a distributor's
license under this Act:
            (1) a person who is not of good character and
        reputation in the community in which he resides;
            (2) a person who has been convicted of a felony
        under any Federal or State law, if the Department,
        after investigation and a hearing, if requested by the
        applicant, determines that such person has not been
        sufficiently rehabilitated to warrant the public
        trust;
            (3) a corporation, if any officer, manager or
        director thereof, or any stockholder or stockholders
        owning in the aggregate more than 5% of the stock of
        such corporation, would not be eligible to receive a
        license under this Act for any reason; .
            (4) a person, or any person who owns more than 15
        percent of the ownership interests in a person or a
        related party who:
                (a) owes, at the time of application, any $500
            or more in delinquent cigarette taxes that have
            been determined by law to be due and unpaid, unless
            the license applicant has entered into an
            agreement approved by the Department to pay the
            amount due;
                (b) had a license under this Act revoked within
            the past two years by the Department for willful
            misconduct relating to stolen or contraband
            cigarettes or has been convicted of a State or
            federal crime, punishable by imprisonment of one
            year or more, relating to stolen or contraband
            cigarettes;
                (c) is a distributor who manufactures
            cigarettes, whether in this State or out of this
            State, and who is neither (i) a participating
            manufacturer as defined in subsection II(jj) of
            the "Master Settlement Agreement" as defined in
            Sections 10 of the Tobacco Products Manufacturers'
            Escrow Act and the Tobacco Products Manufacturers'
            Escrow Enforcement Act of 2003 (30 ILCS 168/10 and
            30 ILCS 167/10); nor (ii) in full compliance with
            Tobacco Products Manufacturers' Escrow Act and the
            Tobacco Products Manufacturers' Escrow Enforcement
            Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);
                (d) has been found by the Department, after
            notice and a hearing, to have willfully imported or
            caused to be imported into the United States for
            sale or distribution any cigarette in violation of
            19 U.S.C. 1681a;
                (e) has been found by the Department, after
            notice and a hearing, to have willfully imported or
            caused to be imported into the United States for
            sale or distribution or manufactured for sale or
            distribution in the United States any cigarette
            that does not fully comply with the Federal
            Cigarette Labeling and Advertising Act (15 U.S.C.
            1331, et seq.); or
                (f) has been found by the Department, after
            notice and a hearing, to have willfully made a
            material false statement in the application or has
            willfully failed to produce records required to be
            maintained by this Act.
    The Department, upon receipt of an application, license fee
and bond in proper form, from a person who is eligible to
receive a distributor's license under this Act, shall issue to
such applicant a license in form as prescribed by the
Department, which license shall permit the applicant to which
it is issued to engage in business as a distributor at the
place shown in his application. All licenses issued by the
Department under this Act shall be valid for not to exceed one
year after issuance unless sooner revoked, canceled or
suspended as provided in this Act. No license issued under this
Act is transferable or assignable. Such license shall be
conspicuously displayed in the place of business conducted by
the licensee in Illinois under such license. No distributor
licensee acquires any vested interest or compensable property
right in a license issued under this Act.
    A licensed distributor shall notify the Department of any
change in the information contained on the application form,
including any change in ownership and shall do so within 30
days after any such change.
    Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to the
person requesting the hearing of the time and place fixed for
the hearing and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to that person. In the absence of a
protest and request for a hearing within 20 days, the
Department's decision shall become final without any further
determination being made or notice given.
(Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
    (35 ILCS 130/4b)  (from Ch. 120, par. 453.4b)
    Sec. 4b.
    (a) The Department may, in its discretion, upon
application, issue permits authorizing the payment of the tax
herein imposed by out-of-State cigarette manufacturers who are
not required to be licensed as distributors of cigarettes in
this State, but who elect to qualify under this Act as
distributors of cigarettes in this State, and who, to the
satisfaction of the Department, furnish adequate security to
insure payment of the tax, provided that any such permit shall
extend only to cigarettes which such permittee manufacturer
places in original packages that are contained inside a sealed
transparent wrapper. Such permits shall be issued without
charge in such form as the Department may prescribe and shall
not be transferable or assignable.
    The following are ineligible to receive a distributor's
permit under this subsection Act:
    (1) a person who is not of good character and reputation in
the community in which he resides;
    (2) a person who has been convicted of a felony under any
Federal or State law, if the Department, after investigation
and a hearing, if requested by the applicant, determines that
such person has not been sufficiently rehabilitated to warrant
the public trust;
    (3) a corporation, if any officer, manager or director
thereof, or any stockholder or stockholders owning in the
aggregate more than 5% of the stock of such corporation, would
not be eligible to receive a permit under this Act for any
reason.
    With respect to cigarettes which come within the scope of
such a permit and which any such permittee delivers or causes
to be delivered in Illinois to licensed distributors
purchasers, such permittee shall remit the tax imposed by this
Act at the times provided for in Section 3 of this Act. Each
such remittance shall be accompanied by a return filed with the
Department on a form to be prescribed and furnished by the
Department and shall disclose such information as the
Department may lawfully require. The Department may promulgate
rules to require that the permittee's return be accompanied by
appropriate computer-generated magnetic media supporting
schedule data in the format prescribed by the Department,
unless, as provided by rule, the Department grants an exception
upon petition of the permittee. Each such return shall be
accompanied by a copy of each invoice rendered by the permittee
to any licensed distributor purchaser to whom the permittee
delivered cigarettes of the type covered by the permit (or
caused cigarettes of the type covered by the permit to be
delivered) in Illinois during the period covered by such
return.
    Such permit may be suspended, canceled or revoked when, at
any time, the Department considers that the security given is
inadequate, or that such tax can more effectively be collected
from distributors located in this State, or whenever the
permittee violates any provision of this Act or any lawful rule
or regulation issued by the Department pursuant to this Act or
is determined to be ineligible for a distributor's permit under
this Act as provided in this Section, whenever the permittee
shall notify the Department in writing of his desire to have
the permit canceled. The Department shall have the power, in
its discretion, to issue a new permit after such suspension,
cancellation or revocation, except when the person who would
receive the permit is ineligible to receive a distributor's
permit under this Act.
    All permits issued by the Department under this Act shall
be valid for not to exceed one year after issuance unless
sooner revoked, canceled or suspended as in this Act provided.
    (b) Out-of-state cigarette manufacturers who are not
required to be licensed as distributors of cigarettes in this
State and who do not elect to obtain approval under subsection
4b(a) to pay the tax imposed by this Act, but who elect to
qualify under this Act as distributors of cigarettes in this
State for purposes of shipping and delivering unstamped
original packages of cigarettes into this State to licensed
distributors, shall obtain a permit from the Department. These
permits shall be issued without charge in such form as the
Department may prescribe and shall not be transferable or
assignable.
    The following are ineligible to receive a distributor's
permit under this subsection:
        (1) a person who is not of good character and
    reputation in the community in which he or she resides;
        (2) a person who has been convicted of a felony under
    any federal or State law, if the Department, after
    investigation and a hearing, if requested by the applicant,
    determines that the person has not been sufficiently
    rehabilitated to warrant the public trust; and
        (3) a corporation, if any officer, manager, or director
    thereof, or any stockholder or stockholders owning in the
    aggregate more than 5% of the stock of the corporation,
    would not be eligible to receive a permit under this Act
    for any reason.
    With respect to original packages of cigarettes that such
permittee delivers or causes to be delivered in Illinois and
distributes to the public for promotional purposes without
consideration, the permittee shall pay the tax imposed by this
Act by remitting the amount thereof to the Department by the
5th day of each month covering cigarettes shipped or otherwise
delivered in Illinois for those purposes during the preceding
calendar month. The permittee, before delivering those
cigarettes or causing those cigarettes to be delivered in this
State, shall evidence his or her obligation to remit the taxes
due with respect to those cigarettes by imprinting language to
be prescribed by the Department on each original package of
cigarettes, in such place thereon and in such manner also to be
prescribed by the Department. The imprinted language shall
acknowledge the permittee's payment of or liability for the tax
imposed by this Act with respect to the distribution of those
cigarettes.
    With respect to cigarettes that the permittee delivers or
causes to be delivered in Illinois to Illinois licensed
distributors or distributed to the public for promotional
purposes, the permittee shall, by the 5th day of each month,
file with the Department, a report covering cigarettes shipped
or otherwise delivered in Illinois to licensed distributors or
distributed to the public for promotional purposes during the
preceding calendar month on a form to be prescribed and
furnished by the Department and shall disclose such other
information as the Department may lawfully require. The
Department may promulgate rules to require that the permittee's
report be accompanied by appropriate computer-generated
magnetic media supporting schedule data in the format
prescribed by the Department, unless, as provided by rule, the
Department grants an exception upon petition of the permittee.
Each such report shall be accompanied by a copy of each invoice
rendered by the permittee to any purchaser to whom the
permittee delivered cigarettes of the type covered by the
permit (or caused cigarettes of the type covered by the permit
to be delivered) in Illinois during the period covered by such
report.
    Such permit may be suspended, canceled, or revoked whenever
the permittee violates any provision of this Act or any lawful
rule or regulation issued by the Department pursuant to this
Act, is determined to be ineligible for a distributor's permit
under this Act as provided in this Section, or notifies the
Department in writing of his or her desire to have the permit
canceled. The Department shall have the power, in its
discretion, to issue a new permit after such suspension,
cancellation, or revocation, except when the person who would
receive the permit is ineligible to receive a distributor's
permit under this Act.
    All permits issued by the Department under this Act shall
be valid for a period not to exceed one year after issuance
unless sooner revoked, canceled, or suspended as provided in
this Act.
(Source: P.A. 79-387.)
 
    (35 ILCS 130/4d)
    Sec. 4d. Sales of cigarettes to and by retailers.
Transactions only with licensed distributors, out-of-state
manufacturers holding a permit, and retailers holding a
certificate of registration. In-state makers, manufacturers,
and fabricators licensed as distributors under Section 4 of
this Act and out-of-state makers, manufacturers, and
fabricators holding permits under Section 4b of this Act may
not sell original packages of cigarettes to retailers. A
retailer may sell only original packages of cigarettes obtained
from licensed distributors other than in-state makers,
manufacturers, or fabricators licensed as distributors under
Section 4 of this Act and out-of-state makers, manufacturers,
or fabricators holding permits under Section 4b of this Act. A
distributor or manufacturer may sell or distribute cigarettes
to a person located or doing business within this State only if
such person is a licensed distributor or a retailer holding a
certificate of registration. A retailer may only sell
cigarettes obtained from a licensed distributor or an
out-of-state manufacturer holding a permit.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/9c)  (from Ch. 120, par. 453.9c)
    (Section scheduled to be repealed on January 1, 2010)
    Sec. 9c. "Transporter" means any person transporting into
or within this State original packages of cigarettes that are
not tax stamped as required by this Act, except:
    (a) a person transporting into this State unstamped
original packages containing a total of not more than 2,000
cigarettes in any single lot or shipment;
    (b) a licensed cigarette distributor under this Act;
    (c) a common carrier;
    (d) a person transporting cigarettes under federal
internal bond or custom control that are non-tax paid under
Chapter 52 of the Internal Revenue Code of 1954, as amended;
    (e) a person engaged in transporting cigarettes to a
licensed distributor under the Illinois Cigarette Tax Act or
the Illinois Cigarette Use Tax Act, or under the laws of any
other state, and who has in his or her possession during the
course of transporting those cigarettes a bill of lading,
waybill, or other similar commercial document that was issued
by or for a manufacturer of cigarettes who holds a valid permit
as a cigarette manufacturer under Chapter 52 of the Internal
Revenue Code of 1954, as amended, and that shows that the
cigarettes are being transported by or at the direction of that
manufacturer to that licensed distributor.
    Any transporter desiring to possess or acquire for
transportation or transport upon the highways, roads, or
streets of this State more than 2,000 cigarettes that are not
contained in original packages that are Illinois tax stamped
shall obtain a permit from the Department authorizing that
transporter to possess or acquire for transportation or
transport the cigarettes, and he or she shall have the permit
in the transporting vehicle during the period of transportation
of the cigarettes. The application for the permit shall be in
such form and shall contain such information as may be
prescribed by the Department. The Department may issue a permit
for a single load or shipment or for a number of loads or
shipments to be transported under specified conditions.
    Any cigarettes transported on the highways, roads, or
streets of this State under conditions that violate any
requirement of this Section, and the vehicle containing those
cigarettes, are subject to seizure by the Department, and to
confiscation and forfeiture in the same manner as is provided
for in Section 18a of this Act.
    Any person who violates any requirement of this Section is
guilty of a Class 4 felony.
    Any transporter who, with intent to defeat or evade or with
intent to aid another to defeat or evade the tax imposed by
this Act, at any given time, transports 40,000 or more
cigarettes upon the highways, roads, or streets of this State
under conditions that violate any requirement of this Section
is guilty of a Class 3 felony.
"Transporter" means any person transporting into or within this
State original packages of cigarettes which are not tax stamped
as required by this Act, except:
    (a) A person transporting into this State unstamped
original packages containing a total of not more than 2000
cigarettes in any single lot or shipment;
    (b) a licensed cigarette distributor under this Act;
    (c) a common carrier;
    (d) a person transporting cigarettes under Federal
internal bond or custom control that are non-tax paid under
Chapter 52 of the Internal Revenue Code of 1954, as amended;
    (e) a person engaged in transporting cigarettes to a
cigarette dealer who is properly licensed as a distributor
under the Illinois Cigarette Tax Act or the Illinois Cigarette
Use Tax Act, or under the laws of any other state, and who has
in his possession during the course of transporting such
cigarettes a bill of lading, waybill, or other similar
commercial document which was issued by or for a manufacturer
of cigarettes who holds a valid permit as a cigarette
manufacturer under Chapter 52, Internal Revenue Code of 1954,
as subsequently amended, and which shows that the cigarettes
are being transported by or at the direction of such
manufacturer to such licensed cigarette dealer.
    Any transporter desiring to possess or acquire for
transportation or transport upon the highways, roads or streets
of this State more than 2000 cigarettes which are not contained
in original packages that are Illinois tax stamped shall obtain
a permit from the Department authorizing such transporter to
possess or acquire for transportation or transport the
cigarettes, and he shall have the permit in the transporting
vehicle during the period of transportation of the cigarettes.
The application for the permit shall be in such form and shall
contain such information as may be prescribed by the
Department. The Department may issue a permit for a single load
or shipment or for a number of loads or shipments to be
transported under specified conditions.
    Any cigarettes transported on the highways, roads or
streets of this State under conditions which violate any
requirement of this Section, and the vehicle containing such
cigarettes, are subject to seizure by the Department, and to
confiscation and forfeiture in the same manner as is provided
for in Section 18a of this Act. Any such confiscated and
forfeited property shall be sold in the same manner and under
the same conditions as provided for in Section 21 of this Act,
with the proceeds from any such sale being deposited in the
State Treasury.
    Any person who violates any requirement of this Section is
guilty of a Class 4 felony.
    Any transporter who, with intent to defeat or evade or with
intent to aid another to defeat or evade the tax imposed by
this Act, at any given time, transports 40,000 or more
cigarettes upon the highways, roads or streets of this State
under conditions which violate any requirement of this Section
shall be guilty of a Class 3 felony.
(Source: P.A. 83-1428. Repealed by P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/18)  (from Ch. 120, par. 453.18)
    Sec. 18. Any duly authorized employee of the Department may
arrest without warrant any person committing in his presence a
violation of any of the provisions of this Act, and may without
a search warrant inspect all cigarettes located in any place of
business and seize any original packages of contraband
cigarettes not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original packages in
accordance with the provisions of this Act and any vending
device in which such packages may be found, and such original
packages or vending devices so seized shall be subject to
confiscation and forfeiture as hereinafter provided.
(Source: P.A. 82-1009.)
 
    (35 ILCS 130/18a)  (from Ch. 120, par. 453.18a)
    Sec. 18a. After seizing any original packages of
cigarettes, or cigarette vending devices, as provided in
Section 18 of this Act, the Department shall hold a hearing and
shall determine whether such original packages of cigarettes,
at the time of their seizure by the Department, were contraband
cigarettes not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original packages in
accordance with this Act, or whether such cigarette vending
devices, at the time of their seizure by the Department,
contained original packages of contraband cigarettes not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of such original packages as required by this Act. The
Department shall give not less than 7 days' notice of the time
and place of such hearing to the owner of such property if he
is known, and also to the person in whose possession the
property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
the time and place of such hearing to be made at least once in
each week for 3 weeks successively in a newspaper of general
circulation in the county where such hearing is to be held.
    If, as the result of such hearing, the Department shall
determine that the original packages of cigarettes seized were
at the time of seizure contraband cigarettes not tax stamped or
tax imprinted underneath the sealed transparent wrapper of such
original packages as required by this Act, or that any
cigarette vending device at the time of its seizure contained
original packages of contraband cigarettes not tax stamped or
tax imprinted underneath the sealed transparent wrapper of such
original packages as required by this Act, the Department shall
enter an order declaring such original packages of cigarettes
or such cigarette vending devices confiscated and forfeited to
the State, and to be held by the Department for disposal by it
as provided in Section 21 of this Act. The Department shall
give notice of such order to the owner of such property if he
is known, and also to the person in whose possession the
property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
such order to be made at least once in each week for 3 weeks
successively in a newspaper of general circulation in the
county where such hearing was held.
(Source: P.A. 76-684.)
 
    (35 ILCS 130/18b)  (from Ch. 120, par. 453.18b)
    Sec. 18b. Possession of more than 100 original packages of
contraband cigarettes; penalty. With the exception of licensed
distributors and transporters, as defined in Section 9c of this
Act, possessing unstamped original packages of cigarettes, and
licensed distributors possessing original packages of
cigarettes that bear a tax stamp of another state or taxing
jurisdiction, anyone possessing contraband cigarettes
contained in original packages is which are not tax stamped as
required by this Act, or which are improperly tax stamped,
shall be liable to pay, to the Department for deposit in the
Tax Compliance and Administration Fund State Treasury, a
penalty of $25 $15 for each such package of cigarettes in
excess of 100 packages, unless reasonable cause can be
established by the person upon whom the penalty is imposed.
This penalty is in addition to the taxes imposed by this Act.
Reasonable cause shall be determined in each situation in
accordance with rules adopted by the Department. The provisions
of the Uniform Penalty and Interest Act do not apply to this
Section. Such penalty may be recovered by the Department in a
civil action.
(Source: P.A. 83-1428.)
 
    (35 ILCS 130/18c)
    Sec. 18c. Possession of not less than 10 and not more than
100 original packages of contraband cigarettes not tax stamped
or improperly tax stamped; penalty. With the exception of
licensed distributors and transporters, as defined in Section
9c of this Act, possessing unstamped original packages of
cigarettes, and licensed distributors possessing original
packages of cigarettes that bear a tax stamp of another state
or taxing jurisdiction, anyone possessing not less than 10 and
not more than 100 packages of contraband cigarettes contained
in original packages that are not tax stamped as required by
this Act, or that are improperly tax stamped, is liable to pay
to the Department, for deposit into the Tax Compliance and
Administration Fund, a penalty of $10 for each such package of
cigarettes, unless reasonable cause can be established by the
person upon whom the penalty is imposed. Reasonable cause shall
be determined in each situation in accordance with rules
adopted by the Department. The provisions of the Uniform
Penalty and Interest Act do not apply to this Section.
(Source: P.A. 92-322, eff. 1-1-02.)
 
    (35 ILCS 130/20)  (from Ch. 120, par. 453.20)
    Sec. 20. Whenever any peace officer of the State or any
duly authorized officer or employee of the Department shall
have reason to believe that any violation of this Act has
occurred and that the person so violating the Act has in his,
her or its possession any original package of contraband
cigarettes, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package as required
by this Act, or any vending device containing such original
packages of contraband cigarettes to which stamps have not been
affixed, or on which an authorized substitute for stamps has
not been imprinted underneath the sealed transparent wrapper of
such original packages, as required by this Act, he may file or
cause to be filed his complaint in writing, verified by
affidavit, with any court within whose jurisdiction the
premises to be searched are situated, stating the facts upon
which such belief is founded, the premises to be searched, and
the property to be seized, and procure a search warrant and
execute the same. Upon the execution of such search warrant,
the peace officer, or officer or employee of the Department,
executing such search warrant shall make due return thereof to
the court issuing the same, together with an inventory of the
property taken thereunder. The court shall thereupon issue
process against the owner of such property if he is known;
otherwise, such process shall be issued against the person in
whose possession the property so taken is found, if such person
is known. In case of inability to serve such process upon the
owner or the person in possession of the property at the time
of its seizure, as hereinbefore provided, notice of the
proceedings before the court shall be given as required by the
statutes of the State governing cases of Attachment. Upon the
return of the process duly served or upon the posting or
publishing of notice made, as hereinabove provided, the court
or jury, if a jury shall be demanded, shall proceed to
determine whether or not such property so seized was held or
possessed in violation of this Act, or whether, if a vending
device has been so seized, it contained at the time of its
seizure original packages of contraband cigarettes not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of such original packages as required by this Act. In
case of a finding that the original packages seized were
contraband cigarettes not tax stamped or tax imprinted
underneath the sealed transparent wrapper of such original
packages in accordance with the provisions of this Act, or that
any vending device so seized contained at the time of its
seizure original packages of contraband cigarettes not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of such original packages in accordance with the
provisions of this Act, judgment shall be entered confiscating
and forfeiting the property to the State and ordering its
delivery to the Department, and in addition thereto, the court
shall have power to tax and assess the costs of the
proceedings.
    When any original packages or any cigarette vending device
shall have been declared forfeited to the State by any court,
as hereinbefore provided, and when such confiscated and
forfeited property shall have been delivered to the Department,
as provided in this Act, the said Department shall destroy or
maintain and use such property in an undercover capacity. The
Department may, prior to any destruction of cigarettes, permit
the true holder of the trademark rights in the cigarette brand
to inspect such contraband cigarettes, in order to assist the
Department in any investigation regarding such cigarettes.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 130/24)  (from Ch. 120, par. 453.24)
    Sec. 24. Punishment for sale or possession of unstamped
packages of contraband cigarettes.
    (a) Possession or sale of 100 or less packages of
contraband cigarettes. With the exception of licensed
distributors or transporters, as defined in Section 9c of this
Act, any person who has in his or her possession or sells 100
or less original packages of contraband cigarettes is guilty of
a Class A misdemeanor.
    (b) Possession or sale of more than 100 but less than 251
packages of contraband cigarettes. With the exception of
licensed distributors or transporters, as defined in Section 9c
of this Act, any person who has in his or her possession or
sells more than 100 but less than 251 original packages of
contraband cigarettes is guilty of a Class A misdemeanor for a
first offense and a Class 4 felony for each subsequent offense.
    (c) Possession or sale of more than 250 but less than 1,001
packages of contraband cigarettes. With the exception of
licensed distributors or transporters, as defined in Section 9c
of this Act, any person who has in his or her possession or
sells more than 250 but less than 1,001 original packages of
contraband cigarettes is guilty of a Class 4 felony.
    (d) Possession or sale of more than 1,000 packages of
contraband cigarettes. With the exception of licensed
distributors or transporters, as defined in Section 9c of this
Act, any person who has in his or her possession or sells more
than 1,000 original packages of contraband cigarettes is guilty
of a Class 3 felony.
    (e) Any person licensed as a distributor or transporter, as
defined in Section 9c of this Act, who has in his or her
possession or sells 100 or less original packages of contraband
cigarettes is guilty of a Class A misdemeanor.
    (f) Any person licensed as a distributor or transporter, as
defined in Section 9c of this Act, who has in his or her
possession or sells more than 100 original packages of
contraband cigarettes is guilty of a Class 4 felony.
    (g) Notwithstanding subsections (e) through (f), licensed
distributors and transporters, as defined in Section 9c of this
Act, may possess unstamped packages of cigarettes.
Notwithstanding subsections (e) through (f), licensed
distributors may possess cigarettes that bear a tax stamp of
another state or taxing jurisdiction. Notwithstanding
subsections (e) through (f), a licensed distributor may possess
contraband cigarettes returned to the distributor by a retailer
if the distributor immediately conducts an inventory of the
cigarettes being returned, the distributor and the retailer
returning the contraband cigarettes sign the inventory, the
distributor provides a copy of the signed inventory to the
retailer, and the distributor retains the inventory in its
books and records and promptly notifies the Department of
Revenue.
    (h) Notwithstanding subsections (a) through (d) of this
Section, a retailer unknowingly possessing contraband
cigarettes obtained from a licensed distributor or knowingly
possessing contraband cigarettes obtained from a licensed
distributor is not subject to penalties under this Section if
the retailer, within 48 hours after discovering that the
cigarettes are contraband cigarettes, excluding Saturdays,
Sundays, and holidays: (i) notifies the Department and the
licensed distributor from whom the cigarettes were obtained,
orally and in writing, that he or she possesses contraband
cigarettes obtained from a licensed distributor; (ii) places
the contraband cigarettes in one or more containers and seals
those containers; and (iii) places on the containers the
following or similar language: "Contraband Cigarettes. Not For
Sale." All contraband cigarettes in the possession of a
retailer remain subject to forfeiture under the provisions of
this Act.
    (a) Any person other than a licensed distributor who sells,
offers for sale, or has in his possession with intent to sell
or offer for sale, more than 100 original packages, not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of such original package in accordance with this Act,
shall be guilty of a Class 4 felony.
    (a-5) Any person other than a licensed distributor who
sells, offers for sale, or has in his possession with intent to
sell or offer for sale, 100 or fewer original packages, not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of the original package in accordance with this Act, is
guilty of a Class A misdemeanor for the first offense and a
Class 4 felony for each subsequent offense.
    (b) Any distributor who sells an original package of
cigarettes, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, except when the sale is made under
such circumstances that the tax imposed by this Act may not
legally be levied because of the Constitution or laws of the
United States, shall be guilty of a Class 3 felony.
(Source: P.A. 92-322, eff. 1-1-02.)
 
    (35 ILCS 130/28a new)
    Sec. 28a. If, at the time of terminating his or her
business, any licensed distributor has on hand unused stamps,
the distributor or his or her legal representative may, after
Department approval, transfer or sell those unused stamps to
another distributor licensed under this Act. The transferring
distributor, or his or her legal representative, shall report
to the Department in writing an intention to so sell or
transfer the stamps and the name and address of the distributor
to whom the sale or transfer is to be made, together with the
total of the face amount of each denomination of stamps to be
so sold or transferred. The Department shall approve or
disapprove the requested transfer within 48 hours after
receiving the report. Approval shall be deemed granted if not
received by the distributor within 5 business days after the
Department's receipt of the report.
 
    (35 ILCS 130/3-15 rep.)
    Section 10. The Cigarette Tax Act is amended by repealing
Section 3-15.
 
    Section 15. The Cigarette Use Tax Act is amended by
changing Sections 1, 3, 3-10, 4, 7, 24, 25, 25a, 25b, and 30
and by adding Section 4d as follows:
 
    (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
    Sec. 1. For the purpose of this Act, unless otherwise
required by the context:
    "Use" means the exercise by any person of any right or
power over cigarettes incident to the ownership or possession
thereof, other than the making of a sale thereof in the course
of engaging in a business of selling cigarettes and shall
include the keeping or retention of cigarettes for use, except
that "use" does not include the use of cigarettes by a
not-for-profit research institution conducting tests
concerning the health effects of tobacco products, provided the
cigarettes are not offered for resale.
    "Brand Style" means a variety of cigarettes distinguished
by the tobacco used, tar and nicotine content, flavoring used,
size of the cigarette, filtration on the cigarette or
packaging.
    "Cigarette" means any roll for smoking made wholly or in
part of tobacco irrespective of size or shape and whether or
not such tobacco is flavored, adulterated or mixed with any
other ingredient, and the wrapper or cover of which is made of
paper or any other substance or material except tobacco.
    "Contraband cigarettes" means:
        (a) cigarettes that do not bear a required tax stamp
    under this Act;
        (b) cigarettes for which any required federal taxes
    have not been paid;
        (c) cigarettes that bear a counterfeit tax stamp;
        (d) cigarettes that are manufactured, fabricated,
    assembled, processed, packaged, or labeled by any person
    other than (i) the owner of the trademark rights in the
    cigarette brand or (ii) a person that is directly or
    indirectly authorized by such owner;
        (e) cigarettes imported into the United States, or
    otherwise distributed, in violation of the federal
    Imported Cigarette Compliance Act of 2000 (Title IV of
    Public Law 106-476); or
        (f) cigarettes that have false manufacturing labels; .
        (g) cigarettes identified in Section 3-10(a)(1) of
    this Act; or
        (h) cigarettes that are improperly tax stamped,
    including cigarettes that bear a tax stamp of another state
    or taxing jurisdiction.
    "Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, however formed, limited liability
company, or a receiver, executor, administrator, trustee,
guardian or other representative appointed by order of any
court.
    "Department" means the Department of Revenue.
    "Sale" means any transfer, exchange or barter in any manner
or by any means whatsoever for a consideration, and includes
and means all sales made by any person.
    "Original Package" means the individual packet, box or
other container whatsoever used to contain and to convey
cigarettes to the consumer.
    "Distributor" means any and each of the following:
        a. Any person engaged in the business of selling
    cigarettes in this State who brings or causes to be brought
    into this State from without this State any original
    packages of cigarettes, on which original packages there is
    no authorized evidence underneath a sealed transparent
    wrapper showing that the tax liability imposed by this Act
    has been paid or assumed by the out-of-State seller of such
    cigarettes, for sale in the course of such business.
        b. Any person who makes, manufactures or fabricates
    cigarettes in this State for sale, except a person who
    makes, manufactures or fabricates cigarettes for sale to
    residents incarcerated in penal institutions or resident
    patients or a State-operated mental health facility.
        c. Any person who makes, manufactures or fabricates
    cigarettes outside this State, which cigarettes are placed
    in original packages contained in sealed transparent
    wrappers, for delivery or shipment into this State, and who
    elects to qualify and is accepted by the Department as a
    distributor under Section 7 of this Act.
    "Distributor" does not include any person who transfers
cigarettes to a not-for-profit research institution that
conducts tests concerning the health effects of tobacco
products and who does not offer the cigarettes for resale.
    "Distributor maintaining a place of business in this
State", or any like term, means any distributor having or
maintaining within this State, directly or by a subsidiary, an
office, distribution house, sales house, warehouse or other
place of business, or any agent operating within this State
under the authority of the distributor or its subsidiary,
irrespective of whether such place of business or agent is
located here permanently or temporarily, or whether such
distributor or subsidiary is licensed to transact business
within this State.
    "Business" means any trade, occupation, activity or
enterprise engaged in or conducted in this State for the
purpose of selling cigarettes.
    "Prior Continuous Compliance Taxpayer" means any person
who is licensed under this Act and who, having been a licensee
for a continuous period of 5 years, is determined by the
Department not to have been either delinquent or deficient in
the payment of tax liability during that period or otherwise in
violation of this Act. Also, any taxpayer who has, as verified
by the Department, continuously complied with the condition of
his bond or other security under provisions of this Act of a
period of 5 consecutive years shall be considered to be a
"prior continuous compliance taxpayer". In calculating the
consecutive period of time described herein for qualification
as a "prior continuous compliance taxpayer", a consecutive
period of time of qualifying compliance immediately prior to
the effective date of this amendatory Act of 1987 shall be
credited to any licensee who became licensed on or before the
effective date of this amendatory Act of 1987.
    "Stamp" or "stamps" mean the indicia required to be affixed
on a pack of cigarettes that evidence payment of the tax on
cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
indicia used to indicate that the cigarettes are intended for a
sale or distribution within this State that is exempt from
State tax under any applicable provision of law.
    "Within this State" means within the exterior limits of the
State of Illinois and includes all territory within these
limits owned by or ceded to the United States of America.
    "Related party" means any person that is associated with
any other person because he or she:
        (a) is an officer or director of a business; or
        (b) is legally recognized as a partner in business. ;
    or
        (c) is directly or indirectly controlled by another.
(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
    (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
    Sec. 3. Stamp payment. The tax hereby imposed shall be
collected by a distributor maintaining a place of business in
this State or a distributor authorized by the Department
pursuant to Section 7 hereof to collect the tax, and the amount
of the tax shall be added to the price of the cigarettes sold
by such distributor. Collection of the tax shall be evidenced
by a stamp or stamps affixed to each original package of
cigarettes or by an authorized substitute for such stamp
imprinted on each original package of such cigarettes
underneath the sealed transparent outside wrapper of such
original package, except as hereinafter provided. Each
distributor who is required or authorized to collect the tax
herein imposed, before delivering or causing to be delivered
any original packages of cigarettes in this State to any
purchaser, shall firmly affix a proper stamp or stamps to each
such package, or (in the case of manufacturers of cigarettes in
original packages which are contained inside a sealed
transparent wrapper) shall imprint the required language on the
original package of cigarettes beneath such outside wrapper as
hereinafter provided. Such stamp or stamps need not be affixed
to the original package of any cigarettes with respect to which
the distributor is required to affix a like stamp or stamps by
virtue of the Cigarette Tax Act, however, and no tax imprint
need be placed underneath the sealed transparent wrapper of an
original package of cigarettes with respect to which the
distributor is required or authorized to employ a like tax
imprint by virtue of the Cigarette Tax Act.
    No stamp or imprint may be affixed to, or made upon, any
package of cigarettes unless that package complies with all
requirements of the federal Cigarette Labeling and Advertising
Act, 15 U.S.C. 1331 and following, for the placement of labels,
warnings, or any other information upon a package of cigarettes
that is sold within the United States. Under the authority of
Section 6, the Department shall revoke the license of any
distributor that is determined to have violated this paragraph.
A person may not affix a stamp on a package of cigarettes,
cigarette papers, wrappers, or tubes if that individual package
has been marked for export outside the United States with a
label or notice in compliance with Section 290.185 of Title 27
of the Code of Federal Regulations. It is not a defense to a
proceeding for violation of this paragraph that the label or
notice has been removed, mutilated, obliterated, or altered in
any manner.
    Only distributors licensed under this Act and
transporters, as defined in Section 9c of the Cigarette Tax
Act, may possess unstamped original packages of cigarettes.
Prior to shipment to an Illinois retailer, a stamp shall be
applied to each original package of cigarettes sold to the
retailer. A distributor may apply a tax stamp only to an
original package of cigarettes purchased or obtained directly
from an in-state maker, manufacturer, or fabricator licensed as
a distributor under Section 4 of this Act or an out-of-state
maker, manufacturer, or fabricator holding a permit under
Section 7 of this Act. A licensed distributor may ship or
otherwise cause to be delivered unstamped original packages of
cigarettes in, into, or from this State. A licensed distributor
may transport unstamped original packages of cigarettes to a
facility, wherever located, owned or controlled by such
distributor; however, a distributor may not transport
unstamped original packages of cigarettes to a facility where
retail sales of cigarettes take place. Any licensed distributor
that ships or otherwise causes to be delivered unstamped
original packages of cigarettes into, within, or from this
State shall ensure that the invoice or equivalent documentation
and the bill of lading or freight bill for the shipment
identifies the true name and address of the consignor or
seller, the true name and address of the consignee or
purchaser, and the quantity by brand style of the cigarettes so
transported, provided that this Section shall not be construed
as to impose any requirement or liability upon any common or
contract carrier.
    Stamps, when required hereunder, shall be purchased from
the Department, or any person authorized by the Department, by
distributors. On and after July 1, 2003, payment for such
stamps must be made by means of electronic funds transfer. The
Department may refuse to sell stamps to any person who does not
comply with the provisions of this Act. Beginning on June 6,
2002 and through June 30, 2002, persons holding valid licenses
as distributors may purchase cigarette tax stamps up to an
amount equal to 115% of the distributor's average monthly
cigarette tax stamp purchases over the 12 calendar months prior
to June 6, 2002.
    Prior to December 1, 1985, the Department shall allow a
distributor 21 days in which to make final payment of the
amount to be paid for such stamps, by allowing the distributor
to make payment for the stamps at the time of purchasing them
with a draft which shall be in such form as the Department
prescribes, and which shall be payable within 21 days
thereafter: Provided that such distributor has filed with the
Department, and has received the Department's approval of, a
bond, which is in addition to the bond required under Section 4
of this Act, payable to the Department in an amount equal to
80% of such distributor's average monthly tax liability to the
Department under this Act during the preceding calendar year or
$500,000, whichever is less. The bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of credit.
The bond shall be conditioned upon the distributor's payment of
the amount of any 21-day draft which the Department accepts
from that distributor for the delivery of stamps to that
distributor under this Act. The distributor's failure to pay
any such draft, when due, shall also make such distributor
automatically liable to the Department for a penalty equal to
25% of the amount of such draft.
    On and after December 1, 1985 and until July 1, 2003, the
Department shall allow a distributor 30 days in which to make
final payment of the amount to be paid for such stamps, by
allowing the distributor to make payment for the stamps at the
time of purchasing them with a draft which shall be in such
form as the Department prescribes, and which shall be payable
within 30 days thereafter, and beginning on January 1, 2003 and
thereafter, the draft shall be payable by means of electronic
funds transfer: Provided that such distributor has filed with
the Department, and has received the Department's approval of,
a bond, which is in addition to the bond required under Section
4 of this Act, payable to the Department in an amount equal to
150% of such distributor's average monthly tax liability to the
Department under this Act during the preceding calendar year or
$750,000, whichever is less, except that as to bonds filed on
or after January 1, 1987, such additional bond shall be in an
amount equal to 100% of such distributor's average monthly tax
liability under this Act during the preceding calendar year or
$750,000, whichever is less. The bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of credit.
The bond shall be conditioned upon the distributor's payment of
the amount of any 30-day draft which the Department accepts
from that distributor for the delivery of stamps to that
distributor under this Act. The distributor's failure to pay
any such draft, when due, shall also make such distributor
automatically liable to the Department for a penalty equal to
25% of the amount of such draft.
    Every prior continuous compliance taxpayer shall be exempt
from all requirements under this Section concerning the
furnishing of such bond, as defined in this Section, as a
condition precedent to his being authorized to engage in the
business licensed under this Act. This exemption shall continue
for each such taxpayer until such time as he may be determined
by the Department to be delinquent in the filing of any
returns, or is determined by the Department (either through the
Department's issuance of a final assessment which has become
final under the Act, or by the taxpayer's filing of a return
which admits tax to be due that is not paid) to be delinquent
or deficient in the paying of any tax under this Act, at which
time that taxpayer shall become subject to the bond
requirements of this Section and, as a condition of being
allowed to continue to engage in the business licensed under
this Act, shall be required to furnish bond to the Department
in such form as provided in this Section. Such taxpayer shall
furnish such bond for a period of 2 years, after which, if the
taxpayer has not been delinquent in the filing of any returns,
or delinquent or deficient in the paying of any tax under this
Act, the Department may reinstate such person as a prior
continuance compliance taxpayer. Any taxpayer who fails to pay
an admitted or established liability under this Act may also be
required to post bond or other acceptable security with the
Department guaranteeing the payment of such admitted or
established liability.
    Any person aggrieved by any decision of the Department
under this Section may, within the time allowed by law, protest
and request a hearing, whereupon the Department shall give
notice and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to such person. In the absence of such a
protest filed within the time allowed by law, the Department's
decision shall become final without any further determination
being made or notice given.
    The Department shall discharge any surety and shall release
and return any bond or security deposited, assigned, pledged,
or otherwise provided to it by a taxpayer under this Section
within 30 days after:
        (1) such Taxpayer becomes a prior continuous
    compliance taxpayer; or
        (2) such taxpayer has ceased to collect receipts on
    which he is required to remit tax to the Department, has
    filed a final tax return, and has paid to the Department an
    amount sufficient to discharge his remaining tax liability
    as determined by the Department under this Act. The
    Department shall make a final determination of the
    taxpayer's outstanding tax liability as expeditiously as
    possible after his final tax return has been filed. If the
    Department cannot make such final determination within 45
    days after receiving the final tax return, within such
    period it shall so notify the taxpayer, stating its reasons
    therefor.
    At the time of purchasing such stamps from the Department
when purchase is required by this Act, or at the time when the
tax which he has collected is remitted by a distributor to the
Department without the purchase of stamps from the Department
when that method of remitting the tax that has been collected
is required or authorized by this Act, the distributor shall be
allowed a discount during any year commencing July 1 and ending
the following June 30 in accordance with the schedule set out
hereinbelow, from the amount to be paid by him to the
Department for such stamps, or to be paid by him to the
Department on the basis of monthly remittances (as the case may
be), to cover the cost, to such distributor, of collecting the
tax herein imposed by affixing such stamps to the original
packages of cigarettes sold by such distributor or by placing
tax imprints underneath the sealed transparent wrapper of
original packages of cigarettes sold by such distributor (as
the case may be): (1) Prior to December 1, 1985, a discount
equal to 1-2/3% of the amount of the tax up to and including
the first $700,000 paid hereunder by such distributor to the
Department during any such year; 1-1/3% of the next $700,000 of
tax or any part thereof, paid hereunder by such distributor to
the Department during any such year; 1% of the next $700,000 of
tax, or any part thereof, paid hereunder by such distributor to
the Department during any such year; and 2/3 of 1% of the
amount of any additional tax paid hereunder by such distributor
to the Department during any such year or (2) On and after
December 1, 1985, a discount equal to 1.75% of the amount of
the tax payable under this Act up to and including the first
$3,000,000 paid hereunder by such distributor to the Department
during any such year and 1.5% of the amount of any additional
tax paid hereunder by such distributor to the Department during
any such year.
    Two or more distributors that use a common means of
affixing revenue tax stamps or that are owned or controlled by
the same interests shall be treated as a single distributor for
the purpose of computing the discount.
    Cigarette manufacturers who are distributors under Section
7(a) of this Act, and who place their cigarettes in original
packages which are contained inside a sealed transparent
wrapper, shall be required to remit the tax which they are
required to collect under this Act to the Department by
remitting the amount thereof to the Department by the 5th day
of each month, covering cigarettes shipped or otherwise
delivered to points in Illinois to purchasers during the
preceding calendar month, but a distributor need not remit to
the Department the tax so collected by him from purchasers
under this Act to the extent to which such distributor is
required to remit the tax imposed by the Cigarette Tax Act to
the Department with respect to the same cigarettes. All taxes
upon cigarettes under this Act are a direct tax upon the retail
consumer and shall conclusively be presumed to be precollected
for the purpose of convenience and facility only. Cigarette
manufacturers that are distributors licensed under Section
7(a) of this Act and Distributors who place their are
manufacturers of cigarettes in original packages which are
contained inside a sealed transparent wrapper, before
delivering such cigarettes or causing such cigarettes to be
delivered in this State to purchasers, shall evidence their
obligation to collect and remit the tax due with respect to
such cigarettes by imprinting language to be prescribed by the
Department on each original package of such cigarettes
underneath the sealed transparent outside wrapper of such
original package, in such place thereon and in such manner as
the Department may prescribe; provided (as stated
hereinbefore) that this requirement does not apply when such
distributor is required or authorized by the Cigarette Tax Act
to place the tax imprint provided for in the last paragraph of
Section 3 of that Act underneath the sealed transparent wrapper
of such original package of cigarettes. Such imprinted language
shall acknowledge the manufacturer's collection and payment of
or liability for the tax imposed by this Act with respect to
such cigarettes.
    The Department shall adopt the design or designs of the tax
stamps and shall procure the printing of such stamps in such
amounts and denominations as it deems necessary to provide for
the affixation of the proper amount of tax stamps to each
original package of cigarettes.
    Where tax stamps are required, the Department may authorize
distributors to affix revenue tax stamps by imprinting tax
meter stamps upon original packages of cigarettes. The
Department shall adopt rules and regulations relating to the
imprinting of such tax meter stamps as will result in payment
of the proper taxes as herein imposed. No distributor may affix
revenue tax stamps to original packages of cigarettes by
imprinting meter stamps thereon unless such distributor has
first obtained permission from the Department to employ this
method of affixation. The Department shall regulate the use of
tax meters and may, to assure the proper collection of the
taxes imposed by this Act, revoke or suspend the privilege,
theretofore granted by the Department to any distributor, to
imprint tax meter stamps upon original packages of cigarettes.
    The tax hereby imposed and not paid pursuant to this
Section shall be paid to the Department directly by any person
using such cigarettes within this State, pursuant to Section 12
hereof.
    A distributor shall not affix, or cause to be affixed, any
stamp or imprint to a package of cigarettes, as provided for in
this Section, if the tobacco product manufacturer, as defined
in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
that made or sold the cigarettes has failed to become a
participating manufacturer, as defined in subdivision (a)(1)
of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
or has failed to create a qualified escrow fund for any
cigarettes manufactured by the tobacco product manufacturer
and sold in this State or otherwise failed to bring itself into
compliance with subdivision (a)(2) of Section 15 of the Tobacco
Product Manufacturers' Escrow Act.
(Source: P.A. 92-322, eff. 1-1-02; 92-536, eff. 6-6-02; 92-737,
eff. 7-25-02; 93-22, eff. 6-20-03.)
 
    (35 ILCS 135/3-10)
    Sec. 3-10. Cigarette enforcement.
    (a) Prohibitions. It is unlawful for any person:
        (1) to sell or distribute in this State; to acquire,
    hold, own, possess, or transport, for sale or distribution
    in this State; or to import, or cause to be imported into
    this State for sale or distribution in this State:
            (A) any cigarettes the package of which:
                (i) bears any statement, label, stamp,
            sticker, or notice indicating that the
            manufacturer did not intend the cigarettes to be
            sold, distributed, or used in the United States,
            including but not limited to labels stating "For
            Export Only", "U.S. Tax Exempt", "For Use Outside
            U.S.", or similar wording; or
                (ii) does not comply with:
                    (aa) all requirements imposed by or
                pursuant to federal law regarding warnings and
                other information on packages of cigarettes
                manufactured, packaged, or imported for sale,
                distribution, or use in the United States,
                including but not limited to the precise
                warning labels specified in the federal
                Cigarette Labeling and Advertising Act, 15
                U.S.C. 1333; and
                    (bb) all federal trademark and copyright
                laws;
            (B) any cigarettes imported into the United States
        in violation of 26 U.S.C. 5754 or any other federal
        law, or implementing federal regulations;
            (C) any cigarettes that such person otherwise
        knows or has reason to know the manufacturer did not
        intend to be sold, distributed, or used in the United
        States; or
            (D) any cigarettes for which there has not been
        submitted to the Secretary of the U.S. Department of
        Health and Human Services the list or lists of the
        ingredients added to tobacco in the manufacture of the
        cigarettes required by the federal Cigarette Labeling
        and Advertising Act, 15 U.S.C. 1335a;
        (2) to alter the package of any cigarettes, prior to
    sale or distribution to the ultimate consumer, so as to
    remove, conceal, or obscure:
            (A) any statement, label, stamp, sticker, or
        notice described in subdivision (a)(1)(A)(i) of this
        Section;
            (B) any health warning that is not specified in, or
        does not conform with the requirements of, the federal
        Cigarette Labeling and Advertising Act, 15 U.S.C.
        1333; or
        (3) to affix any stamp required pursuant to this Act to
    the package of any cigarettes described in subdivision
    (a)(1) of this Section or altered in violation of
    subdivision (a)(2). ; or
        (4) to knowingly possess, or possess for sale,
    contraband cigarettes.
    (b) Documentation. On the first business day of each month,
each person licensed to affix the State tax stamp to cigarettes
shall file with the Department, for all cigarettes imported
into the United States to which the person has affixed the tax
stamp in the preceding month:
        (1) a copy of:
            (A) the permit issued pursuant to the Internal
        Revenue Code, 26 U.S.C. 5713, to the person importing
        the cigarettes into the United States allowing the
        person to import the cigarettes; and
            (B) the customs form containing, with respect to
        the cigarettes, the internal revenue tax information
        required by the U.S. Bureau of Alcohol, Tobacco and
        Firearms;
        (2) a statement, signed by the person under penalty of
    perjury, which shall be treated as confidential by the
    Department and exempt from disclosure under the Freedom of
    Information Act, identifying the brand and brand styles of
    all such cigarettes, the quantity of each brand style of
    such cigarettes, the supplier of such cigarettes, and the
    person or persons, if any, to whom such cigarettes have
    been conveyed for resale; and a separate statement, signed
    by the individual under penalty of perjury, which shall not
    be treated as confidential or exempt from disclosure,
    separately identifying the brands and brand styles of such
    cigarettes; and
        (3) a statement, signed by an officer of the
    manufacturer or importer under penalty of perjury,
    certifying that the manufacturer or importer has complied
    with:
            (A) the package health warning and ingredient
        reporting requirements of the federal Cigarette
        Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
        with respect to such cigarettes; and
            (B) the provisions of Exhibit T of the Master
        Settlement Agreement entered in the case of People of
        the State of Illinois v. Philip Morris, et al. (Circuit
        Court of Cook County, No. 96-L13146), including a
        statement indicating whether the manufacturer is, or
        is not, a participating tobacco manufacturer within
        the meaning of Exhibit T.
    (c) Administrative sanctions.
        (1) Upon finding that a distributor or a person has
    committed any of the acts prohibited by subsection (a),
    knowing or having reason to know that he or she has done
    so, or has failed to comply with any requirement of
    subsection (b), the Department may revoke or suspend the
    license or licenses of any distributor pursuant to the
    procedures set forth in Section 6 and impose on the
    distributor, or on the person, a civil penalty in an amount
    not to exceed the greater of 500% of the retail value of
    the cigarettes involved or $5,000.
        (2) Cigarettes that are acquired, held, owned,
    possessed, transported in, imported into, or sold or
    distributed in this State in violation of this Section
    shall be deemed contraband under this Act and are subject
    to seizure and forfeiture as provided in this Act, and all
    such cigarettes seized and forfeited shall be destroyed or
    maintained and used in an undercover capacity. Such
    cigarettes shall be deemed contraband whether the
    violation of this Section is knowing or otherwise.
    (d) Unfair trade practices. In addition to any other
penalties provided for in this Act, a A violation of subsection
(a) or subsection (b) of this Section shall constitute an
unlawful practice as provided in the Consumer Fraud and
Deceptive Business Practices Act.
    (d-1) Retailers shall not be liable under subsections
(c)(1) and (d) of this Section for unknowingly possessing,
selling, or distributing to consumers or users cigarettes
identified in subsection (a)(1) of this Section if the
cigarettes possessed, sold, or distributed by the retailer were
obtained from a distributor licensed under this Act or the
Cigarette Tax Act.
    (e) Unfair cigarette sales. For purposes of the Trademark
Registration and Protection Act and the Counterfeit Trademark
Act, cigarettes imported or reimported into the United States
for sale or distribution under any trade name, trade dress, or
trademark that is the same as, or is confusingly similar to,
any trade name, trade dress, or trademark used for cigarettes
manufactured in the United States for sale or distribution in
the United States shall be presumed to have been purchased
outside of the ordinary channels of trade.
    (f) General provisions.
        (1) This Section shall be enforced by the Department;
    provided that, at the request of the Director of Revenue or
    the Director's duly authorized agent, the State police and
    all local police authorities shall enforce the provisions
    of this Section. The Attorney General has concurrent power
    with the State's Attorney of any county to enforce this
    Section.
        (2) For the purpose of enforcing this Section, the
    Director of Revenue and any agency to which the Director
    has delegated enforcement responsibility pursuant to
    subdivision (f)(1) may request information from any State
    or local agency and may share information with and request
    information from any federal agency and any agency of any
    other state or any local agency of any other state.
        (3) In addition to any other remedy provided by law,
    including enforcement as provided in subdivision (a)(1),
    any person may bring an action for appropriate injunctive
    or other equitable relief for a violation of this Section;
    actual damages, if any, sustained by reason of the
    violation; and, as determined by the court, interest on the
    damages from the date of the complaint, taxable costs, and
    reasonable attorney's fees. If the trier of fact finds that
    the violation is flagrant, it may increase recovery to an
    amount not in excess of 3 times the actual damages
    sustained by reason of the violation.
    (g) Definitions. As used in this Section:
    "Importer" means that term as defined in 26 U.S.C. 5702(1).
    "Package" means that term as defined in 15 U.S.C. 1332(4).
    (h) Applicability.
        (1) This Section does not apply to:
            (A) cigarettes allowed to be imported or brought
        into the United States for personal use; and
            (B) cigarettes sold or intended to be sold as
        duty-free merchandise by a duty-free sales enterprise
        in accordance with the provisions of 19 U.S.C. 1555(b)
        and any implementing regulations; except that this
        Section shall apply to any such cigarettes that are
        brought back into the customs territory for resale
        within the customs territory.
        (2) The penalties provided in this Section are in
    addition to any other penalties imposed under other
    provision of law.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (35 ILCS 135/4)  (from Ch. 120, par. 453.34)
    Sec. 4. Distributor's license. A distributor maintaining a
place of business in this State, if required to procure a
license or allowed to obtain a permit as a distributor under
the Cigarette Tax Act, need not obtain an additional license or
permit under this Act, but shall be deemed to be sufficiently
licensed or registered by virtue of his being licensed or
registered under the Cigarette Tax Act.
    Every distributor maintaining a place of business in this
State, if not required to procure a license or allowed to
obtain a permit as a distributor under the Cigarette Tax Act,
shall make a verified application to the Department (upon a
form prescribed and furnished by the Department) for a license
to act as a distributor under this Act. In completing such
application, the applicant shall furnish such information as
the Department may reasonably require.
    The annual license fee payable to the Department for each
distributor's license shall be $250. The purpose of such annual
license fee is to defray the cost, to the Department, of
serializing cigarette tax stamps. The applicant for license
shall pay such fee to the Department at the time of submitting
the application for license to the Department.
    Such applicant shall file, with his application, a joint
and several bond. Such bond shall be executed to the Department
of Revenue, with good and sufficient surety or sureties
residing or licensed to do business within the State of
Illinois, in the amount of $2,500, conditioned upon the true
and faithful compliance by the licensee with all of the
provisions of this Act. Such bond, or a reissue thereof, or a
substitute therefor, shall be kept in effect during the entire
period covered by the license. A separate application for
license shall be made, a separate annual license fee paid, and
a separate bond filed, for each place of business at or from
which the applicant proposes to act as a distributor under this
Act and for which the applicant is not required to procure a
license or allowed to obtain a permit as a distributor under
the Cigarette Tax Act.
    The following are ineligible to receive a distributor's
license under this Act:
        (1) a person who is not of good character and
    reputation in the community in which he resides;
        (2) a person who has been convicted of a felony under
    any Federal or State law, if the Department, after
    investigation and a hearing, if requested by the applicant,
    determines that such person has not been sufficiently
    rehabilitated to warrant the public trust;
        (3) a corporation, if any officer, manager or director
    thereof, or any stockholder or stockholders owning in the
    aggregate more than 5% of the stock of such corporation,
    would not be eligible to receive a license hereunder for
    any reason; .
        (4) a person, or any person who owns more than 15
    percent of the ownership interests in a person or a related
    party who:
            (a) owes, at the time of application, any $500 or
        more in delinquent cigarette taxes that have been
        determined by law to be due and unpaid, unless the
        license applicant has entered into an agreement
        approved by the Department to pay the amount due;
            (b) had a license under this Act revoked within the
        past 2 years by the Department for willful misconduct
        relating to stolen or contraband cigarettes or has been
        convicted of a State or federal crime, punishable by
        imprisonment of one year or more, relating to stolen or
        contraband cigarettes;
            (c) is a distributor who manufactures cigarettes,
        whether in this State or out of this State, and who is
        neither (i) a participating manufacturer as defined in
        subsection II(jj) of the "Master Settlement Agreement"
        as defined in Sections 10 of the Tobacco Products
        Manufacturers' Escrow Act and the Tobacco Products
        Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS
        168/10 and 30 ILCS 167/10); nor (ii) in full compliance
        with Tobacco Products Manufacturers' Escrow Act and
        the Tobacco Products Manufacturers' Escrow Enforcement
        Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);
            (d) has been found by the Department, after notice
        and a hearing, to have willfully imported or caused to
        be imported into the United States for sale or
        distribution any cigarette in violation of 19 U.S.C.
        1681a;
            (e) has been found by the Department, after notice
        and a hearing, to have willfully imported or caused to
        be imported into the United States for sale or
        distribution or manufactured for sale or distribution
        in the United States any cigarette that does not fully
        comply with the Federal Cigarette Labeling and
        Advertising Act (15 U.S.C. 1331, et seq.); or
            (f) has been found by the Department, after notice
        and a hearing, to have willfully made a material false
        statement in the application or has willfully failed to
        produce records required to be maintained by this Act.
    Upon approval of such application and bond and payment of
the required annual license fee, the Department shall issue a
license to the applicant. Such license shall permit the
applicant to engage in business as a distributor at or from the
place shown in his application. All licenses issued by the
Department under this Act shall be valid for not to exceed one
year after issuance unless sooner revoked, canceled or
suspended as in this Act provided. No license issued under this
Act is transferable or assignable. Such license shall be
conspicuously displayed at the place of business for which it
is issued.
    No distributor licensee acquires any vested interest or
compensable property right in a license issued under this Act.
    A licensed distributor shall notify the Department of any
change in the information contained on the application form,
including any change in ownership, and shall do so within 30
days after any such change.
    Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to the
person requesting the hearing of the time and place fixed for
the hearing and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to that person. In the absence of a
protest and request for a hearing within 20 days, the
Department's decision shall become final without any further
determination being made or notice given.
(Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
    (35 ILCS 135/4d new)
    Sec. 4d. Sales of cigarettes to and by retailers. In-state
makers, manufacturers, or fabricators licensed as distributors
under Section 4 of this Act and out-of-state makers,
manufacturers, or fabricators holding permits under Section 7
of this Act may not sell original packages of cigarettes to
retailers. A retailer may sell only original packages of
cigarettes obtained from licensed distributors other than
in-state makers, manufacturers, or fabricators licensed as
distributors under Section 4 of this Act and out-of-state
makers, manufacturers, or fabricators holding permits under
Section 7 of this Act.
 
    (35 ILCS 135/7)  (from Ch. 120, par. 453.37)
    Sec. 7. Distributor's permits.
    (a) The Department may, in its discretion, upon
application, issue permits authorizing the collection of the
tax herein imposed by those out-of-State cigarette
manufacturers who are not required to be licensed as
distributors of cigarettes in this State, but who elect to
qualify under this Act as distributors of cigarettes in this
State, and who, to the satisfaction of the Department, furnish
adequate security to insure collection and payment of the tax,
provided that any such permit shall extend only to cigarettes
which such permittee manufacturer places in original packages
that are contained inside a sealed transparent wrapper, and
provided that no such permit shall be issued under this Act to
such a manufacturer who has obtained the permit provided for in
Section 4b(a) of the Cigarette Tax Act. Such distributor shall
be issued, without charge, a permit to collect such tax in such
manner, and subject to such reasonable regulations and
agreements as the Department shall prescribe. When so
authorized, it shall be the duty of such distributor to collect
the tax upon all cigarettes which he delivers (or causes to be
delivered) within this State to licensed distributors
purchasers, in the same manner and subject to the same
requirements as a distributor maintaining a place of business
within this State. Such permit shall be in such form as the
Department may prescribe and shall not be transferable or
assignable.
    The following are ineligible to receive a distributor's
permit under this Act:
    (1) a person who is not of good character and reputation in
the community in which he resides;
    (2) a person who has been convicted of a felony under any
Federal or State law, if the Department, after investigation
and a hearing, if requested by the applicant, determines that
such person has not been sufficiently rehabilitated to warrant
the public trust;
    (3) a corporation, if any officer, manager or director
thereof, or any stockholder or stockholders owning in the
aggregate more than 5% of the stock of such corporation, would
not be eligible to receive a permit under this Act for any
reason.
    With respect to cigarettes which come within the scope of
such a permit and which any such permittee delivers or causes
to be delivered in Illinois to licensed distributors
purchasers, such permittee shall collect the tax imposed by
this Act and shall remit such tax to the Department by the 5th
day of each month for the preceding calendar month. Each such
remittance shall be accompanied by a return filed with the
Department on a form to be prescribed and furnished by the
Department and shall disclose such information as the
Department may lawfully require. The Department may promulgate
rules to require that the permittee's return be accompanied by
appropriate computer-generated magnetic media supporting
schedule data in the format prescribed by the Department,
unless, as provided by rule, the Department grants an exception
upon petition of the permittee. Each such return shall be
accompanied by a copy of each invoice rendered by the permittee
to any licensed distributor purchaser to whom the permittee
delivered cigarettes of the type covered by the permit (or
caused cigarettes of the type covered by the permit to be
delivered) in Illinois during the period covered by such
return.
    Such authority and permit may be suspended, canceled or
revoked when, at any time, the Department considers that the
security given is inadequate, or that such tax can more
effectively be collected from the person using such cigarettes
in this State or through distributors located in this State, or
whenever the permittee violates any provision of this Act or
any lawful rule or regulation issued by the Department pursuant
to this Act or is determined to be ineligible for a
distributor's permit under this Act as provided in this
Section, or whenever the permittee shall notify the Department
in writing of his desire to have the permit canceled. The
Department shall have the power, in its discretion, to issue a
new permit after such suspension, cancellation or revocation,
except when the person who would receive the permit is
ineligible to receive a distributor's permit under this Act.
    All permits issued by the Department under this Act shall
be valid for not to exceed one year after issuance unless
sooner revoked, canceled or suspended as in this Act provided.
    (b) Out-of-state cigarette manufacturers who are not
required to be licensed as distributors of cigarettes in this
State and who do not elect to obtain approval under subsection
(a) to pay the tax imposed by this Act, but who elect to
qualify under this Act as distributors of cigarettes in this
State for purposes of shipping and delivering unstamped
original packages of cigarettes into this State to licensed
distributors, shall obtain a permit from the Department,
provided that no such permit shall be issued under this
subsection to a manufacturer who has obtained the permit
provided for in Section 4b(b) of the Cigarette Tax Act. These
permits shall be issued without charge in such form as the
Department may prescribe and shall not be transferable or
assignable.
    The following are ineligible to receive a distributor's
permit under this subsection:
        (1) a person who is not of good character and
    reputation in the community in which he or she resides;
        (2) a person who has been convicted of a felony under
    any federal or State law, if the Department, after
    investigation and a hearing, if requested by the applicant,
    determines that the person has not been sufficiently
    rehabilitated to warrant the public trust; and
        (3) a corporation, if any officer, manager or director
    thereof, or any stockholder or stockholders owning in the
    aggregate more than 5% of the stock of the corporation,
    would not be eligible to receive a permit under this Act
    for any reason.
    With respect to original packages of cigarettes such
permittee delivers or causes to be delivered in Illinois and
distributed to the public for promotional purposes without
consideration, the permittee shall pay the tax imposed by this
Act by remitting the amount thereof to the Department by the
5th day of each month covering cigarettes shipped or otherwise
delivered in Illinois for those purposes during the preceding
calendar month. The permittee, before delivering those
cigarettes or causing those cigarettes to be delivered in this
State, shall evidence his or her obligation to remit the taxes
due with respect to those cigarettes by imprinting language to
be prescribed by the Department on each original package of
cigarettes, in such place thereon and in such manner also to be
prescribed by the Department. The imprinted language shall
acknowledge the permittee's payment of or liability for the tax
imposed by this Act with respect to the distribution of those
cigarettes.
    With respect to cigarettes such permittee delivers or
causes to be delivered in Illinois to Illinois licensed
distributors or distributed to the public for promotional
purposes, the permittee shall, by the 5th day of each month,
file with the Department, a report covering cigarettes shipped
or otherwise delivered in Illinois to licensed distributors or
distributed to the public for promotional purposes during the
preceding calendar month on a form to be prescribed and
furnished by the Department and shall disclose such other
information as the Department may lawfully require. The
Department may promulgate rules to require that the permittee's
report be accompanied by appropriate computer-generated
magnetic media supporting schedule data in the format
prescribed by the Department, unless, as provided by rule, the
Department grants an exception upon petition of the permittee.
Each such report shall be accompanied by a copy of each invoice
rendered by the permittee to any purchaser to whom the
permittee delivered cigarettes of the type covered by the
permit (or caused cigarettes of the type covered by the permit
to be delivered) in Illinois during the period covered by such
report.
    Such permit may be suspended, canceled, or revoked whenever
the permittee violates any provision of this Act or any lawful
rule or regulation issued by the Department pursuant to this
Act, is determined to be ineligible for a distributor's permit
under this Act as provided in this Section, or notifies the
Department in writing of his or her desire to have the permit
canceled. The Department shall have the power, in its
discretion, to issue a new permit after such suspension,
cancellation, or revocation, except when the person who would
receive the permit is ineligible to receive a distributor's
permit under this Act.
    All permits issued by the Department under this Act shall
be valid for not to exceed one year after issuance unless
sooner revoked, canceled, or suspended as in this Act provided.
(Source: P.A. 79-387.)
 
    (35 ILCS 135/24)  (from Ch. 120, par. 453.54)
    Sec. 24. Any duly authorized employee of the Department may
arrest without warrant any person committing in his presence a
violation of any of the provisions of this Act, and may without
a search warrant seize any original packages of contraband
cigarettes not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original packages in
accordance with the provisions of this Act and any vending
device in which such packages may be found, and such original
packages or vending devices so seized shall be subject to
confiscation and forfeiture as hereinafter provided.
(Source: Laws 1953, p. 265.)
 
    (35 ILCS 135/25)  (from Ch. 120, par. 453.55)
    Sec. 25. After seizing any original packages of cigarettes,
or cigarette vending devices, as provided in Section 24 of this
Act, the Department shall hold a hearing and shall determine
whether such original packages of cigarettes, at the time of
their seizure by the Department, were contraband cigarettes not
tax stamped or tax imprinted underneath the sealed transparent
wrapper of such original packages in accordance with this Act,
or whether such cigarette vending devices, at the time of their
seizure by the Department, contained original packages of
contraband cigarettes not tax stamped or tax imprinted
underneath the sealed transparent wrapper of such original
packages as required by this Act. The Department shall give not
less than 7 days' notice of the time and place of such hearing
to the owner of such property if he is known, and also to the
person in whose possession the property so taken was found, if
such person is known and if such person in possession is not
the owner of said property. In case neither the owner nor the
person in possession of such property is known, the Department
shall cause publication of the time and place of such hearing
to be made at least once in each week for 3 weeks successively
in a newspaper of general circulation in the county where such
hearing is to be held.
    If, as the result of such hearing, the Department shall
determine that the original packages of cigarettes seized were
at the time of seizure contraband cigarettes not tax stamped or
tax imprinted underneath the sealed transparent wrapper of such
original packages as required by this Act, or that any
cigarette vending device at the time of its seizure contained
original packages of contraband cigarettes not tax stamped or
tax imprinted underneath the sealed transparent wrapper of such
original packages as required by this Act, the Department shall
enter an order declaring such original packages of cigarettes
or such cigarette vending devices confiscated and forfeited to
the State, and to be held by the Department for disposal by it
as provided in Section 27 of this Act. The Department shall
give notice of such order to the owner of such property if he
is known, and also to the person in whose possession the
property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
such order to be made at least once in each week for 3 weeks
successively in a newspaper of general circulation in the
county where such hearing was held.
(Source: P.A. 76-685.)
 
    (35 ILCS 135/25a)  (from Ch. 120, par. 453.55a)
    Sec. 25a. Possession of more than 100 original packages of
contraband cigarettes; penalty. With the exception of licensed
distributors or transporters, as defined in Section 9c of the
Cigarette Tax Act, possessing unstamped original packages of
cigarettes, and licensed distributors possessing original
packages of cigarettes that bear a tax stamp of another state
or taxing jurisdiction, anyone possessing more than 100
packages of contraband cigarettes contained in original
packages is which are not tax stamped as required by this Act,
or which are improperly tax stamped, shall be liable to pay, to
the Department for deposit into in the Tax Compliance and
Administration Fund State Treasury, a penalty of $25 $15 for
each such package of cigarettes in excess of 100 packages,
unless reasonable cause can be established by the person upon
whom the penalty is imposed. Reasonable cause shall be
determined in each situation in accordance with rules adopted
by the Department. The provisions of the Uniform Penalty and
Interest Act do not apply to this Section. Such penalty may be
recovered by the Department in a civil action.
(Source: P.A. 83-1428.)
 
    (35 ILCS 135/25b)
    Sec. 25b. Possession of not less than 10 and not more than
100 original packages not tax stamped or improperly tax
stamped; penalty. With the exception of licensed distributors
and transporters, as defined in Section 9c of the Cigarette Tax
Act, possessing unstamped packages of cigarettes, and licensed
distributors possessing original packages of cigarettes that
bear a tax stamp of another state or taxing jurisdiction,
anyone possessing not less than 10 and not more than 100
packages of contraband cigarettes contained in original
packages that are not tax stamped as required by this Act, or
that are improperly tax stamped, is liable to pay to the
Department, for deposit into the Tax Compliance and
Administration Fund, a penalty of $20 $10 for each such package
of cigarettes, unless reasonable cause can be established by
the person upon whom the penalty is imposed. Reasonable cause
shall be determined in each situation in accordance with rules
adopted by the Department. Any person who purchases and
possesses a total of 9 or fewer original packages of unstamped
cigarettes per month is exempt from the penalties of this
Section. The provisions of the Uniform Penalty and Interest Act
do not apply to this Section.
(Source: P.A. 92-322, eff. 1-1-02.)
 
    (35 ILCS 135/30)  (from Ch. 120, par. 453.60)
    Sec. 30. Punishment for sale or possession of unstamped
packages of cigarettes, other than by a licensed distributor or
transporter.
    (a) Possession or sale of more than 9 but less than 101
unstamped packages of cigarettes. With the exception of
licensed distributors or transporters, as defined in Section 9c
of the Cigarette Tax Act, any person who has in his or her
possession or sells more than 9 but less than 101 original
packages of contraband cigarettes is guilty of a Class A
misdemeanor.
    (b) Possession or sale of more than 100 but less than 251
unstamped packages of cigarettes. With the exception of
licensed distributors or transporters, as defined in Section 9c
of the Cigarette Tax Act, any person who has in his or her
possession or sells more than 100 but less than 251 original
packages of contraband cigarettes is guilty of a Class A
misdemeanor for the first offense and a Class 4 felony for each
subsequent offense.
    (c) Possession or sale of more than 250 but less than 1,001
unstamped packages of cigarettes. With the exception of
licensed distributors or transporters, as defined in Section 9c
of the Cigarette Tax Act, any person who has in his or her
possession or sells more than 250 but less than 1,001 original
packages of contraband cigarettes is guilty of a Class 4
felony.
    (d) Possession or sale of more than 1,000 contraband
packages of cigarettes. With the exception of licensed
distributors or transporters, as defined in Section 9c of the
Cigarette Tax Act, any person who has in his or her possession
or sells, more than 1,000 original packages of contraband
cigarettes is guilty of a Class 3 felony.
    (e) Any person licensed as a distributor or transporter, as
defined in Section 9c of the Cigarette Tax Act, who has in his
or her possession or sells 100 or less original packages of
contraband cigarettes is guilty of a Class A misdemeanor.
    (f) Any person licensed as a distributor or transporter, as
defined in Section 9c of the Cigarette Tax Act, who has in his
or her possession or sells more than 100 original packages of
contraband cigarettes is guilty of a Class 4 felony.
    (g) Notwithstanding subsections (e) through (f), licensed
distributors and transporters, as defined in Section 9c of the
Cigarette Tax Act, may possess unstamped packages of
cigarettes. Notwithstanding subsections (e) through (f),
licensed distributors may possess cigarettes that bear a tax
stamp of another state or taxing jurisdiction. Notwithstanding
subsections (e) through (f), a licensed distributor may possess
contraband cigarettes returned to the distributor by a retailer
if the distributor immediately conducts an inventory of the
cigarettes being returned, the distributor and the retailer
returning the contraband cigarettes sign the inventory, the
distributor provides a copy of the signed inventory to the
retailer, and the distributor retains the inventory in its
books and records and promptly notifies the Department of
Revenue.
    (h) Notwithstanding subsections (a) through (d) of this
Section, a retailer unknowingly possessing contraband
cigarettes obtained from a licensed distributor or knowingly
possessing contraband cigarettes obtained from a licensed
distributor is not subject to penalties under this Section if
the retailer, within 48 hours after discovering that the
cigarettes are contraband cigarettes, excluding Saturdays,
Sundays, and holidays: (i) notifies the Department and the
licensed distributor from whom the cigarettes were obtained,
orally and in writing, that he or she possesses contraband
cigarettes obtained from a licensed distributor; (ii) places
the contraband cigarettes in one or more containers and seals
those containers; and (iii) places on the containers the
following or similar language: "Contraband Cigarettes. Not For
Sale." All contraband cigarettes in the possession of a
retailer remain subject to forfeiture under the provisions of
this Act.
Any person other than a licensed distributor who sells, offers
for sale, or has in his possession with intent to sell or offer
for sale, more than 100 original packages, not tax stamped or
tax imprinted underneath the sealed transparent wrapper of such
original package in accordance with this Act, shall be guilty
of a Class 4 felony.
    Any person other than a licensed distributor who sells,
offers for sale, or has in his possession with intent to sell
or offer for sale, 100 or fewer original packages, not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of the original package in accordance with this Act, is
guilty of a Class A misdemeanor for the first offense and a
Class 4 felony for each subsequent offense.
    Any distributor who sells an original package of
cigarettes, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, except when the sale is made under
such circumstances that the tax imposed by this Act may not
legally be levied because of the Constitution or laws of the
United States, shall be guilty of a Class 3 felony.
(Source: P.A. 92-322, eff. 1-1-02.)
 
    (35 ILCS 135/3-15 rep.)
    Section 20. The Cigarette Use Tax Act is amended by
repealing Section 3-15.
 
    Section 25. The Prevention of Cigarette Sales to Minors Act
is amended by changing Sections 2, 5, 6, 7, 8, and 10 and by
adding Section 33 as follows:
 
    (720 ILCS 678/2)
    (This Section may contain text from a Public Act with a
delayed effective date)
    Sec. 2. Definitions. For the purpose of this Act:
    "Cigarette", when used in this Act, means any roll for
smoking made wholly or in part of tobacco irrespective of size
or shape and whether or not the tobacco is flavored,
adulterated, or mixed with any other ingredient, and the
wrapper or cover of which is made of paper or any other
substance or material except whole leaf tobacco.
    "Clear and conspicuous statement" means the statement is of
sufficient type size to be clearly readable by the recipient of
the communication.
    "Consumer" means an individual who acquires or seeks to
acquire cigarettes for personal use.
    "Delivery sale" means any sale of cigarettes to a consumer
if:
        (a) the consumer submits the order for such sale by
    means of a telephone or other method of voice transmission,
    the mails, or the Internet or other online service, or the
    seller is otherwise not in the physical presence of the
    buyer when the request for purchase or order is made; or
        (b) the cigarettes are delivered by use of a common
    carrier, private delivery service, or the mails, or the
    seller is not in the physical presence of the buyer when
    the buyer obtains possession of the cigarettes.
    "Delivery service" means any person (other than a person
that makes a delivery sale) who delivers to the consumer the
cigarettes sold in a delivery sale.
    "Department" means the Department of Revenue.
    "Government-issued identification" means a State driver's
license, State identification card, passport, a military
identification or an official naturalization or immigration
document, such as an alien registration recipient card
(commonly known as a "green card") or an immigrant visa.
    "Legal minimum age" means the minimum age at which an
individual may legally purchase cigarettes within this State,
as determined by either State or local government.
    "Mails" or "mailing" mean the shipment of cigarettes
through the United States Postal Service.
    "Out-of-state sale" means a sale of cigarettes to a
consumer located outside of this State where the consumer
submits the order for such sale by means of a telephonic or
other method of voice transmission, the mails or any other
delivery service, facsimile transmission, or the Internet or
other online service and where the cigarettes are delivered by
use of the mails or other delivery service.
    "Person" means any individual, corporation, partnership,
limited liability company, association, or other organization
that engages in any for-profit or not-for-profit activities.
    "Shipping package" means a container in which packs or
cartons of cigarettes are shipped in connection with a delivery
sale.
    "Shipping documents" means bills of lading, air bills, or
any other documents used to evidence the undertaking by a
delivery service to deliver letters, packages, or other
containers.
    "Within this State" means within the exterior limits of the
State of Illinois and includes all territory within these
limits owned by or ceded to the United States of America.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (720 ILCS 678/5)
    Sec. 5. Unlawful shipment or transportation of cigarettes.
    (a) It is unlawful for any person engaged in the business
of selling cigarettes to ship or cause to be shipped any
cigarettes unless the person shipping the cigarettes:
        (1) is licensed as a distributor under either the
    Cigarette Tax Act, or the Cigarette Use Tax Act; or
    delivers the cigarettes to a distributor licensed under
    either the Cigarette Tax Act or the Cigarette Use Tax Act;
    or
        (2) ships them to an export warehouse proprietor
    pursuant to Chapter 52 of the Internal Revenue Code, or an
    operator of a customs bonded warehouse pursuant to Section
    1311 or 1555 of Title 19 of the United States Code.
    For purposes of this subsection (a), a person is a licensed
distributor if the person's name appears on a list of licensed
distributors published by the Illinois Department of Revenue.
The term cigarette has the same meaning as defined in Section 1
of the Cigarette Tax Act and Section 1 of the Cigarette Use Tax
Act. Nothing in this Act prohibits a person licensed as a
distributor under the Cigarette Tax Act or the Cigarette Use
Tax Act from shipping or causing to be shipped any cigarettes
to a registered retailer under the Retailers' Occupation Tax
Act and the Cigarette Tax Act provided the cigarette tax or
cigarette use tax has been paid.
    (b) A common or contract carrier may transport cigarettes
to any individual person in this State only if the carrier
reasonably believes such cigarettes have been received from a
person described in paragraph (a)(1). Common or contract
carriers may make deliveries of cigarettes to licensed
distributors described in paragraph (a)(1) of this Section.
Nothing in this subsection (b) shall be construed to prohibit a
person other than a common or contract carrier from
transporting not more than 1,000 cigarettes at any one time to
any person in this State.
    (c) A common or contract carrier may not complete the
delivery of any cigarettes to persons other than those
described in paragraph (a)(1) of this Section without first
obtaining from the purchaser an official written
identification from any state or federal agency that displays
the person's date of birth or a birth certificate that includes
a reliable confirmation that the purchaser is at least 18 years
of age; that the cigarettes purchased are not intended for
consumption by an individual who is younger than 18 years of
age; and a written statement signed by the purchaser that
certifies the purchaser's address and that the purchaser is at
least 18 years of age. The statement shall also confirm: (1)
that the purchaser understands that signing another person's
name to the certification is illegal; (2) that the sale of
cigarettes to individuals under 18 years of age is illegal; and
(3) that the purchase of cigarettes by individuals under 18
years of age is illegal under the laws of Illinois.
    (d) When a person engaged in the business of selling
cigarettes ships or causes to be shipped any cigarettes to any
person in this State, other than in the cigarette
manufacturer's or tobacco products manufacturer's original
container or wrapping, the container or wrapping must be
plainly and visibly marked with the word "cigarettes".
    (e) When a peace officer of this State or any duly
authorized officer or employee of the Illinois Department of
Public Health or Department of Revenue discovers any cigarettes
which have been or which are being shipped or transported in
violation of this Section, he or she shall seize and take
possession of the cigarettes, and the cigarettes shall be
subject to a forfeiture action pursuant to the procedures
provided under the Cigarette Tax Act or Cigarette Use Tax Act.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (720 ILCS 678/6)
    (This Section may contain text from a Public Act with a
delayed effective date)
    Sec. 6. Prevention of delivery sales to minors.
    (a) No person shall make a delivery sale of cigarettes to
any individual who is under 18 years of the legal minimum age.
    (b) Each person accepting a purchase order for a delivery
sale shall comply with the provisions of this Act and all other
laws of this State generally applicable to sales of cigarettes
that occur entirely within this State, including, but not
limited to, those laws imposing: (i) excise taxes; (ii) sales
taxes; (iii) license and revenue-stamping requirements; and
(iv) escrow payment obligations.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (720 ILCS 678/7)
    (This Section may contain text from a Public Act with a
delayed effective date)
    Sec. 7. Age verification and shipping requirements to
prevent delivery sales to minors.
    (a) No person, other than a delivery service, shall mail,
ship, or otherwise cause to be delivered a shipping package in
connection with a delivery sale unless the person:
        (1) prior to the first delivery sale to the prospective
    consumer, obtains from the prospective consumer a written
    certification which includes a statement signed by the
    prospective consumer that certifies:
            (A) the prospective consumer's current address;
        and
            (B) that the prospective consumer is at least the
        legal minimum age;
        (2) informs, in writing, such prospective consumer
    that:
            (A) the signing of another person's name to the
        certification described in this Section is illegal;
            (B) sales of cigarettes to individuals under 18
        years of the legal minimum age are illegal;
            (C) the purchase of cigarettes by individuals
        under 18 years of the legal minimum age is illegal; and
            (D) the name and identity of the prospective
        consumer may be reported to the state of the consumer's
        current address under the Act of October 19, 1949 (15
        U.S.C. 375, et seq.), commonly known as the Jenkins
        Act;
        (3) makes a good faith effort to verify the date of
    birth of the prospective consumer provided pursuant to this
    Section by:
            (A) comparing the date of birth against a
        commercially available database; or
            (B) obtaining a photocopy or other image of a
        valid, government-issued identification stating the
        date of birth or age of the prospective consumer;
        (4) provides to the prospective consumer a notice that
    meets the requirements of subsection (b);
        (5) receives payment for the delivery sale from the
    prospective consumer by a credit or debit card that has
    been issued in such consumer's name, or by a check or other
    written instrument in such consumer's name; and
        (6) ensures that the shipping package is delivered to
    the same address as is shown on the government-issued
    identification or contained in the commercially available
    database.
    (b) The notice required under this Section shall include:
        (1) a statement that cigarette sales to consumers below
    18 years of the legal minimum age are illegal;
        (2) a statement that sales of cigarettes are restricted
    to those consumers who provide verifiable proof of age in
    accordance with subsection (a);
        (3) a statement that cigarette sales are subject to tax
    under Section 2 of the Cigarette Tax Act (35 ILCS 130/2),
    Section 2 of the Cigarette Use Tax Act, and Section 3 of
    the Use Tax Act and an explanation of how the correct such
    tax has been, or is to be, paid with respect to such
    delivery sale.
    (c) A statement meets the requirement of this Section if:
        (1) the statement is clear and conspicuous;
        (2) the statement is contained in a printed box set
    apart from the other contents of the communication;
        (3) the statement is printed in bold, capital letters;
        (4) the statement is printed with a degree of color
    contrast between the background and the printed statement
    that is no less than the color contrast between the
    background and the largest text used in the communication;
    and
        (5) for any printed material delivered by electronic
    means, the statement appears at both the top and the bottom
    of the electronic mail message or both the top and the
    bottom of the Internet website homepage.
    (d) Each person, other than a delivery service, who mails,
ships, or otherwise causes to be delivered a shipping package
in connection with a delivery sale shall:
        (1) include as part of the shipping documents a clear
    and conspicuous statement stating: "Cigarettes: Illinois
    Law Prohibits Shipping to Individuals Under 18 and Requires
    the Payment of All Applicable Taxes";
        (2) use a method of mailing, shipping, or delivery that
    requires a signature before the shipping package is
    released to the consumer; and
        (3) ensure that the shipping package is not delivered
    to any post office box.
(Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
    (720 ILCS 678/8)
    (This Section may contain text from a Public Act with a
delayed effective date)
    Sec. 8. Registration and reporting requirements to prevent
delivery sales to minors.
    (a) Not later than the 15th day of each month, each person
making a delivery sale during the previous calendar month shall
file a report with the Department containing the following
information: Each person who makes a delivery sale of
cigarettes to a consumer located within this State shall file
with the Department for each individual sale:
        (1) the seller's a statement setting forth such
    person's name, trade name, and the address of such person's
    principal place of business and any other place of
    business; and
        (2) not later than the tenth day of each calendar
    month, a memorandum or copy of the invoice for each and
    every such delivery sale made during the previous calendar
    month, which includes the following information:
        (2) (A) the name and address of the consumer to whom
    such delivery sale was made;
        (3) (B) the brand style or brand styles of the
    cigarettes that were sold in such delivery sale;
        (4) (C) the quantity of cigarettes that were sold in
    such delivery sale; and
        (5) (D) an indication of whether or not the cigarettes
    sold in the delivery sale bore a tax stamp evidencing
    payment of the tax under Section 2 of the Cigarette Tax Act
    (35 ILCS 130/2); and .
        (6) such other information the Department may require.
    (b) Each person engaged in business within this State who
makes an out-of-state sale shall, for each individual sale,
submit to the appropriate tax official of the state in which
the consumer is located the information required in subsection
(a).
    (c) Any person that satisfies the requirements of 15 U.S.C.
Section 376 shall be deemed to satisfy the requirements of
subsections (a) and (b).
    (d) The Department is authorized to disclose to the
Attorney General any information received under this title and
requested by the Attorney General. The Department and the
Attorney General shall share with each other the information
received under this title and may share the information with
other federal, State, or local agencies for purposes of
enforcement of this title or the laws of the federal government
or of other states.
    (e) This Section shall not be construed to impose liability
upon any delivery service, or officers or employees thereof,
when acting within the scope of business of the delivery
service.
    (f) The Department may establish procedures requiring
electronic transmission of the information required by this
Section directly to the Department on forms prescribed and
furnished by the Department.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (720 ILCS 678/10)
    Sec. 10. Violation.
    (a) A person who violates subsection (a), (b), or (c) of
Section 5 or Section 6, 7, 8, or 9 is guilty of a Class A
misdemeanor. A second or subsequent violation of subsection
(a), (b), or (c) of Section 5 or Section 6, 7, 8, or 9 is a
Class 4 felony.
    (b) The Department of Revenue shall impose a civil penalty
not to exceed $5,000 on any person who violates subsection (a),
(b), or (c) of Section 5 or Section 6, 7, 8, or 9. The
Department of Revenue shall impose a civil penalty not to
exceed $5,000 on any person engaged in the business of selling
cigarettes who ships or causes to be shipped any such
cigarettes to any person in this State in violation of
subsection (d) of Section 5. Civil penalties imposed and
collected by the Department shall be deposited into the Tax
Compliance and Administration Fund.
    (c) All cigarettes sold or attempted to be sold in a
delivery sale that does not meet the requirements of this Act
shall be forfeited to the State. All cigarettes forfeited to
this State under this Act shall be destroyed or maintained and
used in an undercover capacity. The Department may, prior to
any destruction of cigarettes, permit the true holder of the
trademark rights in the cigarette brand to inspect such
contraband cigarettes, in order to assist the Department in any
investigation regarding such cigarettes.
    (d) Any person aggrieved by any decision of the Department
of Revenue may, within 60 days after notice of that decision,
protest in writing and request a hearing. The Department of
Revenue shall give notice to the person of the time and place
for the hearing and shall hold a hearing before it issues a
final administrative decision. Absent a written protest within
60 days, the Department's decision shall become final without
any further determination made or notice given.
    (e) The penalties provided for in this Section are in
addition to any other penalties provided for by law.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    (720 ILCS 678/33 new)
    Sec. 33. Rulemaking. The Department may adopt rules to
implement and administer this Act.
 
    Section 90. "An Act concerning revenue", approved April 10,
2009, Public Act 95-1053, is amended by changing Section 10 as
follows:
 
    (P.A. 95-1053, Sec. 10)
    Sec. 10. The Cigarette Tax Act is amended by repealing
Section Sections 9c and 28.
(Source: P.A. 95-1053, eff. 1-1-10.)
 
    Section 99. Effective date. This Act takes effect January
1, 2010, except that Sections 90 and 99 take effect upon
becoming law.