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Public Act 92-0231
SB853 Enrolled LRB9204504REdv
AN ACT concerning taxes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Tobacco Products Tax Act of 1995 is
amended by changing Sections 10-5, 10-10, 10-20, and 10-50 as
follows:
(35 ILCS 143/10-5)
Sec. 10-5. Definitions. For purposes of this Act:
"Business" means any trade, occupation, activity, or
enterprise engaged in, at any location whatsoever, for the
purpose of selling tobacco products in this State.
"Cigarette" has the meaning ascribed to the term in
Section 1 of the Cigarette Tax Act.
"Correctional Industries program" means a program run by
a State penal institution in which residents of the penal
institution produce tobacco products for sale to persons
incarcerated in penal institutions or resident patients of a
State operated mental health facility.
"Department" means the Illinois Department of Revenue.
"Distributor" means any of the following:
(1) Any manufacturer or wholesaler in this State
engaged in the business of selling tobacco products who
sells, exchanges, or distributes tobacco products to
retailers or consumers in this State.
(2) Any manufacturer or wholesaler located outside
of Illinois engaged in the business of selling tobacco
products from without this State who sells, exchanges,
distributes, ships, or transports tobacco products to
retailers or consumers located in this State, so long as
that manufacturer or wholesaler has or maintains within
this State, directly or by subsidiary, an office, sales
house, or other place of business, or any agent or other
representative operating within this State under the
authority of the person or subsidiary, irrespective of
whether the place of business or agent or other
representative is located here permanently or
temporarily.
(3) Any retailer who receives tobacco products on
which the tax has not been or will not be paid by another
distributor.
"Distributor" does not include any person, wherever
resident or located, who makes, manufactures, or fabricates
tobacco products as part of a Correctional Industries program
for sale to residents incarcerated in penal institutions or
resident patients of a State operated mental health facility.
"Manufacturer" means any person, wherever resident or
located, who manufactures and sells tobacco products, except
a person who makes, manufactures, or fabricates tobacco
products as a part of a Correctional Industries program for
sale to persons incarcerated in penal institutions or
resident patients of a State operated mental health facility.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, limited
liability company, or public or private corporation, however
formed, or a receiver, executor, administrator, trustee,
conservator, or other representative appointed by order of
any court.
"Place of business" means and includes any place where
tobacco products are sold or where tobacco products are
manufactured, stored, or kept for the purpose of sale or
consumption, including any vessel, vehicle, airplane, train,
or vending machine.
"Retailer" means any person in this State engaged in the
business of selling tobacco products to consumers in this
State, regardless of quantity or number of sales.
"Sale" means any transfer, exchange, or barter in any
manner or by any means whatsoever for a consideration and
includes all sales made by persons.
"Tobacco products" means any cigars; cheroots; stogies;
periques; granulated, plug cut, crimp cut, ready rubbed, and
other smoking tobacco; snuff or snuff flour; cavendish; plug
and twist tobacco; fine-cut and other chewing tobaccos;
shorts; refuse scraps, clippings, cuttings, and sweeping of
tobacco; and other kinds and forms of tobacco, prepared in
such manner as to be suitable for chewing or smoking in a
pipe or otherwise, or both for chewing and smoking; but does
not include cigarettes or tobacco purchased for the
manufacture of cigarettes by cigarette distributors and
manufacturers defined in the Cigarette Tax Act and persons
who make, manufacture, or fabricate 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.
"Wholesale price" means the established list price for
which a manufacturer sells tobacco products to a distributor,
before the allowance of any discount, trade allowance,
rebate, or other reduction. In the absence of such an
established list price, the manufacturer's invoice price at
which the manufacturer sells the tobacco product to
unaffiliated distributors, before any discounts, trade
allowances, rebates, or other reductions, shall be presumed
to be the wholesale price.
"Wholesaler" means any person, wherever resident or
located, engaged in the business of selling tobacco products
to others for the purpose of resale.
(Source: P.A. 89-21, eff. 6-6-95.)
(35 ILCS 143/10-10)
Sec. 10-10. Tax imposed. On the first day of the third
month after the month in which this Act becomes law, a tax is
imposed on any person engaged in business as a distributor of
tobacco products, as defined in Section 10-5, at the rate of
18% of the wholesale price of tobacco products sold or
otherwise disposed of to retailers or consumers located in
this State. The tax is in addition to all other occupation or
privilege taxes imposed by the State of Illinois, by any
political subdivision thereof, or by any municipal
corporation. However, the tax is not imposed upon any
activity in that business in interstate commerce or
otherwise, to the extent to which that activity may not,
under the Constitution and Statutes of the United States, be
made the subject of taxation by this State. The tax is also
not imposed on sales made to the United States or any entity
thereof.
All moneys received by the Department under this Act
shall be paid into the Long-Term Care Provider Fund of the
State Treasury.
(Source: P.A. 89-21, eff. 6-6-95.)
(35 ILCS 143/10-20)
Sec. 10-20. Licenses. It shall be unlawful for any
person to engage in business as a distributor of tobacco
products in this State within the meaning of this Act without
first having obtained a license to do so from the Department.
Application for that license shall be made to the Department
in a form prescribed and furnished by the Department. Each
applicant for a license shall furnish to the Department on a
form, signed and verified by the applicant, the following
information:
(1) The name of the applicant.
(2) The address of the location at which the
applicant proposes to engage in business as a distributor
of tobacco products in this State.
(3) Other information the Department may reasonably
require.
Except as otherwise provided in this Section, every
applicant who is required to procure a distributor's license
shall file with his or her application a joint and several
bond. The 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,
conditioned upon the true and faithful compliance by the
licensee with all of the provisions of this Act. The
Department shall fix the amount of the bond for each
applicant, taking into consideration the amount of money
expected to become due from the applicant under this Act.
The amount of bond required by the Department shall be an
amount that, in its opinion, will protect the State of
Illinois against failure to pay the amount that may become
due from the applicant under this Act, but the amount of the
security required by the Department shall not exceed 3 times
the amount of the applicant's average monthly tax liability,
or $50,000, whichever amount is lower. The bond, a reissue,
or a substitute shall be kept in full force and effect during
the entire period covered by the license. A separate
application for license shall be made, and bond filed, for
each place of business at which a person who is required to
procure a distributor's license proposes to engage in
business as a distributor in Illinois under this Act.
The Department, upon receipt of an application and bond
in proper form, shall issue to the applicant a license, in a
form prescribed by the Department, which shall permit the
applicant to whom it is issued to engage in business as a
distributor at the place shown on his or her application.
The license shall be issued by the Department without charge
or cost to the applicant. No license issued under this Act
is transferable or assignable. The license shall be
conspicuously displayed in the place of business conducted by
the licensee in Illinois under the license.
The bonding requirement in this Section does not apply to
an applicant for a distributor's license who is already
bonded under the Cigarette Tax Act or the Cigarette Use Tax
Act. Licenses 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.
No license shall be issued to any person who is in
default to the State of Illinois for moneys due under this
Act or any other tax Act administered by the Department.
The Department may, in its discretion, upon application,
authorize the payment of the tax imposed under Section 10-10
by any distributor or manufacturer not otherwise subject to
the tax imposed under this Act who, to the satisfaction of
the Department, furnishes adequate security to ensure payment
of the tax. The distributor or manufacturer shall be issued,
without charge, a license to remit the tax. When so
authorized, it shall be the duty of the distributor or
manufacturer to remit the tax imposed upon the wholesale
price of tobacco products sold or otherwise disposed of to
retailers or consumers located in this State, in the same
manner and subject to the same requirements as any other a
distributor or manufacturer licensed under this Act operating
within this State.
Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of that
decision, protest and request a hearing, whereupon the
Department must give notice to that person of the time and
place fixed for the hearing and must 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 such a protest within 20 days, the
Department's decision becomes final without any further
determination being made or notice given.
(Source: P.A. 89-21, eff. 6-6-95.)
(35 ILCS 143/10-50)
Sec. 10-50. Violations and penalties. When the amount
due is under $300, any distributor who fails to file a
return, wilfully fails or refuses to make any payment to the
Department of the tax imposed by this Act, or files a
fraudulent return, or any officer or agent of a corporation
engaged in the business of distributing tobacco products to
retailers and consumers located in this State who signs a
fraudulent return filed on behalf of the corporation, or any
accountant or other agent who knowingly enters false
information on the return of any taxpayer under this Act is
guilty of a Class 4 felony.
Any person who violates any provision of Section 10-20 of
this Act, fails to keep books and records as required under
this Act, or wilfully violates a rule or regulation of the
Department for the administration and enforcement of this Act
is guilty of a Class 4 felony. A person commits a separate
offense on each day that he or she engages in business in
violation of Section 10-20 of this Act.
When the amount due is under $300, any person who accepts
money that is due to the Department under this Act from a
taxpayer for the purpose of acting as the taxpayer's agent to
make the payment to the Department, but who fails to remit
the payment to the Department when due, is guilty of a Class
4 felony.
When the amount due is $300 or more, any distributor who
files, or causes to be filed, a fraudulent return, or any
officer or agent of a corporation engaged in the business of
distributing tobacco products to retailers and consumers
located in this State who files or causes to be filed or
signs or causes to be signed a fraudulent return filed on
behalf of the corporation, or any accountant or other agent
who knowingly enters false information on the return of any
taxpayer under this Act is guilty of a Class 3 felony.
When the amount due is $300 or more, any person engaged
in the business of distributing tobacco products to retailers
and consumers located in this State who fails to file a
return, wilfully fails or refuses to make any payment to the
Department of the tax imposed by this Act, or accepts money
that is due to the Department under this Act from a taxpayer
for the purpose of acting as the taxpayer's agent to make
payment to the Department but fails to remit such payment to
the Department when due is guilty of a Class 3 felony.
Any person whose principal place of business is in this
State and who is charged with a violation under this Section
shall be tried in the county where his or her principal place
of business is located unless he or she asserts a right to be
tried in another venue. If the taxpayer does not have his or
her principal place of business in this State, however, the
hearing must be held in Sangamon County unless the taxpayer
asserts a right to be tried in another venue.
Any taxpayer or agent of a taxpayer who with the intent
to defraud purports to make a payment due to the Department
by issuing or delivering a check or other order upon a real
or fictitious depository for the payment of money, knowing
that it will not be paid by the depository, is guilty of a
deceptive practice in violation of Section 17-1 of the
Criminal Code of 1961.
A prosecution for a violation described in this Section
may be commenced within 3 years after the commission of the
act constituting the violation.
(Source: P.A. 89-21, eff. 6-6-95.)
Section 99. Effective date. This Act takes effect upon
becoming law.
Passed in the General Assembly May 10, 2001.
Approved August 02, 2001.
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