100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB3141

 

Introduced 2/15/2018, by Sen. Karen McConnaughay

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation Tax Act, the Cigarette Tax Act, and the Cigarette Use Tax Act. Provides that a taxpayer is prohibited from introducing into evidence in a proceeding before the Department of Revenue, Tax Tribunal, or court any books or records that the taxpayer failed to produce to the Department for examination, unless the books and records are received by the Department no less than 5 business days prior to seeking introduction of the books and records in the proceeding. Sets forth penalties for failure to keep or produce certain books and records. Requires distributors and secondary distributors who purchase cigarettes for shipment into Illinois from a point outside this State to make the invoices available for inspection upon demand by a duly authorized employee of the Department. Provides that the Department may assess taxes, penalties, and interest on original packages of cigarettes that do not contain property tax stamps. Provides that, if a person fails to produce records for inspection by the Department upon request, a prima facie presumption shall arise that the person has failed to keep the records so required. Provides that the sale of individual or loose cigarettes is prohibited. Amends the Tobacco Products Tax Act of 1995 to make changes concerning penalties for failure to keep and produce books and records. Effective immediately.


LRB100 20670 HLH 36122 b

 

 

A BILL FOR

 

SB3141LRB100 20670 HLH 36122 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
511 as follows:
 
6    (35 ILCS 105/11)  (from Ch. 120, par. 439.11)
7    Sec. 11. Every retailer required or authorized to collect
8taxes hereunder and every person using in this State tangible
9personal property purchased at retail from a retailer on or
10after the effective date hereof shall keep such records,
11receipts, invoices and other pertinent books, documents,
12memoranda and papers as the Department shall require, in such
13form as the Department shall require. The Department may adopt
14rules that establish requirements, including record forms and
15formats, for records required to be kept and maintained by
16taxpayers. For purposes of this Section, "records" means all
17data maintained by the taxpayer, including data on paper,
18microfilm, microfiche or any type of machine-sensible data
19compilation. For the purpose of administering and enforcing the
20provisions hereof, the Department, or any officer or employee
21of the Department designated, in writing, by the Director
22thereof, may hold investigations and hearings concerning any
23matters covered herein and may examine any books, papers,

 

 

SB3141- 2 -LRB100 20670 HLH 36122 b

1records, documents or memoranda of any retailer or purchaser
2bearing upon the sales or purchases of tangible personal
3property, the privilege of using which is taxed hereunder, and
4may require the attendance of such person or any officer or
5employee of such person, or of any person having knowledge of
6the facts, and may take testimony and require proof for its
7information.
8    A taxpayer is prohibited from introducing into evidence in
9a proceeding before the Department, Tax Tribunal, or court any
10books or records that the taxpayer failed to produce to the
11Department for examination as required by this Section and the
12rules adopted by the Department unless the books and records
13are received by the Department no less than 5 business days
14prior to seeking introduction of the books and records in the
15proceeding.
16    Any person who fails to keep books and records or fails to
17produce books and records for examination as required by this
18Section and the rules adopted by the Department, including any
19officer or director of any corporation, any partner or member
20of any partnership, any manager or member of any limited
21liability company, or any other person responsible for filing
22returns, shall be liable to pay to the Department, for deposit
23into the Tax Compliance and Administration Fund, a penalty of
24$1,000 for the first failure to keep or produce such books and
25records and penalty of $3,000 for each subsequent failure to
26keep or produce such books and records. The Department may

 

 

SB3141- 3 -LRB100 20670 HLH 36122 b

1adopt rules to administer the penalties under this Section.
2(Source: P.A. 88-480.)
 
3    Section 10. The Service Use Tax Act is amended by changing
4Section 11 as follows:
 
5    (35 ILCS 110/11)  (from Ch. 120, par. 439.41)
6    Sec. 11. Every serviceman required or authorized to collect
7taxes hereunder and every user who is subject to the tax
8imposed by this Act shall keep such records, receipts, invoices
9and other pertinent books, documents, memoranda and papers as
10the Department shall require, in such form as the Department
11shall require. The Department may adopt rules that establish
12requirements, including record forms and formats, for records
13required to be kept and maintained by taxpayers. For purposes
14of this Section, "records" means all data maintained by the
15taxpayer, including data on paper, microfilm, microfiche or any
16type of machine-sensible data compilation. For the purpose of
17administering and enforcing the provisions hereof, the
18Department, or any officer or employee of the Department
19designated, in writing, by the Director thereof, may hold
20investigations and hearings concerning any matters covered
21herein and not otherwise delegated to the Illinois Independent
22Tax Tribunal and may examine any relevant books, papers,
23records, documents or memoranda of any serviceman or any
24taxable purchaser for use hereunder, and may require the

 

 

SB3141- 4 -LRB100 20670 HLH 36122 b

1attendance of such person or any officer or employee of such
2person, or of any person having knowledge of the facts, and may
3take testimony and require proof for its information.
4    A taxpayer is prohibited from introducing into evidence in
5a proceeding before the Department, Tax Tribunal, or court any
6books or records that the taxpayer failed to produce to the
7Department for examination as required by this Section and the
8rules adopted by the Department unless the books and records
9are received by the Department no less than 5 business days
10prior to seeking introduction of the books and records in the
11proceeding.
12    Any person who fails to keep books and records or fails to
13produce books and records for examination as required by this
14Section and the rules adopted by the Department, including any
15officer or director of any corporation, any partner or member
16of any partnership, any manager or member of any limited
17liability company, or any other person responsible for filing
18returns, shall be liable to pay to the Department, for deposit
19into the Tax Compliance and Administration Fund, a penalty of
20$1,000 for the first failure to keep or produce such books and
21records and penalty of $3,000 for each subsequent failure to
22keep or produce such books and records. The Department may
23adopt rules to administer the penalties under this Section.
24(Source: P.A. 97-1129, eff. 8-28-12.)
 
25    Section 15. The Service Occupation Tax Act is amended by

 

 

SB3141- 5 -LRB100 20670 HLH 36122 b

1changing Section 11 as follows:
 
2    (35 ILCS 115/11)  (from Ch. 120, par. 439.111)
3    Sec. 11. Every supplier required or authorized to collect
4taxes hereunder and every serviceman making sales of service in
5this State on or after the effective date hereof shall keep
6such records, receipts, invoices and other pertinent books,
7documents, memoranda and papers as the Department shall
8require, in such form as the Department shall require. The
9Department may adopt rules that establish requirements,
10including record forms and formats, for records required to be
11kept and maintained by taxpayers. For purposes of this Section,
12"records" means all data maintained by the taxpayer, including
13data on paper, microfilm, microfiche or any type of
14machine-sensible data compilation. For the purpose of
15administering and enforcing the provisions hereof, the
16Department, or any officer or employee of the Department
17designated, in writing, by the Director thereof, may hold
18investigations and hearings not otherwise delegated to the
19Illinois Independent Tax Tribunal concerning any matters
20covered herein and may examine any books, papers, records,
21documents or memoranda of any supplier or serviceman bearing
22upon the sales of services or the sales of tangible personal
23property to servicemen, and may require the attendance of such
24person or any officer or employee of such person, or of any
25person having knowledge of the facts, and may take testimony

 

 

SB3141- 6 -LRB100 20670 HLH 36122 b

1and require proof for its information.
2    A taxpayer is prohibited from introducing into evidence in
3a proceeding before the Department, Tax Tribunal, or court any
4books or records that the taxpayer failed to produce to the
5Department for examination as required by this Section and the
6rules adopted by the Department unless the books and records
7are received by the Department no less than 5 business days
8prior to seeking introduction of the books and records in the
9proceeding.
10    Any person who fails to keep books and records or fails to
11produce books and records for examination as required by this
12Section and the rules adopted by the Department, including any
13officer or director of any corporation, any partner or member
14of any partnership, any manager or member of any limited
15liability company, or any other person responsible for filing
16returns, shall be liable to pay to the Department, for deposit
17into the Tax Compliance and Administration Fund, a penalty of
18$1,000 for the first failure to keep or produce such books and
19records and penalty of $3,000 for each subsequent failure to
20keep or produce such books and records. The Department may
21adopt rules to administer the penalties under this Section.
22(Source: P.A. 97-1129, eff. 8-28-12.)
 
23    Section 20. The Retailers' Occupation Tax Act is amended by
24changing Section 7 as follows:
 

 

 

SB3141- 7 -LRB100 20670 HLH 36122 b

1    (35 ILCS 120/7)  (from Ch. 120, par. 446)
2    Sec. 7. Every person engaged in the business of selling
3tangible personal property at retail in this State shall keep
4records and books of all sales of tangible personal property,
5together with invoices, bills of lading, sales records, copies
6of bills of sale, inventories prepared as of December 31 of
7each year or otherwise annually as has been the custom in the
8specific trade and other pertinent papers and documents. Every
9person who is engaged in the business of selling tangible
10personal property at retail in this State and who, in
11connection with such business, also engages in other activities
12(including, but not limited to, engaging in a service
13occupation) shall keep such additional records and books of all
14such activities as will accurately reflect the character and
15scope of such activities and the amount of receipts realized
16therefrom. The Department may adopt rules that establish
17requirements, including record forms and formats, for records
18required to be kept and maintained by taxpayers. For purposes
19of this Section, "records" means all data maintained by the
20taxpayer, including data on paper, microfilm, microfiche or any
21type of machine-sensible data compilation.
22    All books and records and other papers and documents which
23are required by this Act to be kept shall be kept in the
24English language and shall, at all times during business hours
25of the day, be subject to inspection by the Department or its
26duly authorized agents and employees.

 

 

SB3141- 8 -LRB100 20670 HLH 36122 b

1    To support deductions made on the tax return form, or
2authorized under this Act, on account of receipts from isolated
3or occasional sales of tangible personal property, on account
4of receipts from sales of tangible personal property for
5resale, on account of receipts from sales to governmental
6bodies or other exempted types of purchasers, on account of
7receipts from sales of tangible personal property in interstate
8commerce, and on account of receipts from any other kind of
9transaction that is not taxable under this Act, entries in any
10books, records or other pertinent papers or documents of the
11taxpayer in relation thereto shall be in detail sufficient to
12show the name and address of the taxpayer's customer in each
13such transaction, the character of every such transaction, the
14date of every such transaction, the amount of receipts realized
15from every such transaction and such other information as may
16be necessary to establish the non-taxable character of such
17transaction under this Act.
18    Except in the case of a sale to a purchaser who will always
19resell and deliver the property to his customers outside
20Illinois, anyone claiming that he has made a nontaxable sale
21for resale in some form as tangible personal property shall
22also keep a record of the purchaser's registration number or
23resale number with the Department.
24    It shall be presumed that all sales of tangible personal
25property are subject to tax under this Act until the contrary
26is established, and the burden of proving that a transaction is

 

 

SB3141- 9 -LRB100 20670 HLH 36122 b

1not taxable hereunder shall be upon the person who would be
2required to remit the tax to the Department if such transaction
3is taxable. In the course of any audit or investigation or
4hearing by the Department with reference to a given taxpayer,
5if the Department finds that the taxpayer lacks documentary
6evidence needed to support the taxpayer's claim to exemption
7from tax hereunder, the Department is authorized to notify the
8taxpayer in writing to produce such evidence, and the taxpayer
9shall have 60 days subject to the right in the Department to
10extend this period either on request for good cause shown or on
11its own motion from the date when such notice is sent to the
12taxpayer by certified or registered mail (or delivered to the
13taxpayer if the notice is served personally) in which to obtain
14and produce such evidence for the Department's inspection,
15failing which the matter shall be closed, and the transaction
16shall be conclusively presumed to be taxable hereunder.
17    Books and records and other papers reflecting gross
18receipts received during any period with respect to which the
19Department is authorized to issue notices of tax liability as
20provided by Sections 4 and 5 of this Act shall be preserved
21until the expiration of such period unless the Department, in
22writing, shall authorize their destruction or disposal prior to
23such expiration.
24    A taxpayer is prohibited from introducing into evidence in
25a proceeding before the Department, Tax Tribunal, or court any
26books or records that the taxpayer failed to produce to the

 

 

SB3141- 10 -LRB100 20670 HLH 36122 b

1Department for examination as required by this Section and the
2rules adopted by the Department unless the books and records
3are received by the Department no less than 5 business days
4prior to seeking introduction of the books and records in the
5proceeding.
6    Any person who fails to keep books and records or fails to
7produce books and records for examination as required by this
8Section and the rules adopted by the Department, including any
9officer or director of any corporation, any partner or member
10of any partnership, any manager or member of any limited
11liability company, or any other person responsible for filing
12returns, shall be liable to pay to the Department, for deposit
13into the Tax Compliance and Administration Fund, a penalty of
14$1,000 for the first failure to keep or produce such books and
15records and penalty of $3,000 for each subsequent failure to
16keep or produce such books and records. The Department may
17adopt rules to administer the penalties under this Section.
18(Source: P.A. 88-480.)
 
19    Section 25. The Cigarette Tax Act is amended by changing
20Sections 12, 13, 14, 15, 18b, and 18c and by adding Sections
2113a, 15a, and 18d as follows:
 
22    (35 ILCS 130/12)  (from Ch. 120, par. 453.12)
23    Sec. 12. Every distributor or secondary distributor who is
24required to procure a license under this Act and who purchases

 

 

SB3141- 11 -LRB100 20670 HLH 36122 b

1cigarettes for shipment into Illinois from a point outside this
2State shall procure invoices in duplicate covering each such
3shipment, shall make the invoices available for inspection upon
4demand by a duly authorized employee of the Department, and
5shall, if the Department so requires, furnish one copy of each
6such invoice to the Department at the time of filing a return
7or a report required by this Act.
8(Source: P.A. 96-1027, eff. 7-12-10.)
 
9    (35 ILCS 130/13)  (from Ch. 120, par. 453.13)
10    Sec. 13. Whenever any original package of cigarettes is
11found in the place of business or in the possession of any
12person who is not a licensed distributor under this Act without
13proper stamps affixed thereto, or an authorized substitute
14therefor imprinted thereon, underneath the sealed transparent
15wrapper of such original package, as required by this Act, the
16prima facie presumption shall arise that such original package
17of cigarettes is kept therein or is held by such person in
18violation of the provisions of this Act. If a presumption is
19raised, the Department may, in addition to the penalties
20imposed by Sections 18b and 18c of this Act and any other civil
21or criminal penalties provided for in this Act, assess tax
22penalty, and interest on the original packages of cigarettes.
23(Source: Laws 1953, p. 255.)
 
24    (35 ILCS 130/13a new)

 

 

SB3141- 12 -LRB100 20670 HLH 36122 b

1    Sec. 13a. Contraband cigarettes. Whenever a retailer
2obtains original packages of cigarettes from an in-state or
3out-of-state distributor or person that is not licensed as a
4distributor under this Act or the Cigarette Use Tax Act, a
5prima facie presumption shall arise that such original packages
6of cigarettes are contraband and are possessed by such retailer
7or were possessed by such retailer in violation of the
8provisions of this Act and subject to the penalties imposed by
9Sections 18b and 18c of this Act. Invoices or other documents
10kept in the normal course of business in the possession of a
11retailer reflecting purchases of original packages of
12cigarettes from an unlicensed in-state or out-of-state
13distributor or person or invoices or other documents kept in
14the normal course of business obtained by the Department from
15an in-state or out-of-state distributor or person, are
16sufficient to raise the presumption that such original packages
17of cigarettes are contraband and are possessed, or were
18possessed, by such retailer in violation of the provisions of
19this Act and the retailer is subject to the penalties imposed
20by Sections 18b and 18c. If a presumption is raised, the
21Department may, in addition to the penalties imposed by
22Sections 18b and 18c and any other civil or criminal penalties
23provided for in this Act, assess tax penalty, and interest on
24the original packages of cigarettes.
 
25    (35 ILCS 130/14)  (from Ch. 120, par. 453.14)

 

 

SB3141- 13 -LRB100 20670 HLH 36122 b

1    Sec. 14. Any person required by this Act to keep records of
2any kind whatsoever, who shall fail to keep the records so
3required or who shall falsify such records, shall be guilty of
4a Class 4 felony. If a person fails to produce the records for
5inspection by the Department upon request, a prima facie
6presumption shall arise that the person has failed to keep the
7records so required. A person who is unable to rebut this
8presumption is in violation of this Act and is subject to the
9penalties provided in this Section.
10(Source: P.A. 83-1428.)
 
11    (35 ILCS 130/15)  (from Ch. 120, par. 453.15)
12    Sec. 15. Any person who shall fail to safely maintain and
13preserve the records required by Sections Section 11, and
14Section 11a, 11b, and 11c of this Act for the period of 3 three
15years, as required therein, in such manner as to insure
16permanency and accessibility for inspection by the Department,
17shall be guilty of a business offense and may be fined up to
18$5,000. If a person fails to produce the records for inspection
19by the Department upon request, a prima facie presumption shall
20arise that the person has failed to preserve the records so
21required. A person who is unable to rebut this presumption is
22in violation of this Act and is subject to the penalties
23provided in this Section.
24(Source: P.A. 96-1027, eff. 7-12-10.)
 

 

 

SB3141- 14 -LRB100 20670 HLH 36122 b

1    (35 ILCS 130/15a new)
2    Sec. 15a. Failure to keep and produce books and records.
3Any person who or any officer or director of any corporation,
4partner, or member of any partnership, manager or member of a
5limited liability company, or person responsible for filing
6returns that fails to keep books and records or fails to
7produce books and records for inspection, as required by
8Sections 11, 11a, 11b, and 11c of this Act, shall be liable to
9pay to the Department, for deposit in the Tax Compliance and
10Administration Fund, a penalty of $1,000 for the first failure
11to keep books and records or failure to produce books and
12records for inspection, as required by Sections 11, 11a, 11b,
13and 11c, and $3000 for each subsequent failure to keep books
14and records or failure to produce books and records for
15inspection, as required by Sections 11, 11a, 11b, and 11c. The
16Department may adopt rules to administer the penalties under
17this Section.
18    A taxpayer shall be prohibited from introducing into
19evidence in a proceeding before the Department, Tax Tribunal,
20or a court any books and records that the taxpayer failed to
21produce to the Department for inspection as required by
22Sections 11, 11a, 11b, and 11c unless the books and records are
23received by the Department no less than 5 business days prior
24to seeking introduction of the books and records into the
25record of the proceeding.
 

 

 

SB3141- 15 -LRB100 20670 HLH 36122 b

1    (35 ILCS 130/18b)  (from Ch. 120, par. 453.18b)
2    Sec. 18b. Possession of more than 100 original packages of
3contraband cigarettes; penalty. With the exception of licensed
4distributors and transporters, as defined in Section 9c of this
5Act, possessing unstamped original packages of cigarettes, and
6licensed distributors possessing original packages of
7cigarettes that bear a tax stamp of another state or taxing
8jurisdiction, anyone possessing or having possessed contraband
9cigarettes contained in original packages is liable to pay, to
10the Department for deposit in the Tax Compliance and
11Administration Fund, a penalty of $25 for each such package of
12cigarettes in excess of 100 packages, unless reasonable cause
13can be established by the person upon whom the penalty is
14imposed. This penalty is in addition to the taxes imposed by
15this Act. Reasonable cause shall be determined in each
16situation in accordance with rules adopted by the Department.
17The provisions of the Uniform Penalty and Interest Act do not
18apply to this Section.
19(Source: P.A. 96-782, eff. 1-1-10.)
 
20    (35 ILCS 130/18c)
21    Sec. 18c. Possession of not less than 10 and not more than
22100 original packages of contraband cigarettes; penalty. With
23the exception of licensed distributors and transporters, as
24defined in Section 9c of this Act, possessing unstamped
25original packages of cigarettes, and licensed distributors

 

 

SB3141- 16 -LRB100 20670 HLH 36122 b

1possessing original packages of cigarettes that bear a tax
2stamp of another state or taxing jurisdiction, anyone
3possessing or having possessed not less than 10 and not more
4than 100 packages of contraband cigarettes contained in
5original packages is liable to pay to the Department, for
6deposit into the Tax Compliance and Administration Fund, a
7penalty of $15 $10 for each such package of cigarettes, unless
8reasonable cause can be established by the person upon whom the
9penalty is imposed. Reasonable cause shall be determined in
10each situation in accordance with rules adopted by the
11Department. The provisions of the Uniform Penalty and Interest
12Act do not apply to this Section.
13(Source: P.A. 96-782, eff. 1-1-10.)
 
14    (35 ILCS 130/18d new)
15    Sec. 18d. Cigarette package sizes; sale of individual or
16loose cigarettes prohibited. Cigarettes may only be sold in
17packages of 20 or 25 cigarettes. The sale of individual or
18loose cigarettes is prohibited. Any person who violates this
19Section of the Act shall be liable to pay to the Department,
20for deposit in the Tax Compliance and Administration Fund, a
21penalty of $1,000 for the first violation and $3,000 for any
22subsequent violation. Any person who violates this Section
23shall be guilty of a Class 4 felony. The Department may adopt
24rules to administer the penalties under this Section.
 

 

 

SB3141- 17 -LRB100 20670 HLH 36122 b

1    Section 30. The Cigarette Use Tax Act is amended by
2changing Sections 12, 22, 23, 25a, and 25b and by adding
3Sections 8a, 23a, and 25c as follows:
 
4    (35 ILCS 135/8a new)
5    Sec. 8a. Contraband cigarettes. Whenever any person
6obtains original packages of cigarettes from an in-state or
7out-of-state distributor or person that is not licensed as a
8distributor under this Act or the Cigarette Tax Act, a prima
9facie presumption shall arise that such original packages of
10cigarettes are contraband and are possessed or were possessed
11by such person in violation of the provisions of this Act and
12subject to the penalties imposed by Sections 25a and 25b.
13Invoices or other documents kept in the normal course of
14business in the possession of a person reflecting purchases of
15original packages of cigarettes from an unlicensed in-state or
16out-of-state distributor or person or invoices or other
17documents kept in the normal course of business obtained by the
18Department from an in-state or out-of-state distributor or
19person, are sufficient to raise the presumption that such
20original packages of cigarettes are contraband and are
21possessed, or were possessed, by such person in violation of
22the provisions of this Act and the person is subject to the
23penalties imposed by Sections 25a and 25b. If a presumption is
24raised, the Department may, in addition to the penalties
25imposed by Sections 25a and 25b and any other civil or criminal

 

 

SB3141- 18 -LRB100 20670 HLH 36122 b

1penalties provided for in this Act, assess tax penalty and
2interest on the original packages of cigarettes.
 
3    (35 ILCS 135/12)  (from Ch. 120, par. 453.42)
4    Sec. 12. Declaration of possession of cigarettes on which
5tax not paid.
6    (a) When cigarettes are acquired for use in this State by a
7person (including a distributor as well as any other person),
8who did not pay the tax herein imposed to a distributor, the
9person, within 30 days after acquiring the cigarettes, shall
10file with the Department a return declaring the possession of
11the cigarettes and shall transmit with the return to the
12Department the tax imposed by this Act.
13    (b) On receipt of the return and payment of the tax as
14required by paragraph (a), the Department may furnish the
15person with a suitable tax stamp to be affixed to the package
16of cigarettes upon which the tax has been paid if the
17Department determines that the cigarettes still exist.
18    (c) The return referred to in paragraph (a) shall contain
19the name and address of the person possessing the cigarettes
20involved, the location of the cigarettes and the quantity,
21brand name, place, and date of the acquisition of the
22cigarettes.
23    (d) Nothing in this Section shall permit a secondary
24distributor to purchase unstamped original packages of
25cigarettes or to purchase original packages of cigarettes from

 

 

SB3141- 19 -LRB100 20670 HLH 36122 b

1a person other than a licensed distributor.
2    (e) Any distributor who violates this Section shall be
3liable to pay to the Department, for deposit in the Tax
4Compliance and Administration Fund, a penalty of $1,000 for the
5first violation and $3,000 for any subsequent violation. The
6Department may adopt rules to administer the penalties under
7this Section. The Department may, in addition to the penalties
8imposed by this Section, and any other civil or criminal
9penalties provided for in this Act, assess tax, penalty, and
10interest on the original packages of cigarettes.
11(Source: P.A. 96-1027, eff. 7-12-10.)
 
12    (35 ILCS 135/22)  (from Ch. 120, par. 453.52)
13    Sec. 22.
14    Any person required by this Act to maintain or keep records
15of any kind whatsoever, who shall fail to keep the records so
16required or who shall falsify such records, shall be guilty of
17a Class 4 Felony A misdemeanor. If a person fails to produce
18the records for inspection by the Department upon request, a
19prima facie presumption shall arise that the person has failed
20to keep the records so required. A person who is unable to
21rebut this presumption is in violation of this Act and is
22subject to the penalties provided in this Section.
23    This Section shall not apply if the violation in a
24particular case also constitutes a criminal violation of the
25Cigarette Tax Act.

 

 

SB3141- 20 -LRB100 20670 HLH 36122 b

1(Source: P.A. 77-2229.)
 
2    (35 ILCS 135/23)  (from Ch. 120, par. 453.53)
3    Sec. 23. Any person who shall fail to safely preserve the
4records required by Section 15 and Section 15a of this Act for
5the period of three (3) years, as required therein, in such
6manner as to insure permanency and accessibility for inspection
7by the Department, shall be guilty of a business offense and
8may be fined up to $5,000 One Thousand Dollars ($1000). If a
9person fails to produce the records for inspection by the
10Department upon request, a prima facie presumption shall arise
11that the person has failed to keep the records so required. A
12person who is unable to rebut this presumption is in violation
13of this Act and is subject to the penalties provided in this
14Section.
15    This Section shall not apply if the violation in a
16particular case also constitutes a criminal violation of the
17Cigarette Tax Act.
18(Source: P.A. 96-1027, eff. 7-12-10.)
 
19    (35 ILCS 135/23a new)
20    Sec. 23a. Failure to keep and produce books and records.
21Any person who or any officer or director of any corporation,
22partner, or member of any partnership, manager or member of a
23limited liability company, or person responsible for filing
24returns that fails to keep books and records or fails to

 

 

SB3141- 21 -LRB100 20670 HLH 36122 b

1produce books and records for inspection, as required by
2Sections 15 and 15a of this Act, shall be liable to pay to the
3Department, for deposit in the Tax Compliance and
4Administration Fund, a penalty of $1,000 for the first failure
5to keep books and records or failure to produce books and
6records for inspection, as required by Sections 15 and 15a, and
7$3,000 for each subsequent failure to keep books and records or
8failure to produce books and records for inspection, as
9required by Sections 15 and 15a. The Department may adopt rules
10to administer the penalties under this Section.
11    A taxpayer shall be prohibited from introducing into
12evidence in a proceeding before the Department, Tax Tribunal,
13or a court any books and records that the taxpayer failed to
14produce to the Department for inspection as required by
15Sections 15 and 15a unless the books and records are received
16by the Department no less than 5 business days prior to seeking
17introduction of the books and records into the record of the
18proceeding.
 
19    (35 ILCS 135/25a)  (from Ch. 120, par. 453.55a)
20    Sec. 25a. Possession of more than 100 original packages of
21contraband cigarettes; penalty. With the exception of licensed
22distributors or transporters, as defined in Section 9c of the
23Cigarette Tax Act, possessing unstamped original packages of
24cigarettes, and licensed distributors possessing original
25packages of cigarettes that bear a tax stamp of another state

 

 

SB3141- 22 -LRB100 20670 HLH 36122 b

1or taxing jurisdiction, anyone possessing or having possessed
2more than 100 packages of contraband cigarettes contained in
3original packages is liable to pay, to the Department for
4deposit into the Tax Compliance and Administration Fund, a
5penalty of $25 for each such package of cigarettes in excess of
6100 packages, unless reasonable cause can be established by the
7person upon whom the penalty is imposed. Reasonable cause shall
8be determined in each situation in accordance with rules
9adopted by the Department. The provisions of the Uniform
10Penalty and Interest Act do not apply to this Section.
11(Source: P.A. 96-782, eff. 1-1-10.)
 
12    (35 ILCS 135/25b)
13    Sec. 25b. Possession of not less than 10 and not more than
14100 original packages not tax stamped or improperly tax
15stamped; penalty. With the exception of licensed distributors
16and transporters, as defined in Section 9c of the Cigarette Tax
17Act, possessing unstamped packages of cigarettes, and licensed
18distributors possessing original packages of cigarettes that
19bear a tax stamp of another state or taxing jurisdiction,
20anyone possessing or having possessed not less than 10 and not
21more than 100 packages of contraband cigarettes contained in
22original packages is liable to pay to the Department, for
23deposit into the Tax Compliance and Administration Fund, a
24penalty of $20 for each such package of cigarettes, unless
25reasonable cause can be established by the person upon whom the

 

 

SB3141- 23 -LRB100 20670 HLH 36122 b

1penalty is imposed. Reasonable cause shall be determined in
2each situation in accordance with rules adopted by the
3Department. Any person who purchases and possesses a total of 9
4or fewer original packages of unstamped cigarettes per month is
5exempt from the penalties of this Section. The provisions of
6the Uniform Penalty and Interest Act do not apply to this
7Section.
8(Source: P.A. 96-782, eff. 1-1-10.)
 
9    (35 ILCS 135/25c new)
10    Sec. 25c. Cigarette package sizes; sale of individual or
11loose cigarettes prohibited. Cigarettes may only be sold in
12packages of 20 or 25 cigarettes. The sale of individual or
13loose cigarettes is prohibited. Any person who violates this
14Section shall be liable to pay to the Department, for deposit
15in the Tax Compliance and Administration Fund, a penalty of
16$1,000 for the first violation and $3,000 for any subsequent
17violation. Any person who violates this Section shall be guilty
18of a Class 4 felony. This Section shall not apply if the
19violation in a particular case also constitutes a violation of
20the Cigarette Tax Act.
 
21    Section 35. The Tobacco Products Tax Act of 1995 is amended
22by changing Sections 10-25, 10-35, 10-37, 10-40, and 10-50 and
23by adding Sections 10-35a and 10-38 as follows:
 

 

 

SB3141- 24 -LRB100 20670 HLH 36122 b

1    (35 ILCS 143/10-25)
2    Sec. 10-25. License actions.
3    (a) The Department may, after notice and a hearing, revoke,
4cancel, or suspend the license of any distributor or retailer
5who violates any of the provisions of this Act, fails to keep
6books and records as required under this Act, fails to make
7books and records available for inspection upon demand by a
8duly authorized employee of the Department, or violates a rule
9or regulation of the Department for the administration and
10enforcement of this Act. The notice shall specify the alleged
11violation or violations upon which the revocation,
12cancellation, or suspension proceeding is based.
13    (b) The Department may revoke, cancel, or suspend the
14license of any distributor for a violation of the Tobacco
15Product Manufacturers' Escrow Enforcement Act as provided in
16Section 20 of that Act.
17    (c) If the retailer has a training program that facilitates
18compliance with minimum-age tobacco laws, the Department shall
19suspend for 3 days the license of that retailer for a fourth or
20subsequent violation of the Prevention of Tobacco Use by Minors
21and Sale and Distribution of Tobacco Products Act, as provided
22in subsection (a) of Section 2 of that Act. For the purposes of
23this Section, any violation of subsection (a) of Section 2 of
24the Prevention of Tobacco Use by Minors and Sale and
25Distribution of Tobacco Products Act occurring at the
26retailer's licensed location, during a 24-month period, shall

 

 

SB3141- 25 -LRB100 20670 HLH 36122 b

1be counted as a violation against the retailer.
2    If the retailer does not have a training program that
3facilitates compliance with minimum-age tobacco laws, the
4Department shall suspend for 3 days the license of that
5retailer for a second violation of the Prevention of Tobacco
6Use by Minors and Sale and Distribution of Tobacco Products
7Act, as provided in subsection (a-5) of Section 2 of that Act.
8    If the retailer does not have a training program that
9facilitates compliance with minimum-age tobacco laws, the
10Department shall suspend for 7 days the license of that
11retailer for a third violation of the Prevention of Tobacco Use
12by Minors and Sale and Distribution of Tobacco Products Act, as
13provided in subsection (a-5) of Section 2 of that Act.
14    If the retailer does not have a training program that
15facilitates compliance with minimum-age tobacco laws, the
16Department shall suspend for 30 days the license of a retailer
17for a fourth or subsequent violation of the Prevention of
18Tobacco Use by Minors and Sale and Distribution of Tobacco
19Products Act, as provided in subsection (a-5) of Section 2 of
20that Act.
21    A training program that facilitates compliance with
22minimum-age tobacco laws must include at least the following
23elements: (i) it must explain that only individuals displaying
24valid identification demonstrating that they are 18 years of
25age or older shall be eligible to purchase cigarettes or
26tobacco products and (ii) it must explain where a clerk can

 

 

SB3141- 26 -LRB100 20670 HLH 36122 b

1check identification for a date of birth. The training may be
2conducted electronically. Each retailer that has a training
3program shall require each employee who completes the training
4program to sign a form attesting that the employee has received
5and completed tobacco training. The form shall be kept in the
6employee's file and may be used to provide proof of training.
7    (d) The Department may, by application to any circuit
8court, obtain an injunction restraining any person who engages
9in business as a distributor of tobacco products without a
10license (either because his or her license has been revoked,
11canceled, or suspended or because of a failure to obtain a
12license in the first instance) from engaging in that business
13until that person, as if that person were a new applicant for a
14license, complies with all of the conditions, restrictions, and
15requirements of Section 10-20 of this Act and qualifies for and
16obtains a license. Refusal or neglect to obey the order of the
17court may result in punishment for contempt.
18(Source: P.A. 98-1055, eff. 1-1-16; 99-192, eff. 1-1-16.)
 
19    (35 ILCS 143/10-35)
20    Sec. 10-35. Record keeping.
21    (a) Every distributor, as defined in Section 10-5, shall
22keep complete and accurate records of tobacco products held,
23purchased, manufactured, brought in or caused to be brought in
24from without the State, and tobacco products sold, or otherwise
25disposed of, and shall preserve and keep all invoices, bills of

 

 

SB3141- 27 -LRB100 20670 HLH 36122 b

1lading, sales records, and copies of bills of sale, the
2wholesale price for tobacco products sold or otherwise disposed
3of, an inventory of tobacco products prepared as of December 31
4of each year or as of the last day of the distributor's fiscal
5year if he or she files federal income tax returns on the basis
6of a fiscal year, and other pertinent papers and documents
7relating to the manufacture, purchase, sale, or disposition of
8tobacco products. Every sales invoice issued by a licensed
9distributor to a retailer in this State shall contain the
10distributor's Tobacco Products License number unless the
11distributor has been granted a waiver by the Department in
12response to a written request in cases where (i) the
13distributor sells little cigars or other tobacco products only
14to licensed retailers that are wholly-owned by the distributor
15or owned by a wholly-owned subsidiary of the distributor; (ii)
16the licensed retailer obtains little cigars or other tobacco
17products only from the distributor requesting the waiver; and
18(iii) the distributor affixes the tax stamps to the original
19packages of little cigars or has or will pay the tax on the
20other tobacco products sold to the licensed retailer. The
21distributor shall file a written request with the Department,
22and, if the Department determines that the distributor meets
23the conditions for a waiver, the Department shall grant the
24waiver.
25    (b) Every retailer, as defined in Section 10-5, whether or
26not the retailer has obtained a retailer's license pursuant to

 

 

SB3141- 28 -LRB100 20670 HLH 36122 b

1Section 4g, shall keep complete and accurate records of tobacco
2products held, purchased, sold, or otherwise disposed of, and
3shall preserve and keep all invoices, bills of lading, sales
4records, and copies of bills of sale, returns and other
5pertinent papers and documents relating to the purchase, sale,
6or disposition of tobacco products. Such records need not be
7maintained on the licensed premises, but must be maintained in
8the State of Illinois; however, if access is available
9electronically, the records may be maintained out of state.
10However, all original invoices or copies thereof covering
11purchases of tobacco products must be retained on the licensed
12premises for a period of 90 days after such purchase, unless
13the Department has granted a waiver in response to a written
14request in cases where records are kept at a central business
15location within the State of Illinois or in cases where records
16that are available electronically are maintained out of state.
17The Department shall adopt rules regarding the eligibility for
18a waiver, revocation of a waiver, and requirements and
19standards for maintenance and accessibility of records located
20at a central location out-of-State pursuant to a waiver
21provided under this Section.
22    (c) Books, records, papers, and documents that are required
23by this Act to be kept shall, at all times during the usual
24business hours of the day, be subject to inspection by the
25Department or its duly authorized agents and employees. The
26books, records, papers, and documents for any period with

 

 

SB3141- 29 -LRB100 20670 HLH 36122 b

1respect to which the Department is authorized to issue a notice
2of tax liability shall be preserved until the expiration of
3that period.
4(Source: P.A. 98-1055, eff. 1-1-16; 99-192, eff. 1-1-16.)
 
5    (35 ILCS 143/10-35a new)
6    Sec. 10-35a. Failure to keep and produce books and
7records.Any person who or any officer or director of any
8corporation, partner, or member of any partnership, manager or
9member of a limited liability company, or person responsible
10for filing returns that fails to keep books and records or
11fails to produce books and records for inspection, as required
12by Section 10-35, shall be liable to pay to the Department, for
13deposit in the Tax Compliance and Administration Fund, a
14penalty of $1,000 for the first failure to keep books and
15records or failure to produce books and records for inspection,
16as required by Section 10-35, and $3,000 for each subsequent
17failure to keep books and records or failure to produce books
18and records for inspection, as required by Section 10-35. The
19Department may adopt rules to administer the penalties under
20this Section.
21    A taxpayer shall be prohibited from introducing into
22evidence in a proceeding before the Department, Tax Tribunal,
23or a court any books and records that the taxpayer failed to
24produce to the Department for inspection as required by Section
2510-35 unless the books and records are received by the

 

 

SB3141- 30 -LRB100 20670 HLH 36122 b

1Department no less than 5 business days prior to seeking
2introduction of the books and records into the record of the
3proceeding.
 
4    (35 ILCS 143/10-37)
5    Sec. 10-37. Proof of payment of tax imposed by this Act.
6Every licensed distributor of tobacco products in this State is
7required to show proof of the tax having been paid as required
8by this Act by displaying its Tobacco Products License number
9on every sales invoice issued to a retailer in this State. No
10retailer shall possess tobacco products without either a proper
11invoice indicating that the tobacco products tax was paid by a
12distributor for the tobacco products in the retailer's
13possession or other proof that the tax was paid by the retailer
14if it has purchased tobacco products on which tax has not been
15paid as required by this Act. Failure to comply with the
16provisions of this paragraph may be grounds for revocation of a
17distributor's or retailer's license in accordance with Section
1810-25 of this Act or Section 6 of the Cigarette Tax Act. In
19addition, the Department may impose a civil penalty not to
20exceed $1,000 for the first violation and $3,000 for each
21subsequent violation, which shall be deposited into the Tax
22Compliance and Administration Fund.
23(Source: P.A. 98-1055, eff. 1-1-16.)
 
24    (35 ILCS 143/10-38 new)

 

 

SB3141- 31 -LRB100 20670 HLH 36122 b

1    Sec. 10-38. Presumption for out-of-state or unlicensed
2distributors. Whenever any person obtains tobacco products
3from an in-state or out-of-state distributor or person that is
4not licensed as a distributor under this Act, a prima facie
5presumption shall arise that the tax imposed by this Act on
6such tobacco products has not been paid in violation of this
7Act. Invoices or other documents kept in the normal course of
8business in the possession of a person reflecting purchases of
9tobacco products from an unlicensed in-state or out-of-state
10distributor or person or invoices or other documents kept in
11the normal course of business obtained by the Department from
12in-state or out-of-state distributors or persons, are
13sufficient to raise the presumption that the tax imposed by
14this Act has not been paid. If a presumption is raised, the
15Department may assess tax penalty and interest on the tobacco
16products. In addition, any person who violates this Section
17shall be liable to pay to the Department, for deposit in the
18Tax Compliance and Administration Fund, a penalty of $1,000 for
19the first violation and $3,000 for any subsequent violation.
20The Department may adopt rules to administer the penalties
21under this Section.
 
22    (35 ILCS 143/10-40)
23    Sec. 10-40. Invoices. Every distributor or other person who
24purchases tobacco products for resale for shipment into
25Illinois from a point outside Illinois shall procure invoices

 

 

SB3141- 32 -LRB100 20670 HLH 36122 b

1in duplicate covering each shipment and shall make the invoices
2available for inspection upon demand by a duly authorized
3employee of the Department, and shall, if the Department so
4requires, furnish one copy of each invoice to the Department at
5the time of filing the return required by this Act.
6(Source: P.A. 89-21, eff. 6-6-95.)
 
7    (35 ILCS 143/10-50)
8    Sec. 10-50. Violations and penalties. When the amount due
9is under $300, any distributor who fails to file a return,
10willfully fails or refuses to make any payment to the
11Department of the tax imposed by this Act, or files a
12fraudulent return, or any officer or agent of a corporation
13engaged in the business of distributing tobacco products to
14retailers and consumers located in this State who signs a
15fraudulent return filed on behalf of the corporation, or any
16accountant or other agent who knowingly enters false
17information on the return of any taxpayer under this Act is
18guilty of a Class 4 felony.
19    Any person who violates any provision of Section 10-20,
2010-21, or 10-22 of this Act, fails to keep books and records as
21required under this Act, or willfully violates a rule or
22regulation of the Department for the administration and
23enforcement of this Act is guilty of a Class 4 felony. A person
24commits a separate offense on each day that he or she engages
25in business in violation of Section 10-20, 10-21, or 10-22 of

 

 

SB3141- 33 -LRB100 20670 HLH 36122 b

1this Act. If a person fails to produce the books and records
2for inspection by the Department upon request, a prima facie
3presumption shall arise that the person has failed to keep
4books and records as required under this Act. A person who is
5unable to rebut this presumption is in violation of this Act
6and is subject to the penalties provided in this Section.
7    When the amount due is under $300, any person who accepts
8money that is due to the Department under this Act from a
9taxpayer for the purpose of acting as the taxpayer's agent to
10make the payment to the Department, but who fails to remit the
11payment to the Department when due, is guilty of a Class 4
12felony.
13    Any person who violates any provision of Sections 10-20,
1410-21 and 10-22 of this Act, fails to keep books and records as
15required under this Act, or willfully violates a rule or
16regulation of the Department for the administration and
17enforcement of this Act is guilty of a business offense and may
18be fined up to $5,000. If a person fails to produce books and
19records for inspection by the Department upon request, a prima
20facie presumption shall arise that the person has failed to
21keep books and records as required under this Act. A person who
22is unable to rebut this presumption is in violation of this Act
23and is subject to the penalties provided in this Section. A
24person commits a separate offense on each day that he or she
25engages in business in violation of Sections 10-20, 10-21 and
2610-22 of this Act.

 

 

SB3141- 34 -LRB100 20670 HLH 36122 b

1    When the amount due is $300 or more, any distributor who
2files, or causes to be filed, a fraudulent return, or any
3officer or agent of a corporation engaged in the business of
4distributing tobacco products to retailers and consumers
5located in this State who files or causes to be filed or signs
6or causes to be signed a fraudulent return filed on behalf of
7the corporation, or any accountant or other agent who knowingly
8enters false information on the return of any taxpayer under
9this Act is guilty of a Class 3 felony.
10    When the amount due is $300 or more, any person engaged in
11the business of distributing tobacco products to retailers and
12consumers located in this State who fails to file a return,
13willfully fails or refuses to make any payment to the
14Department of the tax imposed by this Act, or accepts money
15that is due to the Department under this Act from a taxpayer
16for the purpose of acting as the taxpayer's agent to make
17payment to the Department but fails to remit such payment to
18the Department when due is guilty of a Class 3 felony.
19    When the amount due is under $300, any retailer who fails
20to file a return, willfully fails or refuses to make any
21payment to the Department of the tax imposed by this Act, or
22files a fraudulent return, or any officer or agent of a
23corporation engaged in the retail business of selling tobacco
24products to purchasers of tobacco products for use and
25consumption located in this State who signs a fraudulent return
26filed on behalf of the corporation, or any accountant or other

 

 

SB3141- 35 -LRB100 20670 HLH 36122 b

1agent who knowingly enters false information on the return of
2any taxpayer under this Act is guilty of a Class A misdemeanor
3for a first offense and a Class 4 felony for each subsequent
4offense.
5    When the amount due is $300 or more, any retailer who fails
6to file a return, willfully fails or refuses to make any
7payment to the Department of the tax imposed by this Act, or
8files a fraudulent return, or any officer or agent of a
9corporation engaged in the retail business of selling tobacco
10products to purchasers of tobacco products for use and
11consumption located in this State who signs a fraudulent return
12filed on behalf of the corporation, or any accountant or other
13agent who knowingly enters false information on the return of
14any taxpayer under this Act is guilty of a Class 4 felony.
15    Any person whose principal place of business is in this
16State and who is charged with a violation under this Section
17shall be tried in the county where his or her principal place
18of business is located unless he or she asserts a right to be
19tried in another venue. If the taxpayer does not have his or
20her principal place of business in this State, however, the
21hearing must be held in Sangamon County unless the taxpayer
22asserts a right to be tried in another venue.
23    Any taxpayer or agent of a taxpayer who with the intent to
24defraud purports to make a payment due to the Department by
25issuing or delivering a check or other order upon a real or
26fictitious depository for the payment of money, knowing that it

 

 

SB3141- 36 -LRB100 20670 HLH 36122 b

1will not be paid by the depository, is guilty of a deceptive
2practice in violation of Section 17-1 of the Criminal Code of
32012.
4    A prosecution for a violation described in this Section may
5be commenced within 3 years after the commission of the act
6constituting the violation.
7(Source: P.A. 100-201, eff. 8-18-17.)
 
8    (35 ILCS 143/10-36 rep.)
9    Section 40. The Tobacco Products Tax Act of 1995 is amended
10by repealing Section 10-36.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.

 

 

SB3141- 37 -LRB100 20670 HLH 36122 b

1 INDEX
2 Statutes amended in order of appearance
3    35 ILCS 105/11from Ch. 120, par. 439.11
4    35 ILCS 110/11from Ch. 120, par. 439.41
5    35 ILCS 115/11from Ch. 120, par. 439.111
6    35 ILCS 120/7from Ch. 120, par. 446
7    35 ILCS 130/12from Ch. 120, par. 453.12
8    35 ILCS 130/13from Ch. 120, par. 453.13
9    35 ILCS 130/13a new
10    35 ILCS 130/14from Ch. 120, par. 453.14
11    35 ILCS 130/15from Ch. 120, par. 453.15
12    35 ILCS 130/15a new
13    35 ILCS 130/18bfrom Ch. 120, par. 453.18b
14    35 ILCS 130/18c
15    35 ILCS 130/18d new
16    35 ILCS 135/8a new
17    35 ILCS 135/12from Ch. 120, par. 453.42
18    35 ILCS 135/22from Ch. 120, par. 453.52
19    35 ILCS 135/23from Ch. 120, par. 453.53
20    35 ILCS 135/23a new
21    35 ILCS 135/25afrom Ch. 120, par. 453.55a
22    35 ILCS 135/25b
23    35 ILCS 135/25c new
24    35 ILCS 143/10-25
25    35 ILCS 143/10-35

 

 

SB3141- 38 -LRB100 20670 HLH 36122 b

1    35 ILCS 143/10-35a new
2    35 ILCS 143/10-37
3    35 ILCS 143/10-38 new
4    35 ILCS 143/10-40
5    35 ILCS 143/10-50
6    35 ILCS 143/10-36 rep.