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093_HB3187
LRB093 06358 SJM 06477 b
1 AN ACT concerning taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Cigarette Tax Act is amended by changing
5 Sections 1, 2, 3, 4, 4a, 4b, 5, 6, 7, 9, 9a, 9c, 9d, 10b, 11,
6 13, 14, 15, 18, 18a, 18b, 18c, 20, 21, 22, 23, 24, and 25 and
7 adding Sections 0.01, 13a, 15a, 15b, 18d, 31, and 32 as
8 follows:
9 (35 ILCS 130/0.01 new)
10 Sec. 0.01. Short title. This Act may be cited as the
11 Cigarette Tax Act.
12 (35 ILCS 130/1) (from Ch. 120, par. 453.1)
13 Sec. 1. For the purposes of this Act:
14 "Cigarette", when used in this Act, shall be construed to
15 mean: Any roll for smoking made wholly or in part of tobacco
16 irrespective of size or shape and whether or not such tobacco
17 is flavored, adulterated or mixed with any other ingredient,
18 and the wrapper or cover of which is made of paper or any
19 other substance or material except tobacco.
20 "Person" means any natural individual, firm, partnership,
21 association, joint stock company, joint adventure, public or
22 private corporation, however formed, limited liability
23 company, or a receiver, executor, administrator, trustee,
24 guardian or other representative appointed by order of any
25 court.
26 "Prior Continuous Compliance DistributorTaxpayer" means
27 any distributorperson who is licensed under this Act and
28 who, having been a licensee for a continuous period of 5
29 years, is determined by the Department not to have been
30 either delinquent or deficient in the payment of tax
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1 liability during that period or otherwise in violation of
2 this Act. Also, any distributortaxpayer who has, as
3 verified by the Department, continuously complied with the
4 condition of his bond or other security under provisions of
5 this Act for a period of 5 consecutive years shall be
6 considered to be a "Prior continuous compliance distributor
7 taxpayer". In calculating the consecutive period of time
8 described herein for qualification as a "prior continuous
9 compliance distributortaxpayer", a consecutive period of
10 time of qualifying compliance immediately prior to the
11 effective date of this amendatory Act of 1987 shall be
12 credited to any licensee who became licensed on or before the
13 effective date of this amendatory Act of 1987.
14 "Department" means the Department of Revenue.
15 "Sale" means any transfer, exchange or barter in any
16 manner or by any means whatsoever for a consideration, and
17 includes and means all sales made by any person.
18 "Original Package" means the individual packet, box or
19 other container whatsoever used to contain and to convey
20 cigarettes to the consumer.
21 "Consumer" means any person who acquires cigarettes for
22 consumption or use in this State and not for resale.
23 "Distributor" means any person, whether located within or
24 outside of this State, other than a licensed retailer, who
25 sells or distributes cigarettes within or into this State.
26 "Distributor" does not include any cigarette manufacturer,
27 export warehouse proprietor, or importer with a valid permit
28 under 26 U.S.C. 5712 if that person sells or distributes
29 cigarettes in this State only to licensed distributors, or to
30 an export warehouse proprietor or another manufacturer with a
31 valid permit under 26 U.S.C. 5712.
32 "Importer" means any person who imports into the United
33 States, either directly or indirectly, a finished cigarette
34 for sale or distribution.
-3- LRB093 06358 SJM 06477 b
1 "Licensed", when used with reference to a manufacturer,
2 importer, or retailer, means only those persons who hold a
3 valid and current license issued under Section 4 for the type
4 of business being engaged in and, when used with reference to
5 a distributor, means only those persons who hold a valid and
6 current license issued under Section 4. When the term
7 "licensed" is used before a list of entities, such as
8 "licensed manufacturer, importer, wholesale dealer, or retail
9 dealer", that term shall be deemed to apply to each entity in
10 the list.
11 "Manufacturer" means any person who makes, manufactures,
12 or fabricates cigarettes.
13 "Stamp" or "stamps" means the indicia required to be
14 placed on a cigarette package that evidences payment of the
15 tax on cigarettes imposed under Section 2.
16 "Distributor" means any and each of the following:
17 (1) Any person engaged in the business of selling
18 cigarettes in this State who brings or causes to be brought
19 into this State from without this State any original packages
20 of cigarettes, on which original packages there is no
21 authorized evidence underneath a sealed transparent wrapper
22 showing that the tax liability imposed by this Act has been
23 paid or assumed by the out-of-State seller of such
24 cigarettes, for sale or other disposition in the course of
25 such business.
26 (2) Any person who makes, manufactures or fabricates
27 cigarettes in this State for sale in this State, except a
28 person who makes, manufactures or fabricates cigarettes as a
29 part of a correctional industries program for sale to
30 residents incarcerated in penal institutions or resident
31 patients of a State-operated mental health facility.
32 (3) Any person who makes, manufactures or fabricates
33 cigarettes outside this State, which cigarettes are placed in
34 original packages contained in sealed transparent wrappers,
-4- LRB093 06358 SJM 06477 b
1 for delivery or shipment into this State, and who elects to
2 qualify and is accepted by the Department as a distributor
3 under Section 4b of this Act.
4 "Place of business" shall mean and include any place
5 where cigarettes are sold or where cigarettes are
6 manufactured, stored or kept for the purpose of sale or
7 consumption, including any vessel, vehicle, airplane, train
8 or vending machine.
9 "Business" means any trade, occupation, activity or
10 enterprise engaged in for the purpose of selling cigarettes
11 in this State.
12 "Retailer" means any person, whether located within or
13 outside the State, who engages in the making of transfers of
14 the ownership of, or title to, cigarettes to a purchaser for
15 use or consumption and not for resale in any form, for a
16 valuable consideration, except a person who transfers to
17 residents incarcerated in penal institutions or resident
18 patients of a State-operated mental health facility ownership
19 of cigarettes made, manufactured, or fabricated as part of a
20 correctional industries program.
21 "Retailer" shall be construed to include any person who
22 engages in the making of transfers of the ownership of, or
23 title to, cigarettes to a purchaser, for use or consumption
24 by any other person to whom such purchaser may transfer the
25 cigarettes without a valuable consideration, except a person
26 who transfers to residents incarcerated in penal institutions
27 or resident patients of a State-operated mental health
28 facility ownership of cigarettes made, manufactured or
29 fabricated as part of a correctional industries program.
30 (Source: P.A. 88-480.)
31 (35 ILCS 130/2) (from Ch. 120, par. 453.2)
32 Sec. 2. Tax imposed; rate; collection, payment, and
33 distribution; discount.
-5- LRB093 06358 SJM 06477 b
1 (a) A tax is imposed upon the sale or consumptionany
2 person engaged in business as a retailer of cigarettes in
3 this State at the rate of 5 1/2 mills per cigarette sold, or
4 otherwise disposed of in the course of such business in this
5 State. In addition to any other tax imposed by this Act, a
6 tax is imposed upon the sale or consumptionany person
7 engaged in business as a retailer of cigarettes in this State
8 at a rate of 1/2 mill per cigarette sold or otherwise
9 disposed of in the course of such business in this State on
10 and after January 1, 1947, and shall be paid into the
11 Metropolitan Fair and Exposition Authority Reconstruction
12 Fund. On and after December 1, 1985, in addition to any other
13 tax imposed by this Act, a tax is imposed upon the sale or
14 consumptionany person engaged in business as a retailer of
15 cigarettes in this State at a rate of 4 mills per cigarette
16 sold or otherwise disposed of in the course of such business
17 in this State. Of the additional tax imposed by this
18 amendatory Act of 1985, $9,000,000 of the moneys received by
19 the Department of Revenue pursuant to this Act shall be paid
20 each month into the Common School Fund. On and after the
21 effective date of this amendatory Act of 1989, in addition to
22 any other tax imposed by this Act, a tax is imposed upon the
23 sale or consumptionany person engaged in business as a
24 retailer of cigarettes in this State at the rate of 5 mills
25 per cigarette sold or otherwise disposed of in the course of
26 such business in this State. On and after the effective date
27 of this amendatory Act of 1993, in addition to any other tax
28 imposed by this Act, a tax is imposed upon the sale or
29 consumptionany person engaged in business as a retailer of
30 cigarettes in this State at the rate of 7 mills per cigarette
31 sold or otherwise disposed of in the course of such business
32 in this State. On and after December 15, 1997, in addition to
33 any other tax imposed by this Act, a tax is imposed upon the
34 sale or consumptionany person engaged in business as a
-6- LRB093 06358 SJM 06477 b
1 retailer of cigarettes in this State at the rate of 7 mills
2 per cigarette sold or otherwise disposed of in the course of
3 such business of this State. All of the moneys received by
4 the Department of Revenue pursuant to this Act and the
5 Cigarette Use Tax Act from the additional taxes imposed by
6 this amendatory Act of 1997, shall be paid each month into
7 the Common School Fund. On and after July 1, 2002, in
8 addition to any other tax imposed by this Act, a tax is
9 imposed upon the sale or consumptionany person engaged in
10 business as a retailer of cigarettes in this State at the
11 rate of 20.0 mills per cigarette sold or otherwise disposed
12 of in the course of such business in this State. The payment
13 of such taxes shall be evidenced by a stamp affixed to each
14 original package of cigarettes, or an authorized substitute
15 for such stamp imprinted on each original package of such
16 cigarettes underneath the sealed transparent outside wrapper
17 of such original package, as hereinafter provided. However,
18 such taxes are not imposed upon any activity in such business
19 in interstate commerce or otherwise, which activity may not
20 under the Constitution and statutes of the United States be
21 made the subject of taxation by this State.
22 Beginning on the effective date of this amendatory Act of
23 the 92nd General Assembly, all of the moneys received by the
24 Department of Revenue pursuant to this Act and the Cigarette
25 Use Tax Act, other than the moneys that are dedicated to the
26 Metropolitan Fair and Exposition Authority Reconstruction
27 Fund and the Common School Fund, shall be distributed each
28 month as follows: first, there shall be paid into the General
29 Revenue Fund an amount which, when added to the amount paid
30 into the Common School Fund for that month, equals
31 $33,300,000; then, from the moneys remaining, if any amounts
32 required to be paid into the General Revenue Fund in previous
33 months remain unpaid, those amounts shall be paid into the
34 General Revenue Fund; then, beginning on April 1, 2003, from
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1 the moneys remaining, $5,000,000 per month shall be paid into
2 the School Infrastructure Fund; then, if any amounts required
3 to be paid into the School Infrastructure Fund in previous
4 months remain unpaid, those amounts shall be paid into the
5 School Infrastructure Fund; then the moneys remaining, if
6 any, shall be paid into the Long-Term Care Provider Fund. To
7 the extent that more than $25,000,000 has been paid into the
8 General Revenue Fund and Common School Fund per month for the
9 period of July 1, 1993 through the effective date of this
10 amendatory Act of 1994 from combined receipts of the
11 Cigarette Tax Act and the Cigarette Use Tax Act,
12 notwithstanding the distribution provided in this Section,
13 the Department of Revenue is hereby directed to adjust the
14 distribution provided in this Section to increase the next
15 monthly payments to the Long Term Care Provider Fund by the
16 amount paid to the General Revenue Fund and Common School
17 Fund in excess of $25,000,000 per month and to decrease the
18 next monthly payments to the General Revenue Fund and Common
19 School Fund by that same excess amount.
20 When any tax imposed herein terminates or has terminated,
21 distributors who have bought stamps while such tax was in
22 effect and who therefore paid such tax, but who can show, to
23 the Department's satisfaction, that they sold the cigarettes
24 to which they affixed such stamps after such tax had
25 terminated and did not recover the tax or its equivalent from
26 purchasers, shall be allowed by the Department to take credit
27 for such absorbed tax against subsequent tax stamp purchases
28 from the Department by such distributor.
29 The impact of the tax levied by this Act is imposed upon
30 the retailer and shall be prepaid or pre-collected by the
31 distributor for the purpose of convenience and facility only,
32 and the amount of the tax shall be added to the price of the
33 cigarettes sold by such distributor. Collection of the tax
34 shall be evidenced by a stamp or stamps affixed to each
-8- LRB093 06358 SJM 06477 b
1 original package of cigarettes, as hereinafter provided.
2 Each distributor shall collect the tax from the retailer
3 at or before the time of the sale, shall affix the stamps to
4 each package of cigarettes sold or distributed for
5 consumption within this State as hereinafter required, and
6 shall remit the tax collected from retailers to the
7 Department, as hereinafter provided. Any distributor who
8 fails to properly collect and pay the tax imposed by this Act
9 shall be liable for the tax. Any distributor having
10 cigarettes to which stamps have been affixed in his
11 possession for sale on the effective date of this amendatory
12 Act of 1989 shall not be required to pay the additional tax
13 imposed by this amendatory Act of 1989 on such stamped
14 cigarettes. Any distributor having cigarettes to which stamps
15 have been affixed in his or her possession for sale at 12:01
16 a.m. on the effective date of this amendatory Act of 1993, is
17 required to pay the additional tax imposed by this amendatory
18 Act of 1993 on such stamped cigarettes. This payment, less
19 the discount provided in subsection (b), shall be due when
20 the distributor first makes a purchase of cigarette tax
21 stamps after the effective date of this amendatory Act of
22 1993, or on the first due date of a return under this Act
23 after the effective date of this amendatory Act of 1993,
24 whichever occurs first. Any distributor having cigarettes to
25 which stamps have been affixed in his possession for sale on
26 December 15, 1997 shall not be required to pay the additional
27 tax imposed by this amendatory Act of 1997 on such stamped
28 cigarettes.
29 Any distributor having cigarettes to which stamps have
30 been affixed in his or her possession for sale on July 1,
31 2002 shall not be required to pay the additional tax imposed
32 by this amendatory Act of the 92nd General Assembly on those
33 stamped cigarettes.
34 The amount of the Cigarette Tax imposed by this Act shall
-9- LRB093 06358 SJM 06477 b
1 be separately stated, apart from the price of the goods, by
2 both distributors and retailers, in all advertisements, bills
3 and sales invoices.
4 (b) The distributor shall be required to collect the
5 taxes provided under paragraph (a) hereof, and, to cover the
6 costs of such collection, shall be allowed a discount during
7 any year commencing July 1st and ending the following June
8 30th in accordance with the schedule set out hereinbelow,
9 which discount shall be allowed at the time of purchase of
10 the stamps when purchase is required by this Act, or at the
11 time when the tax is remitted to the Department without the
12 purchase of stamps iffrom the Department authorizes the use
13 of tax meter impressions under Section 3when that method of
14 paying the tax is required or authorized by this Act. Prior
15 to December 1, 1985, a discount equal to 1 2/3% of the amount
16 of the tax up to and including the first $700,000 paid
17 hereunder by such distributor to the Department during any
18 such year; 1 1/3% of the next $700,000 of tax or any part
19 thereof, paid hereunder by such distributor to the Department
20 during any such year; 1% of the next $700,000 of tax, or any
21 part thereof, paid hereunder by such distributor to the
22 Department during any such year, and 2/3 of 1% of the amount
23 of any additional tax paid hereunder by such distributor to
24 the Department during any such year shall apply. On and after
25 December 1, 1985, a discount equal to 1.75% of the amount of
26 the tax payable under this Act up to and including the first
27 $3,000,000 paid hereunder by such distributor to the
28 Department during any such year and 1.5% of the amount of any
29 additional tax paid hereunder by such distributor to the
30 Department during any such year shall apply.
31 Two or more distributors that use a common means of
32 affixing revenue tax stamps or that are owned or controlled
33 by the same interests shall be treated as a single
34 distributor for the purpose of computing the discount.
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1 (c) The taxes herein imposed are in addition to all
2 other occupation or privilege taxes imposed by the State of
3 Illinois, or by any political subdivision thereof, or by any
4 municipal corporation.
5 (Source: P.A. 92-536, eff. 6-6-02.)
6 (35 ILCS 130/3) (from Ch. 120, par. 453.3)
7 Sec. 3. Affixing tax stamp; remitting tax to the
8 Department. Payment of the taxes imposed by Section 2 of
9 this Act shall (except as hereinafter provided) be evidenced
10 by revenue tax stamps affixed by a licensed distributor to
11 each original package of cigarettes. No stamp shall be
12 applied to any cigarette package and no tax under Section 2
13 shall be imposed on any cigarettes that are exempt from tax
14 under 26 U.S.C. 5701 and that are distributed in accordance
15 with federal regulations. Distributors may apply stamps only
16 to cigarette packages that they have received directly from a
17 licensed manufacturer or importer of cigarettes.
18 Each licensed distributor of cigarettes located within
19 this State shall apply stamps to all applicable cigarette
20 packages within 72 hours after receipt of those products.
21 Each distributor of cigarettes located outside this State
22 shall apply stamps to all applicable cigarette packages
23 before sending the packages into this State.
24 Distributors shall be permitted to set aside, without
25 application of stamps, only that part of the distributor's
26 stock that is identified for sale or distribution outside of
27 the borders of this State. If a distributor, as permitted
28 under this Section, maintains stocks of unstamped cigarette
29 packages, those unstamped packages shall be stored separately
30 from stamped product packages. No unstamped cigarette
31 packages shall be transferred by a distributor to another
32 facility of the distributor within this State or to another
33 person within this State. Any person who is doing business as
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1 both a distributor and a retailer shall maintain separate
2 areas for stamped and unstamped product. Except as provided
3 in Sections 3 and 9c, no person, other than a licensed
4 manufacturer or importer, or a licensed distributor that
5 receives unstamped cigarette packages directly from a
6 licensed cigarette manufacturer or importer and holds the
7 cigarettes in accordance with this Act, shall hold an
8 unstamped cigarette package.
9 Each roll of stamps, or group of sheets, shall have a
10 unique serial number, which shall be legible at the point of
11 sale. The Department shall keep records of which distributor
12 purchases each roll or group of sheets identified by serial
13 number. If the Department permits distributors to purchase
14 partial rolls or sheets, in no case may stamps bearing the
15 same serial number be sold to more than one distributor. The
16 remainder of the roll or sheet, if any, shall either be
17 retained for later purchases by the same distributor or
18 destroyed.
19 Only licensed distributors may purchase or obtain
20 cigarette stamps. Distributors shall not sell or provide the
21 stamps to any other distributor or person.Each distributor
22 of cigarettes, before delivering or causing to be delivered
23 any original package of cigarettes in this State to a
24 purchaser, shall firmly affix a proper stamp or stamps to
25 each such package, or (in case of manufacturers of cigarettes
26 in original packages which are contained inside a sealed
27 transparent wrapper) shall imprint the required language on
28 the original package of cigarettes beneath such outside
29 wrapper, as hereinafter provided.
30 No stamp or imprint may be affixed to, or made upon, any
31 package of cigarettes unless that package complies with all
32 requirements of the federal Cigarette Labeling and
33 Advertising Act, 15 U.S.C. 1331 and following, for the
34 placement of labels, warnings, or any other information upon
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1 a package of cigarettes that is sold within the United
2 States. Under the authority of Section 6, the Department
3 shall revoke the license of any distributor that is
4 determined to have violated this paragraph. A person may not
5 affix a stamp on a package of cigarettes, cigarette papers,
6 wrappers, or tubes if that individual package has been marked
7 for export outside the United States with a label or notice
8 in compliance with Section 290.185 of Title 27 of the Code of
9 Federal Regulations. It is not a defense to a proceeding for
10 violation of this paragraph that the label or notice has been
11 removed, mutilated, obliterated, or altered in any manner.
12 The Department, or any person authorized by the
13 Department, shall sell such stamps only to persons holding
14 valid licenses as distributors under this Act. The Department
15 may refuse to sell stamps to any distributorperson who does
16 not comply with the provisions of this Act. Beginning on the
17 effective date of this amendatory Act of the 92nd General
18 Assembly and through June 30, 2002, persons holding valid
19 licenses as distributors may purchase cigarette tax stamps up
20 to an amount equal to 115% of the distributor's average
21 monthly cigarette tax stamp purchases over the 12 calendar
22 months prior to the effective date of this amendatory Act of
23 the 92nd General Assembly.
24 Prior to December 1, 1985, the Department shall allow a
25 distributor 21 days in which to make final payment of the
26 amount to be paid for such stamps, by allowing the
27 distributor to make payment for the stamps at the time of
28 purchasing them with a draft which shall be in such form as
29 the Department prescribes, and which shall be payable within
30 21 days thereafter: Provided that such distributor has filed
31 with the Department, and has received the Department's
32 approval of, a bond, which is in addition to the bond
33 required under Section 4 of this Act, payable to the
34 Department in an amount equal to 80% of such distributor's
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1 average monthly tax liability to the Department under this
2 Act during the preceding calendar year or $500,000, whichever
3 is less. The Bond shall be joint and several and shall be in
4 the form of a surety company bond in such form as the
5 Department prescribes, or it may be in the form of a bank
6 certificate of deposit or bank letter of credit. The bond
7 shall be conditioned upon the distributor's payment of amount
8 of any 21-day draft which the Department accepts from that
9 distributor for the delivery of stamps to that distributor
10 under this Act. The distributor's failure to pay any such
11 draft, when due, shall also make such distributor
12 automatically liable to the Department for a penalty equal to
13 25% of the amount of such draft.
14 On and after December 1, 1985, the Department shall allow
15 a distributor 30 days in which to make final payment of the
16 amount to be paid for such stamps, by allowing the
17 distributor to make payment for the stamps at the time of
18 purchasing them with a draft which shall be in such form as
19 the Department prescribes, and which shall be payable within
20 30 days thereafter, and beginning on January 1, 2003 and
21 thereafter, the draft shall be payable by means of electronic
22 funds transfer: Provided that such distributor has filed
23 with the Department, and has received the Department's
24 approval of, a bond, which is in addition to the bond
25 required under Section 4 of this Act, payable to the
26 Department in an amount equal to 150% of such distributor's
27 average monthly tax liability to the Department under this
28 Act during the preceding calendar year or $750,000, whichever
29 is less, except that as to bonds filed on or after January 1,
30 1987, such additional bond shall be in an amount equal to
31 100% of such distributor's average monthly tax liability
32 under this Act during the preceding calendar year or
33 $750,000, whichever is less. The bond shall be joint and
34 several and shall be in the form of a surety company bond in
-14- LRB093 06358 SJM 06477 b
1 such form as the Department prescribes, or it may be in the
2 form of a bank certificate of deposit or bank letter of
3 credit. The bond shall be conditioned upon the distributor's
4 payment of the amount of any 30-day draft which the
5 Department accepts from that distributor for the delivery of
6 stamps to that distributor under this Act. The distributor's
7 failure to pay any such draft, when due, shall also make such
8 distributor automatically liable to the Department for a
9 penalty equal to 25% of the amount of such draft.
10 Every prior continuous compliance distributortaxpayer
11 shall be exempt from all requirements under this Section
12 concerning the furnishing of such bond, as defined in this
13 Section, as a condition precedent to his being authorized to
14 engage in the business licensed under this Act. This
15 exemption shall continue for each such taxpayer until such
16 time as he may be determined by the Department to be
17 delinquent in the filing of any returns, or is determined by
18 the Department (either through the Department's issuance of a
19 final assessment which has become final under the Act, or by
20 the taxpayer's filing of a return which admits tax to be due
21 that is not paid) to be delinquent or deficient in the paying
22 of any tax under this Act, at which time that taxpayer shall
23 become subject to the bond requirements of this Section and,
24 as a condition of being allowed to continue to engage in the
25 business licensed under this Act, shall be required to
26 furnish bond to the Department in such form as provided in
27 this Section. Such taxpayer shall furnish such bond for a
28 period of 2 years, after which, if the taxpayer has not been
29 delinquent in the filing of any returns, or delinquent or
30 deficient in the paying of any tax under this Act, the
31 Department may reinstate such person as a prior continuance
32 compliance taxpayer. Any taxpayer who fails to pay an
33 admitted or established liability under this Act may also be
34 required to post bond or other acceptable security with the
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1 Department guaranteeing the payment of such admitted or
2 established liability.
3 Any person aggrieved by any decision of the Department
4 under this Section may, within the time allowed by law,
5 protest and request a hearing, whereupon the Department shall
6 give notice and shall hold a hearing in conformity with the
7 provisions of this Act and then issue its final
8 administrative decision in the matter to such person. In the
9 absence of such a protest filed within the time allowed by
10 law, the Department's decision shall become final without any
11 further determination being made or notice given.
12 The Department shall discharge any surety and shall
13 release and return any bond or security deposited, assigned,
14 pledged, or otherwise provided to it by a distributor
15 taxpayer under this Section within 30 days after:
16 (1) Such distributortaxpayer becomes a prior continuous
17 compliance distributortaxpayer; or
18 (2) Such distributortaxpayer has ceased to collect
19 receipts on which he is required to remit tax to the
20 Department, has filed a final tax return, and has paid to the
21 Department an amount sufficient to discharge his remaining
22 tax liability as determined by the Department under this Act.
23 The Department shall make a final determination of the
24 distributor'staxpayer's outstanding tax liability as
25 expeditiously as possible after his final tax return has been
26 filed. If the Department cannot make such final
27 determination within 45 days after receiving the final tax
28 return, within such period it shall so notify the distributor
29 taxpayer, stating its reasons therefor.
30 The Department may authorize distributors to affix
31 revenue tax stamps by imprinting tax meter stamps upon
32 original packages of cigarettes, provided that the meter
33 impressions shall contain a number or mark, legible at the
34 point of sale, that is unique to the particular distributor.
-16- LRB093 06358 SJM 06477 b
1 The Department shall adopt rules and regulations relating to
2 the imprinting of such tax meter stamps as will result in
3 payment of the proper taxes as herein imposed. No distributor
4 may affix revenue tax stamps to original packages of
5 cigarettes by imprinting tax meter stamps thereon unless such
6 distributor has first obtained permission from the Department
7 to employ this method of affixation. The Department shall
8 regulate the use of tax meters and may, to assure the proper
9 collection of the taxes imposed by this Act, revoke or
10 suspend the privilege, theretofore granted by the Department
11 to any distributor, to imprint tax meter stamps upon original
12 packages of cigarettes.
13 Illinois cigarette manufacturers who place their
14 cigarettes in original packages which are contained inside a
15 sealed transparent wrapper, and similar out-of-State
16 cigarette manufacturers who elect to qualify and are accepted
17 by the Department as distributors under Section 4b of this
18 Act, shall pay the taxes imposed by this Act by remitting the
19 amount thereof to the Department by the 5th day of each month
20 covering cigarettes shipped or otherwise delivered in
21 Illinois to purchasers during the preceding calendar month.
22 Such manufacturers of cigarettes in original packages which
23 are contained inside a sealed transparent wrapper, before
24 delivering such cigarettes or causing such cigarettes to be
25 delivered in this State to purchasers, shall evidence their
26 obligation to remit the taxes due with respect to such
27 cigarettes by imprinting language to be prescribed by the
28 Department on each original package of such cigarettes
29 underneath the sealed transparent outside wrapper of such
30 original package, in such place thereon and in such manner as
31 the Department may designate. Such imprinted language shall
32 acknowledge the manufacturer's payment of or liability for
33 the tax imposed by this Act with respect to the distribution
34 of such cigarettes.
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1 A distributor shall not affix, or cause to be affixed,
2 any stamp or imprint to a package of cigarettes, as provided
3 for in this Section, if the tobacco product manufacturer, as
4 defined in Section 10 of the Tobacco Product Manufacturers'
5 Escrow Act, that made or sold the cigarettes has failed to
6 become a participating manufacturer, as defined in
7 subdivision (a)(1) of Section 15 of the Tobacco Product
8 Manufacturers' Escrow Act, or has failed to create a
9 qualified escrow fund for any cigarettes manufactured by the
10 tobacco product manufacturer and sold in this State or
11 otherwise failed to bring itself into compliance with
12 subdivision (a)(2) of Section 15 of the Tobacco Product
13 Manufacturers' Escrow Act.
14 (Source: P.A. 91-246, eff. 7-22-99; 92-322, eff. 1-1-02;
15 92-536, eff. 6-6-02; 92-737, eff. 7-25-02; revised 9-10-02.)
16 (35 ILCS 130/4) (from Ch. 120, par. 453.4)
17 Sec. 4. License required for manufacturers, importers,
18 distributors, and retailersDistributor's license. No person
19 may engage in business as a manufacturer, importer, retailer,
20 or distributor of cigarettes in this State within the meaning
21 of the first 2 definitions of distributor in Section 1 of
22 this Act without first having obtained a license therefor
23 from the Department. Application for license shall be made to
24 the Department in form as furnished and prescribed by the
25 Department. Each applicant for a license under this Section
26 shall furnish to the Department on the form signed and
27 verified by the applicant the following information:
28 (a) The name and address of the applicant;
29 (b) The address of eachthe location at which the
30 applicant proposes to engage in business withinas a
31 distributor of cigarettes in this State;
32 (c) The address of the location of the applicant's
33 principal place of business; provided, that the address
-18- LRB093 06358 SJM 06477 b
1 shall be updated by the licensee as necessary;
2 (d) If the applicant is a firm, partnership, or
3 association, the application shall state the name and
4 address of each of its members. If the applicant is a
5 corporation, the application shall state the name and
6 address of each of its officers and the name and address
7 of any person who owns, directly or indirectly, more than
8 5% of the ownership interests in the corporation; and
9 (e)(c) Such other additional information as the
10 Department may lawfully require by its rules and
11 regulations.
12 The annual license fee payable to the Department for each
13 distributor's, manufacturer's, and importer's license shall
14 be $250. The annual license fee payable to the Department for
15 each retailer's license shall be $100. The purpose of such
16 annual license feesfee is to defray the cost, to the
17 Department, of administering this Actserializing cigarette
18 tax stamps. Each applicant for license shall pay such fee to
19 the Department at the time of submitting his application for
20 license to the Department.
21 Every applicant who is required to procure a
22 distributor's license shall file with his application a joint
23 and several bond. Such bond shall be executed to the
24 Department of Revenue, with good and sufficient surety or
25 sureties residing or licensed to do business within the State
26 of Illinois, in the amount of $2,500, conditioned upon the
27 true and faithful compliance by the licensee with all of the
28 provisions of this Act. Such bond, or a reissue thereof, or a
29 substitute therefor, shall be kept in effect during the
30 entire period covered by the license.
31 A separate application for license shall be made, a
32 separate annual license fee paid, and a separate bond filed
33 with respect to distributors, for each place of business in
34 this State at which a person who is required to procure a
-19- LRB093 06358 SJM 06477 b
1 distributor's license under this Section proposes to engage
2 in business as a manufacturer, importer, retailer, or
3 distributor in Illinois under this Act. If the applicant does
4 not have a place of business in this State, an application
5 shall be made for the applicant's principal place of
6 business, wherever located. A separate license shall be
7 issued for each application.
8 The following are ineligible to receive a distributor's
9 license under this Act:
10 (1) an applicanta person who is not of good
11 character and reputation in the community in which
12 he resides;
13 (2) an applicanta person who has been
14 convicted of a felony under any Federal or State
15 law, if the Department, after investigation and a
16 hearing, if requested by the applicant, determines
17 that such person has not been sufficiently
18 rehabilitated to warrant the public trust;
19 (3) an applicant who owes $500 or more in
20 cigarette taxes;
21 (4) an applicant who has had a license under
22 this Act revoked by the Department within the past 2
23 years;
24 (5) an applicant who has been convicted of a
25 crime relating to cigarettes, including but not
26 limited to, selling stolen or counterfeit
27 cigarettes, receiving stolen or counterfeit
28 cigarettes, or involvement in the smuggling or
29 counterfeiting or cigarettes;
30 (6) an applicant who is a cigarette
31 manufacturer or importer that is neither (i) a
32 participating manufacturer as defined in subsection
33 II(jj) of the Master Settlement Agreement as defined
34 in Section 10 of the Tobacco Product Manufacturers'
-20- LRB093 06358 SJM 06477 b
1 Escrow Act nor (ii) in full compliance with Section
2 32 of this Act and the Tobacco Product
3 Manufacturers' Escrow Act;
4 (7) an applicant who has imported, or caused to
5 be imported, into the United States any cigarette in
6 violation of 19 U.S.C. 1681a;
7 (8) an applicant who has imported, or caused to
8 be imported, or manufactured for sale or
9 distribution in the United States any cigarette that
10 does not fully comply with the Federal Cigarette
11 Labeling and Advertising Act (15 U.S.C. 1331, et
12 seq.); or
13 (9) an applicant that is a corporation,
14 partnership, or other business entity, if any
15 officer, manager, or director thereof, or any
16 personsstockholder or stockholders owning, directly
17 or indirectly, in the aggregate, more than 5% of the
18 ownership interestsstock of such entity
19 corporation, would not be eligible to receive a
20 license under this Act for any reason.
21 The Department, upon receipt of an application, license
22 fee and bond in proper form if applicable, from a person who
23 is eligible to receive a distributor's license under this
24 Act, shall issue to such applicant a license in form as
25 prescribed by the Department, which license shall permit the
26 applicant to which it is issued to engage in business as a
27 manufacturer, importer, retailer, or distributor at the
28 Illinois place of business shown in his application, and in
29 any place of business located outside of Illinois. If the
30 licensee does not have an Illinois place of business, the
31 license shall permit the applicant to which it is issued to
32 engage in business as a manufacturer, importer, retailer, or
33 distributor, wherever located. All licenses issued by the
34 Department under this Act shall be valid for not to exceed
-21- LRB093 06358 SJM 06477 b
1 one year after issuance unless sooner revoked, canceled or
2 suspended as provided in this Act. No license issued under
3 this Act is transferable or assignable. Such license shall be
4 conspicuously displayed in the place of business conducted by
5 the licensee in Illinois under such license. If the licensee
6 does not have a place of business in Illinois, the license
7 shall be conspicuously displayed at the applicant's principal
8 place of business, wherever located. The Department shall
9 create and maintain a website setting forth the identity of
10 all licensed persons under this Section, itemized by type of
11 license possessed, and shall update the site no less
12 frequently than once per month.
13 Any person aggrieved by any decision of the Department
14 under this Section may, within 20 days after notice of the
15 decision, protest and request a hearing. Upon receiving a
16 request for a hearing, the Department shall give notice to
17 the person requesting the hearing of the time and place fixed
18 for the hearing and shall hold a hearing in conformity with
19 the provisions of this Act and then issue its final
20 administrative decision in the matter to that person. In the
21 absence of a protest and request for a hearing within 20
22 days, the Department's decision shall become final without
23 any further determination being made or notice given.
24 (Source: P.A. 91-901, eff. 1-1-01; 92-322, eff. 1-1-02.)
25 (35 ILCS 130/4a) (from Ch. 120, par. 453.4a)
26 Sec. 4a. If a distributorlicensee shall be convicted of
27 the violation of any of the provisions of this Act, or if his
28 license shall be revoked and no review is had of the order or
29 revocation, or if on review thereof the decision is adverse
30 to the distributorlicensee, or if a distributorlicensee
31 fails to pay an assessment as to which no judicial review is
32 sought and which has become final, or pursuant to which, upon
33 review thereof, the circuit court has entered a judgment that
-22- LRB093 06358 SJM 06477 b
1 is in favor of the Department and that has become final, the
2 bond filed pursuant to this Act shall thereupon be forfeited,
3 and the Department may institute a suit upon such bond in its
4 own name for the entire amount of such bond and costs. Such
5 suit upon the bond shall be in addition to any other remedy
6 provided for herein.
7 (Source: P.A. 79-1366.)
8 (35 ILCS 130/4b) (from Ch. 120, par. 453.4b)
9 Sec. 4b. Transactions only with other licensed entities.
10 A manufacturer or importer may sell or distribute cigarettes
11 to a person located or doing business within this State only
12 if that person is a licensed importer or distributor. An
13 importer may obtain cigarettes from a person only if that
14 person is a licensed manufacturer. A distributor may sell or
15 distribute cigarettes to a person located or doing business
16 within this State only if that person is a licensed
17 distributor or retailer. A distributor may obtain cigarettes
18 only from a licensed manufacturer, importer, or distributor.
19 A retailer may obtain cigarettes only from a licensed
20 distributor.The Department may, in its discretion, upon
21 application, issue permits authorizing the payment of the tax
22 herein imposed by out-of-State cigarette manufacturers who
23 are not required to be licensed as distributors of cigarettes
24 in this State, but who elect to qualify under this Act as
25 distributors of cigarettes in this State, and who, to the
26 satisfaction of the Department, furnish adequate security to
27 insure payment of the tax, provided that any such permit
28 shall extend only to cigarettes which such permittee
29 manufacturer places in original packages that are contained
30 inside a sealed transparent wrapper. Such permits shall be
31 issued without charge in such form as the Department may
32 prescribe and shall not be transferable or assignable.
33 The following are ineligible to receive a distributor's
-23- LRB093 06358 SJM 06477 b
1 permit under this Act:
2 (1) a person who is not of good character and reputation
3 in the community in which he resides;
4 (2) a person who has been convicted of a felony under
5 any Federal or State law, if the Department, after
6 investigation and a hearing, if requested by the applicant,
7 determines that such person has not been sufficiently
8 rehabilitated to warrant the public trust;
9 (3) a corporation, if any officer, manager or director
10 thereof, or any stockholder or stockholders owning in the
11 aggregate more than 5% of the stock of such corporation,
12 would not be eligible to receive a permit under this Act for
13 any reason.
14 With respect to cigarettes which come within the scope of
15 such a permit and which any such permittee delivers or causes
16 to be delivered in Illinois to purchasers, such permittee
17 shall remit the tax imposed by this Act at the times provided
18 for in Section 3 of this Act. Each such remittance shall be
19 accompanied by a return filed with the Department on a form
20 to be prescribed and furnished by the Department and shall
21 disclose such information as the Department may lawfully
22 require. Each such return shall be accompanied by a copy of
23 each invoice rendered by the permittee to any purchaser to
24 whom the permittee delivered cigarettes of the type covered
25 by the permit (or caused cigarettes of the type covered by
26 the permit to be delivered) in Illinois during the period
27 covered by such return.
28 Such permit may be suspended, canceled or revoked when,
29 at any time, the Department considers that the security given
30 is inadequate, or that such tax can more effectively be
31 collected from distributors located in this State, or
32 whenever the permittee violates any provision of this Act or
33 any lawful rule or regulation issued by the Department
34 pursuant to this Act or is determined to be ineligible for a
-24- LRB093 06358 SJM 06477 b
1 distributor's permit under this Act as provided in this
2 Section, whenever the permittee shall notify the Department
3 in writing of his desire to have the permit canceled. The
4 Department shall have the power, in its discretion, to issue
5 a new permit after such suspension, cancellation or
6 revocation, except when the person who would receive the
7 permit is ineligible to receive a distributor's permit under
8 this Act.
9 All permits issued by the Department under this Act shall
10 be valid for not to exceed one year after issuance unless
11 sooner revoked, canceled or suspended as in this Act
12 provided.
13 (Source: P.A. 79-387.)
14 (35 ILCS 130/5) (from Ch. 120, par. 453.5)
15 Sec. 5. Printing tax stamps. The Department shall adopt
16 the design or designs of the tax stamps or alternative tax
17 indicia and shall procure the printing of such stamps or
18 alternative tax indicia in such amounts and denominations as
19 it deems necessary to provide for the affixation of the
20 proper amount of tax stamps or alternative tax indicia to
21 each original package of cigarettes. Each roll of stamps or
22 alternative tax indicia shall conform to the requirements of
23 Section 3.
24 (Source: P.A. 92-322, eff. 1-1-02.)
25 (35 ILCS 130/6) (from Ch. 120, par. 453.6)
26 Sec. 6. Revocation, cancellation, or suspension of
27 license. The Department may, after notice and hearing as
28 provided for by this Act, revoke, cancel or suspend the
29 license of any manufacturer, importer, retailer, or
30 distributor for the violation of any provision of this Act,
31 or for noncompliance with any provision herein contained, or
32 for any noncompliance with any lawful rule or regulation
-25- LRB093 06358 SJM 06477 b
1 promulgated by the Department under Section 8 of this Act, or
2 because the licensee is determined to be ineligible for a
3 distributor's license for any one or more of the reasons
4 provided for in Section 4 of this Act. However, no such
5 license shall be revoked, cancelled or suspended, except
6 after a hearing by the Department with notice to the licensee
7 distributor, as aforesaid, and affording such licensee
8 distributor a reasonable opportunity to appear and defend,
9 and any licenseedistributor aggrieved by any decision of the
10 Department with respect thereto may have the determination of
11 the Department judicially reviewed, as herein provided.
12 The Department may revoke, cancel, or suspend the license
13 of any distributor for a violation of the Tobacco Product
14 Manufacturers' Escrow Enforcement Act as provided in Section
15 20 of that Act.
16 Any licenseedistributor aggrieved by any decision of the
17 Department under this Section may, within 20 days after
18 notice of the decision, protest and request a hearing. Upon
19 receiving a request for a hearing, the Department shall give
20 notice in writing to the licenseedistributor requesting the
21 hearing that contains a statement of the charges preferred
22 against the licenseedistributor and that states the time and
23 place fixed for the hearing. The Department shall hold the
24 hearing in conformity with the provisions of this Act and
25 then issue its final administrative decision in the matter to
26 the licenseedistributor. In the absence of a protest and
27 request for a hearing within 20 days, the Department's
28 decision shall become final without any further determination
29 being made or notice given.
30 No license so revoked, as aforesaid, shall be reissued to
31 any such licenseedistributor within a period of 6 months
32 after the date of the final determination of such revocation.
33 No such license shall be reissued at all so long as the
34 person who would receive the license is ineligible to receive
-26- LRB093 06358 SJM 06477 b
1 a distributor's license under this Act for any one or more of
2 the reasons provided for in Section 4 of this Act.
3 The Department upon complaint filed in the circuit court
4 may by injunction restrain any person who fails, or refuses,
5 to comply with any of the provisions of this Act from acting
6 as a distributor of cigarettes in this State.
7 (Source: P.A. 91-901, eff. 1-1-01; 92-737, eff. 7-25-02.)
8 (35 ILCS 130/7) (from Ch. 120, par. 453.7)
9 Sec. 7. The Department or any officer or employee of the
10 Department designated, in writing, by the Director thereof,
11 shall at its or his or her own instance, or on the written
12 request of any licenseedistributor or other interested party
13 to the proceeding, issue subpoenas requiring the attendance
14 of and the giving of testimony by witnesses, and subpoenas
15 duces tecum requiring the production of books, papers,
16 records or memoranda. All subpoenas and subpoenas duces tecum
17 issued under the terms of this Act may be served by any
18 person of full age. The fees of witnesses for attendance and
19 travel shall be the same as the fees of witnesses before the
20 circuit court of this State; such fees to be paid when the
21 witness is excused from further attendance. When the witness
22 is subpoenaed at the instance of the Department or any
23 officer or employee thereof, such fees shall be paid in the
24 same manner as other expenses of the Department, and when the
25 witness is subpoenaed at the instance of any other party to
26 any such proceeding, the cost of service of the subpoena or
27 subpoena duces tecum and the fee of the witness shall be
28 borne by the party at whose instance the witness is summoned.
29 In such case the Department, in its discretion, may require a
30 deposit to cover the cost of such service and witness fees. A
31 subpoena or subpoena duces tecum so issued shall be served in
32 the same manner as a subpoena or subpoena duces tecum issued
33 out of a court.
-27- LRB093 06358 SJM 06477 b
1 Any circuit court of this State, upon the application of
2 the Department or any officer or employee thereof, or upon
3 the application of any other party to the proceeding, may, in
4 its discretion, compel the attendance of witnesses, the
5 production of books, papers, records or memoranda and the
6 giving of testimony before the Department or any officer or
7 employee thereof conducting an investigation or holding a
8 hearing authorized by this Act, by an attachment for
9 contempt, or otherwise, in the same manner as production of
10 evidence may be compelled before the court.
11 The Department or any officer or employee thereof, or any
12 other party in an investigation or hearing before the
13 Department, may cause the depositions of witnesses within the
14 State to be taken in the manner prescribed by law for like
15 depositions, or depositions for discovery in civil actions in
16 courts of this State, and to that end compel the attendance
17 of witnesses and the production of books, papers, records or
18 memoranda, in the same manner hereinbefore provided.
19 (Source: P.A. 83-334.)
20 (35 ILCS 130/9) (from Ch. 120, par. 453.9)
21 Sec. 9. Reports.
22 (a) In General. Distributors and retailers shall submit
23 to the Department monthly reports setting forth the following
24 information, itemized or submitted separately for each of
25 their places of business:
26 (1) the quantities of cigarettes, by brand style, on
27 hand both at the beginning and end of the reporting
28 period;
29 (2) the quantities of cigarettes, by brand style and
30 transaction, that were received during the reporting
31 period and the name and address of each person from whom
32 those products were received; and
33 (3) the quantities of cigarettes, by brand style and
-28- LRB093 06358 SJM 06477 b
1 transaction, distributed or shipped during the reporting
2 period (other than sales directly to consumers) and the
3 name and address of each person to whom those products
4 were distributed or shipped.
5 (b) Manufacturers and importers. Manufacturers and
6 importers shipping cigarettes into or within this State shall
7 file a monthly report with the Department regarding those
8 cigarettes containing the information set forth in subsection
9 (a) of this Section.
10 (c) Tax stamps. Distributor reports submitted pursuant to
11 subsection (a) shall be further itemized to disclose the
12 quantity of reported cigarettes bearing tax stamps of this
13 State, tax-exempt stamps of this State, stamps of another
14 state, and unstamped cigarettes. The distributor reports also
15 shall include, if applicable, the quantity of Illinois tax
16 and tax-exempt stamps that were not affixed to cigarettes and
17 that were on hand at the beginning and end of the reporting
18 period, the quantity of each type of Illinois stamp received
19 during the reporting period, and the quantity of each type of
20 Illinois stamp applied during the reporting period.
21 Distributors who sell cigarettes into both this State and
22 other states shall itemize this report to separately indicate
23 sales into the State of Illinois.
24 (d) Rules. The Department may adopt rules requiring such
25 additional information in the monthly reports as it may
26 determine is necessary or appropriate for purposes of
27 enforcing the provisions of this Act.
28 (e) Access to reports by general public. Reports
29 submitted by licensees shall be subject to public disclosure
30 as provided under applicable law. In no case, however, shall
31 information about quantities of cigarettes by brand be
32 released to anyone other than those permitted access to
33 records and reports under Section 11.Returns; remittance.
34 Every distributor who is required to procure a license under
-29- LRB093 06358 SJM 06477 b
1 this Act, but who is not a manufacturer of cigarettes in
2 original packages which are contained in a sealed transparent
3 wrapper, shall, on or before the 15th day of each calendar
4 month, file a return with the Department, showing the
5 quantity of cigarettes manufactured during the preceding
6 calendar month, the quantity of cigarettes brought into this
7 State or caused to be brought into this State from outside
8 this State during the preceding calendar month without
9 authorized evidence on the original packages of such
10 cigarettes underneath the sealed transparent wrapper thereof
11 that the tax liability imposed by this Act has been assumed
12 by the out-of-State seller of such cigarettes, the quantity
13 of cigarettes purchased tax-paid during the preceding
14 calendar month either within or outside this State, and the
15 quantity of cigarettes sold or otherwise disposed of during
16 the preceding calendar month. Such return shall be filed upon
17 forms furnished and prescribed by the Department and shall
18 contain such other information as the Department may
19 reasonably require. The Department may promulgate rules to
20 require that the distributor's return be accompanied by
21 appropriate computer-generated magnetic media supporting
22 schedule data in the format required by the Department,
23 unless, as provided by rule, the Department grants an
24 exception upon petition of a distributor.
25 Illinois manufacturers of cigarettes in original packages
26 which are contained inside a sealed transparent wrapper shall
27 file a return by the 5th day of each month covering the
28 preceding calendar month. Each such return shall be
29 accompanied by the appropriate remittance for tax as provided
30 in the last paragraph of Section 3 of this Act. Each such
31 return shall show the quantity of such cigarettes
32 manufactured during the period covered by the return, the
33 quantity of cigarettes sold or otherwise disposed of during
34 the period covered by the return and such other information
-30- LRB093 06358 SJM 06477 b
1 as the Department may lawfully require. Such returns shall be
2 filed on forms prescribed and furnished by the Department.
3 Each such return shall be accompanied by a copy of each
4 invoice rendered by such manufacturer to any purchaser to
5 whom such manufacturer delivered cigarettes (or caused
6 cigarettes to be delivered) during the period covered by the
7 return. The Department may promulgate rules to require that
8 the manufacturer's return be accompanied by appropriate
9 computer-generated magnetic media supporting schedule data in
10 the format required by the Department, unless, as provided by
11 rule, the Department grants an exception upon petition of a
12 manufacturer.
13 (Source: P.A. 92-322, eff. 1-1-02.)
14 (35 ILCS 130/9a) (from Ch. 120, par. 453.9a)
15 Sec. 9a. Declaration of possession on cigarettes on
16 which tax not paid.
17 (a) In the event that unstamped cigarettes are acquired
18 by a consumer for use, storage, or consumption in this State,
19 that consumer, within 30 days after acquiring the cigarettes,
20 shall file with the Department a consumer return declaring
21 the possession of the cigarettes and shall transmit with the
22 consumer return to the Department the tax imposed by this
23 Act.
24 (b) The consumer return referred to in subsection (a)
25 shall contain the name and address of the person possessing
26 the cigarettes involved, the location of the cigarettes, and
27 the quantity, brand name, place, and date of the acquisition
28 of the cigarettes.
29 (c) The filing of a consumer return and the payment of
30 tax under this Section shall not relieve the consumer or any
31 other person of liability for any civil or criminal penalties
32 as may be provided under this Act.Examination and correction
33 of returns.
-31- LRB093 06358 SJM 06477 b
1 (1) As soon as practicable after any return is filed,
2 the Department shall examine such return and shall correct
3 such return according to its best judgment and information,
4 which return so corrected by the Department shall be prima
5 facie correct and shall be prima facie evidence of the
6 correctness of the amount of tax due, as shown therein.
7 Instead of requiring the distributor to file an amended
8 return, the Department may simply notify the distributor of
9 the correction or corrections it has made. Proof of such
10 correction by the Department may be made at any hearing
11 before the Department or in any legal proceeding by a
12 reproduced copy of the Department's record relating thereto
13 in the name of the Department under the certificate of the
14 Director of Revenue. Such reproduced copy shall, without
15 further proof, be admitted into evidence before the
16 Department or in any legal proceeding and shall be prima
17 facie proof of the correctness of the amount of tax due, as
18 shown therein. If the Department finds that any amount of tax
19 is due from the distributor, the Department shall issue the
20 distributor a notice of tax liability for the amount of tax
21 claimed by the Department to be due, together with a penalty
22 in an amount determined in accordance with Sections 3-3, 3-5
23 and 3-6 of the Uniform Penalty and Interest Act. If, in
24 administering the provisions of this Act, comparison of a
25 return or returns of a distributor with the books, records
26 and inventories of such distributor discloses a deficiency
27 which cannot be allocated by the Department to a particular
28 month or months, the Department shall issue the distributor a
29 notice of tax liability for the amount of tax claimed by the
30 Department to be due for a given period, but without any
31 obligation upon the Department to allocate such deficiency to
32 any particular month or months, together with a penalty in an
33 amount determined in accordance with Sections 3-3, 3-5 and
34 3-6 of the Uniform Penalty and Interest Act, under which
-32- LRB093 06358 SJM 06477 b
1 circumstances the aforesaid notice of tax liability shall be
2 prima facie correct and shall be prima facie evidence of the
3 correctness of the amount of tax due, as shown therein; and
4 proof of such correctness may be made in accordance with, and
5 the admissibility of a reproduced copy of such notice of tax
6 liability shall be governed by, all the provisions of this
7 Act applicable to corrected returns. If any distributor
8 filing any return dies or becomes a person under legal
9 disability at any time before the Department issues its
10 notice of tax liability, such notice shall be issued to the
11 administrator, executor or other legal representative, as
12 such, of such distributor.
13 (2) If, within 60 days after such notice of tax
14 liability, the distributor or his or her legal representative
15 files a protest to such notice of tax liability and requests
16 a hearing thereon, the Department shall give notice to such
17 distributor or legal representative of the time and place
18 fixed for such hearing, and shall hold a hearing in
19 conformity with the provisions of this Act, and pursuant
20 thereto shall issue a final assessment to such distributor or
21 legal representative for the amount found to be due as a
22 result of such hearing. If a protest to the notice of tax
23 liability and a request for a hearing thereon is not filed
24 within 60 days after such notice of tax liability, such
25 notice of tax liability shall become final without the
26 necessity of a final assessment being issued and shall be
27 deemed to be a final assessment.
28 (3) In case of failure to pay the tax, or any portion
29 thereof, or any penalty provided for in this Act, when due,
30 the Department may bring suit to recover the amount of such
31 tax, or portion thereof, or penalty; or, if the taxpayer dies
32 or becomes incompetent, by filing claim therefor against his
33 estate; provided that no such action with respect to any tax,
34 or portion thereof, or penalty, shall be instituted more than
-33- LRB093 06358 SJM 06477 b
1 2 years after the cause of action accrues, except with the
2 consent of the person from whom such tax or penalty is due.
3 After the expiration of the period within which the
4 person assessed may file an action for judicial review under
5 the Administrative Review Law without such an action being
6 filed, a certified copy of the final assessment or revised
7 final assessment of the Department may be filed with the
8 Circuit Court of the county in which the taxpayer has his or
9 her principal place of business, or of Sangamon County in
10 those cases in which the taxpayer does not have his principal
11 place of business in this State. The certified copy of the
12 final assessment or revised final assessment shall be
13 accompanied by a certification which recites facts that are
14 sufficient to show that the Department complied with the
15 jurisdictional requirements of the Law in arriving at its
16 final assessment or its revised final assessment and that the
17 taxpayer had his or her opportunity for an administrative
18 hearing and for judicial review, whether he availed himself
19 or herself of either or both of these opportunities or not.
20 If the court is satisfied that the Department complied with
21 the jurisdictional requirements of the Law in arriving at its
22 final assessment or its revised final assessment and that the
23 taxpayer had his or her opportunity for an administrative
24 hearing and for judicial review, whether he or she availed
25 himself or herself of either or both of these opportunities
26 or not, the court shall enter judgment in favor of the
27 Department and against the taxpayer for the amount shown to
28 be due by the final assessment or the revised final
29 assessment, and such judgment shall be filed of record in the
30 court. Such judgment shall bear the rate of interest set in
31 the Uniform Penalty and Interest Act, but otherwise shall
32 have the same effect as other judgments. The judgment may be
33 enforced, and all laws applicable to sales for the
34 enforcement of a judgment shall be applicable to sales made
-34- LRB093 06358 SJM 06477 b
1 under such judgments. The Department shall file the certified
2 copy of its assessment, as herein provided, with the Circuit
3 Court within 2 years after such assessment becomes final
4 except when the taxpayer consents in writing to an extension
5 of such filing period.
6 If, when the cause of action for a proceeding in court
7 accrues against a person, he or she is out of the State, the
8 action may be commenced within the times herein limited,
9 after his or her coming into or return to the State; and if,
10 after the cause of action accrues, he or she departs from and
11 remains out of the State, the time of his or her absence is
12 no part of the time limited for the commencement of the
13 action; but the foregoing provisions concerning absence from
14 the State shall not apply to any case in which, at the time
15 the cause of action accrues, the party against whom the cause
16 of action accrues is not a resident of this State. The time
17 within which a court action is to be commenced by the
18 Department hereunder shall not run while the taxpayer is a
19 debtor in any proceeding under the Federal Bankruptcy Act nor
20 thereafter until 90 days after the Department is notified by
21 such debtor of being discharged in bankruptcy.
22 No claim shall be filed against the estate of any
23 deceased person or a person under legal disability for any
24 tax or penalty or part of either except in the manner
25 prescribed and within the time limited by the Probate Act of
26 1975, as amended.
27 The remedies provided for herein shall not be exclusive,
28 but all remedies available to creditors for the collection of
29 debts shall be available for the collection of any tax or
30 penalty due hereunder.
31 The collection of tax or penalty by any means provided
32 for herein shall not be a bar to any prosecution under this
33 Act.
34 The certificate of the Director of the Department to the
-35- LRB093 06358 SJM 06477 b
1 effect that a tax or amount required to be paid by this Act
2 has not been paid, that a return has not been filed, or that
3 information has not been supplied pursuant to the provisions
4 of this Act, shall be prima facie evidence thereof.
5 All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,
6 5g, 5i and 5j of the Retailers' Occupation Tax Act, which are
7 not inconsistent with this Act, and Section 3-7 of the
8 Uniform Penalty and Interest Act shall apply, as far as
9 practicable, to the subject matter of this Act to the same
10 extent as if such provisions were included herein. References
11 in such incorporated Sections of the "Retailers' Occupation
12 Tax Act" to retailers, to sellers or to persons engaged in
13 the business of selling tangible personal property shall mean
14 distributors when used in this Act.
15 (Source: P.A. 92-322, eff. 1-1-02.)
16 (35 ILCS 130/9c) (from Ch. 120, par. 453.9c)
17 Sec. 9c. "Transporter" means any person transporting
18 into or within this State original packages of cigarettes
19 which are not tax stamped as required by this Act, except:
20 (a) A person transporting into this State unstamped
21 original packages containing a total of not more than 500
22 2000 cigarettes in any single lot or shipment;
23 (b) a licensed cigarette distributor in compliance with
24 Section 3, a licensed manufacturer, or a licensed importer
25 under this Act;
26 (c) a common carrier;
27 (d) a person transporting cigarettes under Federal
28 internal bond or custom control that are non-tax paid under
29 Chapter 52 of the Internal Revenue Code of 1954, as amended;
30 (e) a person engaged in transporting cigarettes to a
31 cigarette dealer who is properly licensed as a distributor
32 under the Illinois Cigarette Tax Act or the Illinois
33 Cigarette Use Tax Act, or under the laws of any other state,
-36- LRB093 06358 SJM 06477 b
1 and who has in his possession during the course of
2 transporting such cigarettes a bill of lading, waybill, or
3 other similar commercial document which was issued by or for
4 a manufacturer of cigarettes who holds a valid permit as a
5 cigarette manufacturer under Chapter 52, Internal Revenue
6 Code of 1954, as subsequently amended, and which shows that
7 the cigarettes are being transported by or at the direction
8 of such manufacturer to such licensed cigarette dealer.
9 Any transporter desiring to possess or acquire for
10 transportation or transport upon the highways, roads or
11 streets of this State more than 5002000 cigarettes which are
12 not contained in original packages that are Illinois tax
13 stamped shall obtain a permit from the Department authorizing
14 such transporter to possess or acquire for transportation or
15 transport the cigarettes, and he shall have the permit in the
16 transporting vehicle during the period of transportation of
17 the cigarettes. The application for the permit shall be in
18 such form and shall contain such information as may be
19 prescribed by the Department. The Department may issue a
20 permit for a single load or shipment or for a number of loads
21 or shipments to be transported under specified conditions.
22 Any transporter who ships unstamped cigarette packages
23 within or into this State other than to a licensed
24 manufacturer, importer, or distributor shall first file with
25 the Department notice of the shipment.
26 Any person bringing into or conveying within this State
27 original packages of cigarettes that are not tax stamped as
28 required by this Act shall carry, in the vehicle used to
29 convey the shipment, invoices or equivalent documentation of
30 the shipment for all cigarettes in the shipment. The invoices
31 or documentation shall show the true name and address of the
32 consignor or seller, the true name and address of the
33 consignee or purchaser, and the quantity and brands of the
34 cigarettes so transported.
-37- LRB093 06358 SJM 06477 b
1 Any cigarettes transported on the highways, roads or
2 streets of this State under conditions which violate any
3 requirement of this Section, and the vehicle containing such
4 cigarettes, are subject to seizure by the Department, and to
5 confiscation and forfeiture in the same manner as is provided
6 for in Section 18a of this Act. Any such confiscated and
7 forfeited property shall be sold or destroyed in the same
8 manner and under the same conditions as provided for in
9 Section 21 of this Act, with the proceeds from any such sale
10 being deposited in the State Treasury.
11 Any person who violates any requirement of this Section
12 is guilty of a Class 4 felony.
13 Any transporter who, with intent to defeat or evade or
14 with intent to aid another to defeat or evade the tax imposed
15 by this Act, at any given time, transports 40,000 or more
16 cigarettes upon the highways, roads or streets of this State
17 under conditions which violate any requirement of this
18 Section shall be guilty of a Class 3 felony.
19 (Source: P.A. 83-1428.)
20 (35 ILCS 130/9d) (from Ch. 120, par. 453.9d)
21 Sec. 9d. If it appears, after claim therefor filed with
22 the Department, that an amount of tax or penalty has been
23 paid which was not due under this Act, whether as the result
24 of a mistake of fact or an error of law, except as
25 hereinafter provided, then the Department shall issue a
26 credit memorandum or refund to the person who made the
27 erroneous payment or, if that person has died or become a
28 person under legal disability, to his or her legal
29 representative, as such.
30 If it is determined that the Department should issue a
31 credit or refund under this Act, the Department may first
32 apply the amount thereof against any amount of tax or penalty
33 due under this Act or under the Cigarette Use Tax Act from
-38- LRB093 06358 SJM 06477 b
1 the person entitled to such credit or refund. For this
2 purpose, if proceedings are pending to determine whether or
3 not any tax or penalty is due under this Act or under the
4 Cigarette Use Tax Act from such person, the Department may
5 withhold issuance of the credit or refund pending the final
6 disposition of such proceedings and may apply such credit or
7 refund against any amount found to be due to the Department
8 under this Act or under the Cigarette Use Tax Act as a result
9 of such proceedings. The balance, if any, of the credit or
10 refund shall be issued to the person entitled thereto.
11 If no tax or penalty is due and no proceeding is pending
12 to determine whether such taxpayer is indebted to the
13 Department for tax or penalty, the credit memorandum or
14 refund shall be issued to the claimant; or (in the case of a
15 credit memorandum) the credit memorandum may be assigned and
16 set over by the lawful holder thereof, subject to reasonable
17 rules of the Department, to any other person who is subject
18 to this Act or the Cigarette Use Tax Act, and the amount
19 thereof shall be applied by the Department against any tax or
20 penalty due or to become due under this Act or under the
21 Cigarette Use Tax Act from such assignee.
22 As to any claim filed hereunder with the Department on
23 and after each January 1 and July 1, no amount of tax or
24 penalty erroneously paid (either in total or partial
25 liquidation of a tax or penalty under this Act) more than 3
26 years prior to such January 1 and July 1, respectively, shall
27 be credited or refunded, except that if both the Department
28 and the taxpayer have agreed to an extension of time to issue
29 a notice of tax liability under this Act, the claim may be
30 filed at any time prior to the expiration of the period
31 agreed upon.
32 If the Department approves a claim for stamps affixed to
33 a product returned to a manufacturer or for replacement of
34 stamps, the credit memorandum shall not exceed the face value
-39- LRB093 06358 SJM 06477 b
1 of stamps originally affixed, and replacement stamps shall be
2 issued only in an amount equal to the value of the stamps
3 previously affixed. Higher denomination stamps shall not be
4 issued as replacements for lower value stamps. Distributors
5 must prove the face value of the stamps which have been
6 destroyed or returned to manufacturers when filing claims.
7 Any credit or refund that is allowed under this Act shall
8 bear interest at the rate and in the manner set forth in the
9 Uniform Penalty and Interest Act.
10 In case the Department determines that the claimant is
11 entitled to a refund, such refund shall be made only from
12 such appropriation as may be available for that purpose. If
13 it appears unlikely that the amount appropriated would permit
14 everyone having a claim allowed during the period covered by
15 such appropriation to elect to receive a cash refund, the
16 Department, by rule or regulation, shall provide for the
17 payment of refunds in hardship cases and shall define what
18 types of cases qualify as hardship cases.
19 If the Department approves a claim for the physical
20 replacement of cigarette tax stamps, the Department (subject
21 to the same limitations as those provided for hereinbefore in
22 this Section) may issue an assignable credit memorandum or
23 refund to the claimant or to the claimant's legal
24 representative.
25 The provisions of Sections 6a, 6b and 6c of the
26 Retailers' Occupation Tax Act which are not inconsistent with
27 this Act, shall apply, as far as practicable, to the subject
28 matter of this Act to the same extent as if such provisions
29 were included herein.
30 (Source: P.A. 90-491, eff. 1-1-98.)
31 (35 ILCS 130/10b) (from Ch. 120, par. 453.10b)
32 Sec. 10b. All information received by the Department
33 from reports or consumer returns filed under this Act, or
-40- LRB093 06358 SJM 06477 b
1 from any investigation conducted under this Act, shall be
2 confidential, except for official purposes, and any person
3 who divulges any such information in any manner, except in
4 accordance with a proper judicial order or as otherwise
5 provided by law, shall be guilty of a Class A misdemeanor.
6 Nothing in this Act prevents the Director of Revenue from
7 publishing or making available to the public the names and
8 addresses of persons filing reports or consumer returns under
9 this Act, or reasonable statistics concerning the operation
10 of the tax by grouping the contents of reports or consumer
11 returns so that the information in any individual report or
12 consumer return is not disclosed.
13 Nothing in this Act prevents the Director of Revenue from
14 divulging to the United States Government or the government
15 of any other state, or any officer or agency thereof, for
16 exclusively official purposes, information received by the
17 Department in administering this Act, provided that such
18 other governmental agency agrees to divulge requested tax
19 information to the Department.
20 The furnishing upon request of the Auditor General, or
21 his authorized agents, for official use, of reports or
22 consumer returns filed and information related thereto under
23 this Act is deemed to be an official purpose within the
24 meaning of this Section.
25 The furnishing of financial information to a home rule
26 unit with a population in excess of 2,000,000 that has
27 imposed a tax similar to that imposed by this Act under its
28 home rule powers, upon request of the Chief Executive of the
29 home rule unit, is an official purpose within the meaning of
30 this Section, provided the home rule unit agrees in writing
31 to the requirements of this Section. Information so provided
32 is subject to all confidentiality provisions of this Section.
33 The written agreement shall provide for reciprocity,
34 limitations on access, disclosure, and procedures for
-41- LRB093 06358 SJM 06477 b
1 requesting information.
2 The Director may make available to any State agency,
3 including the Illinois Supreme Court, which licenses persons
4 to engage in any occupation, information that a person
5 licensed by such agency has failed to file reports or pay the
6 taxreturns under this Act or pay the tax, penalty and
7 interest shown therein, or has failed to pay any final
8 assessment of tax, penalty or interest due under this Act.
9 An assessment is final when all proceedings in court for
10 review of such assessment have terminated or the time for the
11 taking thereof has expired without such proceedings being
12 instituted.
13 The Director shall make available for public inspection
14 in the Department's principal office and for publication, at
15 cost, administrative decisions issued on or after January 1,
16 1995. These decisions are to be made available in a manner so
17 that the following taxpayer information is not disclosed:
18 (1) The names, addresses, and identification
19 numbers of the taxpayer, related entities, and employees.
20 (2) At the sole discretion of the Director, trade
21 secrets or other confidential information identified as
22 such by the taxpayer, no later than 30 days after receipt
23 of an administrative decision, by such means as the
24 Department shall provide by rule.
25 The Director shall determine the appropriate extent of
26 the deletions allowed in paragraph (2). In the event the
27 taxpayer does not submit deletions, the Director shall make
28 only the deletions specified in paragraph (1).
29 The Director shall make available for public inspection
30 and publication an administrative decision within 180 days
31 after the issuance of the administrative decision. The term
32 "administrative decision" has the same meaning as defined in
33 Section 3-101 of Article III of the Code of Civil Procedure.
34 Costs collected under this Section shall be paid into the Tax
-42- LRB093 06358 SJM 06477 b
1 Compliance and Administration Fund.
2 Nothing contained in this Act shall prevent the Director
3 from divulging information to any person pursuant to a
4 request or authorization made by the taxpayer or by an
5 authorized representative of the taxpayer.
6 (Source: P.A. 90-491, eff. 1-1-98.)
7 (35 ILCS 130/11) (from Ch. 120, par. 453.11)
8 Sec. 11. Records to be kept by manufacturers, retailers,
9 and distributors; inspection; revocation of license.
10 (a) Every manufacturer, retailer, importer, and
11 distributor of cigarettes, who is required to procure a
12 license under this Act, shall keep within Illinois, at his
13 licensed address, complete and accurate records of cigarettes
14 held, purchased, manufactured, brought in or caused to be
15 brought in from without the State, and sold, or otherwise
16 disposed of (other than in a retail transaction with a
17 consumer), and shall preserve and keep within Illinois at his
18 licensed address all invoices, bills of lading, sales
19 records, copies of bills of sale, inventory at the close of
20 each period for which a return is required of all cigarettes
21 on hand and of all cigarette revenue stamps, both affixed and
22 unaffixed, and other pertinent papers and documents relating
23 to the manufacture, purchase, sale or disposition of
24 cigarettes. The invoices or documentation shall show the name
25 and address of the other party and the quantity by brand
26 style of the cigarettes involved in the transaction.
27 (b) Records required under this Section shall be
28 preserved on the premises described in the relevant license
29 in such manner as to ensure permanency and accessibility for
30 inspection. With the Department's permission, persons with
31 multiple places of business may retain centralized records,
32 but shall transmit duplicates of the invoices of the
33 equivalent documentation to each place of business within 24
-43- LRB093 06358 SJM 06477 b
1 hours upon the request of the Department or its duly
2 authorized agents and employees.
3 (c) All books and records and other papers and documents
4 that are required by this Act to be kept shall be kept in the
5 English language, and shall, at all times during the usual
6 business hours of the day, be subject to inspection by the
7 Department or its duly authorized agents and employees, and
8 by the United States Secretary of the Treasury or his or her
9 duly authorized agents and employees. The Department at its
10 sole discretion may share the records and reports required by
11 this Section with other law enforcement officials of the
12 federal government or other states. The Department may adopt
13 rules that establish requirements, including record forms and
14 formats, for records required to be kept and maintained by
15 licenseestaxpayers. For purposes of this Section, "records"
16 means all data maintained by the licenseetaxpayer, including
17 data on paper, microfilm, microfiche or any type of
18 machine-sensible data compilation. Those books, records,
19 papers and documents shall be preserved for a period of at
20 least 53 years after the date of the documents, or the date
21 of the entries appearing in the records, unless the
22 Department, in writing, authorizes their destruction or
23 disposal at an earlier date.
24 (d) At all times during the usual business hours of the
25 day any duly authorized agent or employee of the Department
26 may enter any place of business of the manufacturer,
27 retailer, importer, or distributor, without a search warrant,
28 and inspect the records and premises and the stock or
29 packages of cigarettes and the vending devices therein
30 contained, to determine whether any of the provisions of this
31 Act are being violated. If such agent or employee is denied
32 free access or is hindered or interfered with in making such
33 examination as herein provided, the license of the
34 distributor at such premises shall be subject to revocation
-44- LRB093 06358 SJM 06477 b
1 by the Department.
2 (e) In any case where the Department or its duly
3 authorized agent or employee, or any peace officer of the
4 State, has knowledge or reasonable grounds to believe that
5 any vehicle is transporting cigarettes in violation of this
6 Act, the Department, its agent or employee, or the peace
7 officer, is authorized to stop the vehicle and inspect it for
8 contraband cigarettes.
9 (Source: P.A. 88-480.)
10 (35 ILCS 130/13) (from Ch. 120, par. 453.13)
11 Sec. 13. Whenever any original package of cigarettes is
12 found in the place of business or in the possession of any
13 person who is not a licensed distributor under this Act
14 without proper stamps affixed thereto, or an authorized
15 substitute therefor imprinted thereon, underneath the sealed
16 transparent wrapper of such original package, as required by
17 this Act, the prima facie presumption shall arise that such
18 original package of cigarettes is kept therein or is held by
19 such person in violation of the provisions of this Act.
20 (Source: Laws 1953, p. 255.)
21 (35 ILCS 130/13a new)
22 Sec. 13a. Failure to pay tax; punishment. Any person who,
23 with intent to defraud the State, refuses to pay any tax
24 imposed by this Act or attempts in any manner to evade or
25 defeat the tax or the payment thereof shall be guilty of a
26 Class 3 felony and, in addition to any term of imprisonment,
27 may be fined up to $10,000 or 5 times the retail value of the
28 cigarettes involved, whichever is greater.
29 (35 ILCS 130/14) (from Ch. 120, par. 453.14)
30 Sec. 14. Any person required by this Act to keep records
31 of any kind whatsoever, who shall fail to keep the records so
-45- LRB093 06358 SJM 06477 b
1 required or who shall falsify such records, shall be guilty
2 of a Class 4 felony, and in addition to any term of
3 imprisonment, may be fined up to $10,000 or 5 times the
4 retail value of the cigarettes involved, whichever is
5 greater.
6 (Source: P.A. 83-1428.)
7 (35 ILCS 130/15) (from Ch. 120, par. 453.15)
8 Sec. 15. Any person who shall fail to safely preserve
9 the records required by Section 11 of this Act for the period
10 of three years, as required therein, in such manner as to
11 insure permanency and accessibility for inspection by the
12 Department, shall be guilty of a Class A misdemeanorbusiness
13 offense and, in addition to any term of imprisonment, may be
14 fined up to $5,000.
15 (Source: P.A. 88-88.)
16 (35 ILCS 130/15a new)
17 Sec. 15a. Failure to comply with Act with intent to
18 defraud; punishment. Any person who fails to comply with any
19 requirements of this Act, with the intent to defraud the
20 State, is guilty of a Class 3 felony and, in addition to any
21 term of imprisonment, may be fined up to $10,000 or 5 times
22 the retail value of the cigarettes involved, whichever is
23 greater.
24 (35 ILCS 130/15b new)
25 Sec. 15b. Failure to comply with Act; punishment. Any
26 person who knowingly fails to comply with any requirements of
27 this Act or of rules adopted under the Act shall, for each
28 such offense, be fined not more than $5,000 or imprisoned not
29 more than 1 year or both.
30 (35 ILCS 130/18) (from Ch. 120, par. 453.18)
-46- LRB093 06358 SJM 06477 b
1 Sec. 18. Any duly authorized employee of the Department
2 may arrest without warrant any person committing in his
3 presence a violation of any of the provisions of this Act,
4 and may without a search warrant inspect all cigarettes
5 located in any place of business and seize any original
6 packages not tax stamped or tax imprinted underneath the
7 sealed transparent wrapper of such original packages in
8 accordance with the provisions of this Act and any vending
9 device in which such packages may be found, and such original
10 packages or vending devices so seized shall be subject to
11 confiscation and forfeiture as hereinafter provided.
12 (Source: P.A. 82-1009.)
13 (35 ILCS 130/18a) (from Ch. 120, par. 453.18a)
14 Sec. 18a. After seizing any original packages of
15 cigarettes, or cigarette vending devices, as provided in
16 Section 18 of this Act, the Department shall hold a hearing
17 and shall determine whether such original packages of
18 cigarettes, at the time of their seizure by the Department,
19 were not tax stamped or tax imprinted underneath the sealed
20 transparent wrapper of such original packages in accordance
21 with this Act, or whether such cigarette vending devices, at
22 the time of their seizure by the Department, contained
23 original packages of cigarettes not tax stamped or tax
24 imprinted underneath the sealed transparent wrapper of such
25 original packages as required by this Act. The Department
26 shall give not less than 7 days' notice of the time and place
27 of such hearing to the owner of such property if he is known,
28 and also to the person in whose possession the property so
29 taken was found, if such person is known and if such person
30 in possession is not the owner of said property. In case
31 neither the owner nor the person in possession of such
32 property is known, the Department shall cause publication of
33 the time and place of such hearing to be made at least once
-47- LRB093 06358 SJM 06477 b
1 in each week for 3 weeks successively in a newspaper of
2 general circulation in the county where such hearing is to be
3 held.
4 If, as the result of such hearing, the Department shall
5 determine that the original packages of cigarettes seized
6 were at the time of seizure not tax stamped or tax imprinted
7 underneath the sealed transparent wrapper of such original
8 packages as required by this Act, or that any cigarette
9 vending device at the time of its seizure contained original
10 packages of cigarettes not tax stamped or tax imprinted
11 underneath the sealed transparent wrapper of such original
12 packages as required by this Act, the Department shall enter
13 an order declaring such original packages of cigarettes or
14 such cigarette vending devices confiscated and forfeited to
15 the State, and to be held by the Department for disposal by
16 it as provided in Section 21 of this Act. The Department
17 shall give notice of such order to the owner of such property
18 if he is known, and also to the person in whose possession
19 the property so taken was found, if such person is known and
20 if such person in possession is not the owner of said
21 property. In case neither the owner nor the person in
22 possession of such property is known, the Department shall
23 cause publication of such order to be made at least once in
24 each week for 3 weeks successively in a newspaper of general
25 circulation in the county where such hearing was held.
26 (Source: P.A. 76-684.)
27 (35 ILCS 130/18b) (from Ch. 120, par. 453.18b)
28 Sec. 18b. Forfeiture of fixtures and equipment. All
29 fixtures and all other materials and personal property on the
30 premises of any distributor or retailer who, with intent to
31 defraud the State, fails to keep or make any record, return,
32 report, or inventory required by this Act, keeps or makes any
33 false or fraudulent record, return, report, or inventory
-48- LRB093 06358 SJM 06477 b
1 required by this Act, refuses to pay any tax imposed by this
2 Act, or attempts in any manner to evade or defeat the
3 requirements of this Act shall be forfeited to the State and
4 be held by the Department for disposal by it as provided in
5 Section 21 of this Act.With the exception of licensed
6 distributors, anyone possessing cigarettes contained in
7 original packages which are not tax stamped as required by
8 this Act, or which are improperly tax stamped, shall be
9 liable to pay, to the Department for deposit in the State
10 Treasury, a penalty of $15 for each such package of
11 cigarettes in excess of 100 packages. Such penalty may be
12 recovered by the Department in a civil action.
13 (Source: P.A. 83-1428.)
14 (35 ILCS 130/18c)
15 Sec. 18c. Failure to comply with Act; civil penalty.
16 Whoever omits, neglects, or refuses to comply with any duty
17 imposed upon him or her by this Act, or to do, or cause to be
18 done, any of the things required by this Act, or does
19 anything prohibited by this Act shall, in addition to any
20 other penalty provided in this Act, be liable to a penalty of
21 $1,000, or 5 times the retail value of the cigarettes
22 involved, whichever is greater, to be recovered, with costs
23 of suit, in a civil action.Possession of not less than 10
24 and not more than 100 original packages not tax stamped or
25 improperly tax stamped; penalty. With the exception of
26 licensed distributors, anyone possessing not less than 10 and
27 not more than 100 packages of cigarettes contained in
28 original packages that are not tax stamped as required by
29 this Act, or that are improperly tax stamped, is liable to
30 pay to the Department, for deposit into the Tax Compliance
31 and Administration Fund, a penalty of $10 for each such
32 package of cigarettes, unless reasonable cause can be
33 established by the person upon whom the penalty is imposed.
-49- LRB093 06358 SJM 06477 b
1 Reasonable cause shall be determined in each situation in
2 accordance with rules adopted by the Department.
3 (Source: P.A. 92-322, eff. 1-1-02.)
4 (35 ILCS 130/18d new)
5 Sec. 18d. Failure to pay tax; civil penalty. Whoever
6 fails to pay any tax imposed by this Act at the time
7 prescribed by law or rules shall, in addition to any other
8 penalty provided in this Act, be liable to a penalty of 5
9 times the tax due but unpaid.
10 (35 ILCS 130/20) (from Ch. 120, par. 453.20)
11 Sec. 20. Whenever any peace officer of the State or any
12 duly authorized officer or employee of the Department shall
13 have reason to believe that any violation of this Act has
14 occurred and that the person so violating the Act has in his,
15 her or its possession any original package of cigarettes, not
16 tax stamped or tax imprinted underneath the sealed
17 transparent wrapper of such original package as required by
18 this Act, or any vending device containing such original
19 packages to which stamps have not been affixed, or on which
20 an authorized substitute for stamps has not been imprinted
21 underneath the sealed transparent wrapper of such original
22 packages, as required by this Act, he may file or cause to be
23 filed his complaint in writing, verified by affidavit, with
24 any court within whose jurisdiction the premises to be
25 searched are situated, stating the facts upon which such
26 belief is founded, the premises to be searched, and the
27 property to be seized, and procure a search warrant and
28 execute the same. Upon the execution of such search warrant,
29 the peace officer, or officer or employee of the Department,
30 executing such search warrant shall make due return thereof
31 to the court issuing the same, together with an inventory of
32 the property taken thereunder. The court shall thereupon
-50- LRB093 06358 SJM 06477 b
1 issue process against the owner of such property if he is
2 known; otherwise, such process shall be issued against the
3 person in whose possession the property so taken is found, if
4 such person is known. In case of inability to serve such
5 process upon the owner or the person in possession of the
6 property at the time of its seizure, as hereinbefore
7 provided, notice of the proceedings before the court shall be
8 given as required by the statutes of the State governing
9 cases of Attachment. Upon the return of the process duly
10 served or upon the posting or publishing of notice made, as
11 hereinabove provided, the court or jury, if a jury shall be
12 demanded, shall proceed to determine whether or not such
13 property so seized was held or possessed in violation of this
14 Act, or whether, if a vending device has been so seized, it
15 contained at the time of its seizure original packages not
16 tax stamped or tax imprinted underneath the sealed
17 transparent wrapper of such original packages as required by
18 this Act. In case of a finding that the original packages
19 seized were not tax stamped or tax imprinted underneath the
20 sealed transparent wrapper of such original packages in
21 accordance with the provisions of this Act, or that any
22 vending device so seized contained at the time of its seizure
23 original packages not tax stamped or tax imprinted underneath
24 the sealed transparent wrapper of such original packages in
25 accordance with the provisions of this Act, judgment shall be
26 entered confiscating and forfeiting the property to the State
27 and ordering its delivery to the Department, and in addition
28 thereto, the court shall have power to tax and assess the
29 costs of the proceedings.
30 When any original packages or any cigarette vending
31 device shall have been declared forfeited to the State by any
32 court, as hereinbefore provided, and when such confiscated
33 and forfeited property shall have been delivered to the
34 Department, as provided in this Act, the said Department
-51- LRB093 06358 SJM 06477 b
1 shall sell such property for the best price obtainable and
2 shall forthwith pay over the proceeds of such sale to the
3 State Treasurer; provided, however, that if the value of such
4 property to be sold at any one time shall be $500 or more,
5 such property shall be sold only to the highest and best
6 bidder on such terms and conditions and on open competitive
7 bidding after public advertisement, in such manner and for
8 such terms as the Department, by rule, may prescribe.
9 Upon making such a sale of original packages of
10 cigarettes which were not tax stamped or tax imprinted
11 underneath the sealed transparent wrapper of such original
12 packages as required by this Act, the Department shall affix
13 a distinctive stamp to each of the original packages so sold
14 indicating that the same are sold pursuant to the provisions
15 of this Section.
16 (Source: Laws 1965, p. 3707.)
17 (35 ILCS 130/21) (from Ch. 120, par. 453.21)
18 Sec. 21. Destruction of forfeited cigarettes; sale of
19 forfeited vending devices or fixtures.
20 (a) All cigarettes forfeited to the State under this Act
21 shall be destroyed.
22 (a-5) When any fixtures or equipment orany original
23 packages of cigarettes or any cigarette vending device shall
24 have been declared forfeited to the State by the Department,
25 as provided in Section 18a of this Act, and when all
26 proceedings for the judicial review of the Department's
27 decision have terminated, the Department shall, to the
28 extent that its decision is sustained on review, sell such
29 property for the best price obtainable and shall forthwith
30 pay over the proceeds of such sale to the State Treasurer. If
31 the value of such property to be sold at any one time is $500
32 or more, however, such property shall be sold only to the
33 highest and best bidder on such terms and conditions and on
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1 open competitive bidding after public advertisement, in such
2 manner and for such terms as the Department, by rule, may
3 prescribe.
4 (b) If no complaint for review, as provided in Section 8
5 of this Act, has been filed within the time required by the
6 Administrative Review Law, and if no stay order has been
7 entered thereunder, the Department shall proceed to destroy
8 the forfeited cigarettes and to sell the other forfeited
9 property for the best price obtainable and shall forthwith
10 pay over the proceeds of such sale to the State Treasurer.
11 If the value of such property to be sold at any one time is
12 $500 or more, however, such property shall be sold only to
13 the highest and best bidder on such terms and conditions and
14 on open competitive bidding after public advertisement, in
15 such manner and for such terms as the Department, by rule,
16 may prescribe.
17 (c) Upon making a sale of unstamped original packages of
18 cigarettes as provided in this Section, the Department shall
19 affix a distinctive stamp to each of the original packages so
20 sold indicating that the same are sold under this Section.
21 (d) Notwithstanding the foregoing, any cigarettes seized
22 under this Act or under the Cigarette Use Tax Act may, at the
23 discretion of the Director of Revenue, be distributed to any
24 eleemosynary institution within the State of Illinois.
25 (Source: P.A. 82-783.)
26 (35 ILCS 130/22) (from Ch. 120, par. 453.22)
27 Sec. 22. Counterfeit cigarettes; counterfeiting or
28 forging stamps; punishment.
29 (a) Notwithstanding any other provision of law, the sale
30 or possession for sale of counterfeit cigarettes by a
31 manufacturer, importer, distributor, or retailer shall result
32 in the seizure of the product and related machinery by the
33 Department or any law enforcement agency and shall be
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1 punishable as follows:
2 (1) A first violation involving a total quantity of
3 less than 2 cartons of cigarettes shall be punishable by
4 a fine of $1,000 or 5 times the retail value of the
5 cigarettes involved, whichever is greater, or
6 imprisonment not to exceed 5 years, or both the fine and
7 imprisonment.
8 (2) A subsequent violation involving a total
9 quantity of less than 2 cartons of cigarettes shall be
10 punishable by a fine of $5,000 or 5 times the retail
11 value of the cigarettes involved, whichever is greater,
12 or imprisonment not to exceed 5 years, or both the fine
13 and the imprisonment, and shall also result in the
14 revocation by the Department of the manufacturer,
15 importer, distributor, or retailer license.
16 (3) A first violation involving a total quantity of
17 2 cartons of cigarettes or more shall be punishable by a
18 fine of $2,000 or 5 times the retail value of the
19 cigarettes involved, whichever is greater, or
20 imprisonment not to exceed 5 years, or both the fine and
21 imprisonment.
22 (4) A subsequent violation involving a quantity of 2
23 cartons of cigarettes or more shall be punishable by a
24 fine of $50,000 or 5 times the retail value of the
25 cigarettes involved, whichever is greater, or
26 imprisonment not to exceed 5 years, or both the fine and
27 imprisonment, and shall also result in the revocation by
28 the Department of the manufacturer, importer,
29 distributor, or retailer license.
30 For purposes of this Section, counterfeit cigarettes
31 includes cigarettes that have false manufacturing labels. Any
32 counterfeit cigarette seized by the Department shall be
33 destroyed.
34 (b) Any person who (1)(a) falsely or fraudulently
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1 makes, forges, alters or counterfeits any stamp provided for
2 herein, (2)(b) causes or procures to be falsely or
3 fraudulently made, forged, altered or counterfeited any such
4 stamp, ((3)(c) knowingly and wilfully utters, publishes,
5 passes or tenders as genuine any such false, altered, forged
6 or counterfeited stamp, (4)(d) falsely or fraudulently
7 makes, forges, alters or counterfeits any tax imprint on an
8 original package of cigarettes inside a sealed transparent
9 wrapper, (5)(e) causes or procures falsely or fraudulently
10 to be made, forged, altered or counterfeited any such tax
11 imprint or (6)(f) knowingly and wilfully utters, publishes,
12 passes or tenders as genuine any such false, altered, forged
13 or counterfeited tax imprint, for the purpose of evading the
14 tax imposed by this Act shall be guilty of a Class 2 felony.
15 (Source: P.A. 83-1428.)
16 (35 ILCS 130/23) (from Ch. 120, par. 453.23)
17 Sec. 23. Every distributor or other person who shall
18 knowingly and wilfully sell or offer for sale any original
19 package, as defined in this Act, having affixed thereto any
20 fraudulent, spurious, imitation or counterfeit stamp, or
21 stamp which has been previously affixed, or affixes a stamp
22 which has previously been affixed to an original package, or
23 who shall knowingly and wilfully sell or offer for sale any
24 original package, as defined in this Act, having imprinted
25 thereon underneath the sealed transparent wrapper thereof any
26 fraudulent, spurious, imitation or counterfeit tax imprint,
27 shall be deemed guilty of a Class 2 felony.
28 (Source: P.A. 83-1428.)
29 (35 ILCS 130/24) (from Ch. 120, par. 453.24)
30 Sec. 24. Punishment for sale or possession of unstamped
31 packages.
32 (a) Any person other than a licensed distributor who
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1 sells, offers for sale, or has in his possession with intent
2 to sell or offer for sale, more than 100 original packages,
3 not tax stamped or tax imprinted underneath the sealed
4 transparent wrapper of such original package in accordance
5 with this Act, shall be guilty of a Class 34 felony and, in
6 addition to any term of imprisonment, may be fined $10,000 or
7 5 times the retail value of the cigarettes involved,
8 whichever is greater.
9 (a-5) Any person other than a licensed distributor who
10 sells, offers for sale, or has in his possession with intent
11 to sell or offer for sale, 100 or fewer original packages,
12 not tax stamped or tax imprinted underneath the sealed
13 transparent wrapper of the original package in accordance
14 with this Act, is guilty of a Class A misdemeanor for the
15 first offense and a Class 34 felony for each subsequent
16 offense and, in addition to any term of imprisonment, may be
17 fined $10,000 or 5 times the retail value of the cigarettes
18 involved, whichever is greater.
19 (b) Any distributor who sells an original package of
20 cigarettes, not tax stamped or tax imprinted underneath the
21 sealed transparent wrapper of such original package in
22 accordance with this Act, except when the sale is made under
23 such circumstances that the tax imposed by this Act may not
24 legally be levied because of the Constitution or laws of the
25 United States, shall be guilty of a Class 3 felony and, in
26 addition to any term of imprisonment, may be fined $10,000 or
27 5 times the retail value of the cigarettes involved,
28 whichever is greater.
29 (Source: P.A. 92-322, eff. 1-1-02.)
30 (35 ILCS 130/25) (from Ch. 120, par. 453.25)
31 Sec. 25. Failure to make report; false report;
32 punishment. Any person, or any officer, agent or employee of
33 any person, required by this Act to make, file, render, sign
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1 or verify any report or return, who makes any false or
2 fraudulent report or files any false or fraudulent return, or
3 who shall fail to make such report or file such return when
4 due, shall be guilty of a Class 4 felony and, in addition to
5 any term of imprisonment, may be fined up to $10,000 or 5
6 times the retail value of the cigarettes involved, whichever
7 is greater.
8 (Source: P.A. 83-1428.)
9 (35 ILCS 130/31 new)
10 Sec. 31. Delivery sales of cigarettes.
11 (a) Definitions; requirements for delivery sales.
12 (1) For purposes of this Section, the terms listed
13 below have the following meanings:
14 (A) "Delivery sale" means any sale of
15 cigarettes to a consumer in Illinois where either:
16 (i) the purchaser submits the order for
17 the sale by means of a telephonic or other
18 method of voice transmission, the mails, or any
19 other delivery service, or the Internet or
20 other online service; or
21 (ii) the cigarettes are delivered by use
22 of the mails or other delivery service.
23 A sale of cigarettes that satisfies the
24 criteria in this subdivision (a)(1)(A) shall be a
25 delivery sale regardless of whether the seller is
26 located within or outside of this State. For
27 purposes of this subdivision (a)(1)(A), any sale of
28 cigarettes to an individual in this State shall be
29 treated as a sale to a consumer unless the
30 individual is licensed as a distributor or retailer
31 of cigarettes by the Department.
32 (B) "Delivery service" means any person
33 (including the U.S. Postal Service) that is engaged
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1 in the commercial delivery of letters, packages, or
2 other containers.
3 (C) "Minor" means any individual to whom the
4 sale of cigarettes is prohibited by the Sale of
5 Tobacco to Minors Act.
6 (D) "Shipping container" means a container in
7 which cigarettes are shipped in connection with a
8 delivery sale.
9 (E) "Shipping documents" means bills of
10 lading, airbills, U.S. Postal Service forms, or any
11 other documents used to evidence the undertaking by
12 a delivery service to deliver letters, packages, or
13 other containers.
14 (2) No person shall make a delivery sale of
15 cigarettes to any minor.
16 (3) Each person taking a delivery sale order shall
17 comply with:
18 (A) the age verification requirements set forth
19 in subsection (b) of this Section;
20 (B) the disclosure requirements set forth in
21 subsection (c) of this Section;
22 (C) the shipping requirements set forth
23 subsection (d) of this Section;
24 (D) the registration and reporting requirements
25 set forth in subsection (e) of this Section;
26 (E) the tax collection requirements set forth
27 in subsection (f) of this Section; and
28 (F) all other laws of this State generally
29 applicable to sales of cigarettes that occur
30 entirely within this State, including, but not
31 limited to, those laws imposing:
32 (i) excise taxes;
33 (ii)) sales taxes;
34 (iii) licensing and tax-stamping
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1 requirements; and
2 (iv) escrow or other payment obligations.
3 (b) Age verification requirements.
4 (1) No person shall mail or ship cigarettes in
5 connection with a delivery sale order unless, before
6 mailing or shipping the cigarettes, the person accepting
7 the delivery sale order first:
8 (A) obtains from the prospective customer a
9 certification that includes:
10 (i) reliable confirmation that the
11 purchaser is not a minor; and
12 (ii) a statement signed by the prospective
13 purchaser in writing and under penalty of
14 perjury that:
15 (aa) certifies the prospective
16 purchaser's address and date of birth; and
17 (bb) confirms that the prospective
18 purchaser understands that signing another
19 person's name to the certification is
20 illegal, and that the sale of cigarettes
21 to minors is illegal, and that the
22 purchase of cigarettes by minors is
23 illegal under the Sale of Tobacco to
24 Minors Act;
25 (B) makes a good-faith effort to verify the
26 information contained in the certification provided
27 by the prospective purchaser pursuant to subdivision
28 (b)(1)(A) against a federal database established for
29 that purpose if one exists, or a commercially
30 available database;
31 (C) sends to the prospective purchaser, via
32 e-mail or other means, a notice that meets the
33 requirements of subsection (c) of this Section and
34 requests confirmation that the delivery sale order
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1 was placed by the prospective purchaser;
2 (D) receives from the prospective purchaser
3 confirmation, pursuant to the request described in
4 subdivision (b)(1)(C), that the individual placed
5 the delivery sale order; and
6 (E) receives payment for the delivery sale from
7 the prospective purchaser by a credit or debit card
8 that has been issued in the purchaser's name.
9 (2) Persons taking delivery sale orders may request
10 that prospective purchasers provide their e-mail
11 addresses.
12 (c) Disclosure requirements. The notice required under
13 subdivision (b)(1)(C) of this Section shall include:
14 (1) a prominent and clearly legible statement that
15 cigarette sales to minors are illegal;
16 (2) a prominent and clearly legible statement that
17 consists of one of the warnings set forth in Section
18 4(a)(1) of the federal Cigarette Labeling and Advertising
19 Act (15 U.S.C. 1333(a)(1)) rotated on a quarterly basis;
20 (3) a prominent and clearly legible statement that
21 sales of cigarettes are restricted to those individuals
22 who provide verifiable proof of age in accordance with
23 subsection (b) of this Section; and
24 (4) a prominent and clearly legible statement that
25 cigarette sales are taxable under Section 2 and an
26 explanation of how the tax has been or is to be paid with
27 respect to the delivery sale.
28 (d) Shipping requirements.
29 (1) Each person who mails or ships cigarettes in
30 connection with a delivery sale order:
31 (A) shall include as part of the shipping
32 documents a clear and conspicuous statement
33 providing as follows: "CIGARETTES: ILLINOIS LAW
34 PROHIBITS SHIPPING TO INDIVIDUALS UNDER 18 AND
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1 REQUIRES THE PAYMENT OF ALL APPLICABLE TAXES";
2 (B) shall use a method of mailing or shipping
3 that obligates the delivery service to require:
4 (i) the purchaser placing the delivery
5 sale order, or an adult designated by the
6 purchaser to sign to accept delivery of the
7 shipping container; and
8 (ii) proof, in the form of a valid,
9 government-issued identification bearing a
10 photograph of the individual who signs to
11 accept delivery of the shipping container,
12 demonstrating that (a) the individual is either
13 the addressee or the adult designated by the
14 addressee and (b) the individual is not a
15 minor, but such proof shall be required only if
16 that individual appears to be under 27 years of
17 age; and
18 (C) shall provide to the delivery service
19 retained to deliver the delivery sale evidence of
20 full compliance with subsection (e) of this Section.
21 (2) A delivery service (including the U.S. Postal
22 Service) shall be in violation of this Act if it ships or
23 delivers cigarettes in connection with a delivery sale
24 without first receiving the evidence of compliance with
25 subsection (e) of this Section that is described in
26 subdivision (d)(1)(C) or if it fails to comply with the
27 requirements described in subdivision (d)(1)(B) or
28 subsection (e) of this Section:
29 (A) when obligated to do so under a method of
30 shipping;
31 (B) when delivering any container pursuant to
32 shipping documents containing the statement
33 described in subdivision (d)(1)(A); or
34 (C) when delivering any container that the
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1 delivery service otherwise has reason to know
2 contains cigarettes.
3 (3) If the person taking a delivery sale order
4 delivers the cigarettes without using a third-party
5 delivery service, that person shall comply with all
6 requirements of this Act applicable to a delivery service
7 and shall be in violation of this Act if it fails to
8 comply with any applicable requirement.
9 (e) Registration and reporting requirements.
10 (1) Registration requirement. Prior to making
11 delivery sales or shipping cigarettes in connection with
12 any delivery sales, every person shall file with the
13 Department a statement setting forth the person's name,
14 trade name, and the address of the person's principal
15 place of business and any other place of business.
16 (2) Reporting requirement. Not later than the 10th
17 day of each calendar month, each person that has made a
18 delivery sale or shipped or delivered cigarettes in
19 connection with any delivery sale during the previous
20 calendar month shall file with the Department a
21 memorandum or a copy of the invoice that provides for
22 each and every delivery sale:
23 (A) the name and address of the individual to
24 whom the delivery sale was made;
25 (B) the brand or brands of the cigarettes that
26 were sold in the delivery sale; and
27 (C) the quantity of cigarettes that were sold
28 in the delivery sale.
29 (f) Collection of taxes. No person shall make a delivery
30 sale of any cigarettes, the packages of which do not bear any
31 tax stamp required by this Act.
32 (g) Penalties.
33 (1) In general.
34 (A) First offenses. Except as otherwise
-62- LRB093 06358 SJM 06477 b
1 provided in this Section, the first time a person
2 violates any provision of this Section, the person
3 shall be fined $1,000 or 5 times the retail value of
4 the cigarettes involved, whichever is greater.
5 (B) Subsequent offenses. In the case of a
6 second or subsequent violation of this Section, the
7 person shall be fined $5,000 or 5 times the retail
8 value of the cigarettes involved, whichever is
9 greater.
10 (2) Knowing offenses by persons. Any person who
11 knowingly violates any provision of this Section or who
12 knowingly and falsely submits a certification under
13 subdivision (b)(1)(A) in another person's name shall, for
14 each offense, be fined $10,000 or 5 times the retail
15 value of the cigarettes involved, whichever is greater,
16 imprisoned not more than 5 years, or both the fine and
17 imprisonment.
18 (3) Failure to pay tax. Whoever fails to pay any tax
19 required in connection with a delivery sale shall pay, in
20 addition to any other penalty, a penalty of 5 times the
21 amount of the tax due but unpaid.
22 (4) Forfeiture.
23 (A) Any cigarettes sold or attempted to be sold
24 in a delivery sale that do not meet the requirements
25 of this Section shall be forfeited to this State and
26 destroyed.
27 (B) All fixtures, equipment, and all other
28 materials and personal property on the premises of
29 any person who, with the intent to defraud this
30 State, fails to satisfy any of the requirements of
31 this Section shall be forfeited to this State.
32 (h) Enforcement. The Attorney General, his or her
33 designee, or any person who holds a permit under section 5712
34 of title 26 of the United States Code may bring an action in
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1 the appropriate court in this State to prevent or restrain
2 violations of this Section by any person (or any person
3 controlling that person).
4 (35 ILCS 130/32 new)
5 Sec. 32. Compliance with Tobacco Products Manufacturers'
6 Escrow Act.
7 (a) Definitions. For the purposes of this Section:
8 "Brand family" means all styles of cigarettes sold under
9 the same trademark and differentiated from one another by
10 means of additional modifiers or descriptors, including, but
11 not limited to, "menthol", "lights", "kings", and "100s" and
12 includes any brand name (alone or in conjunction with any
13 other word), trademark, logo, symbol, motto, selling message,
14 recognizable pattern of colors, or any other indicia of
15 product identification identical or similar to or
16 identifiable with a previously known brand of cigarettes.
17 "Non-participating manufacturer" means any tobacco
18 product manufacturer that is not a participating
19 manufacturer.
20 "Participating manufacturer" has the meaning given that
21 term in Section II(jj) of the Master Settlement Agreement and
22 all amendments thereto.
23 "Qualified escrow fund" has the same meaning as that term
24 is defined in Section 10 of the Tobacco Products
25 Manufacturers' Escrow Act.
26 "Tobacco product manufacturer" has the same meaning as
27 that term is defined in Section 10 of the Tobacco Products
28 Manufacturers' Escrow Act.
29 "Units Sold" has the same meaning as that term is defined
30 in Section 10 of the Tobacco Products Manufacturers' Escrow
31 Act.
32 (b) Certifications, directory; tax stamps.
33 (1) Certification. Every tobacco product
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1 manufacturer whose cigarettes are sold in this State,
2 whether directly or through a distributor, retailer, or
3 similar intermediary or intermediaries, shall execute and
4 deliver on a form prescribed by the Attorney General a
5 certification to the Department and Attorney General no
6 later than the 30th day of April each year certifying
7 under penalty of perjury that, as of the date of the
8 certification, the tobacco product manufacturer either:
9 is a participating manufacturer; or is in full compliance
10 with subdivision (a)(2) of Section 15 of the Tobacco
11 Products Manufacturers' Escrow Act, including all
12 quarterly installment payments required by that
13 subdivision.
14 (A) A participating manufacturer shall include
15 in its certification a list of its brand families.
16 The participating manufacturer shall update the list
17 30 days prior to any addition to or modification of
18 its brand families by executing and delivering a
19 supplemental certification to the Attorney General.
20 (B) A non-participating manufacturer shall
21 include in its certification a complete list of all
22 of its brand families (i) separately listing brand
23 families of cigarettes and the number of units sold
24 for each brand family that were sold in the State
25 during the preceding calendar year, (ii) all of its
26 brand families that have been sold in the State at
27 any time during the current calendar year, (iii)
28 indicating by an asterisk any brand family sold in
29 the State during the preceding calendar year that is
30 no longer being sold in the State as of the date of
31 certification, and (iv) identifying by name and
32 address any other manufacturer of those brand
33 families in the preceding calendar year. The
34 non-participating manufacturer shall update the list
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1 30 days prior to any addition or modification of its
2 brand families by executing and delivering a
3 supplemental certification to the Attorney General.
4 (C) In the case of a non-participating
5 manufacturer, the certification shall further
6 certify:
7 (i) That the non-participating
8 manufacturer is registered to do business in
9 the State or has appointed a resident agent for
10 service of process and provided notice thereof
11 as required by subsection (c).
12 (ii) That the non-participating
13 manufacturer has established and continues to
14 maintain a qualified escrow fund and has
15 executed a qualified escrow agreement that has
16 been reviewed and approved by the Attorney
17 General and that governs the qualified escrow
18 fund.
19 (iii) That the non-participating
20 manufacturer is in full compliance with
21 subdivision (a)(2) of Section 15 of the Tobacco
22 Products Manufacturers' Escrow Act and with
23 this Section and any rules adopted pursuant
24 thereto;
25 (iv) (aa) the name, address, and
26 telephone number of the financial institution
27 where the non-participating manufacturer has
28 established the qualified escrow fund; (bb) the
29 account number of the qualified escrow fund and
30 sub-account number for this State; (cc) the
31 amount the non-participating manufacturer
32 placed in the fund for cigarettes sold in this
33 State during the preceding calendar year, the
34 date or dates and amount of each deposit, and
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1 such evidence or verification as may be deemed
2 necessary by the Attorney General to confirm
3 the foregoing; and (dd) the amounts of and
4 dates of any withdrawal or transfer of funds
5 the non-participating manufacturer made at any
6 time from the fund or from any other qualified
7 escrow fund into which it ever made escrow
8 payments pursuant to subdivision (a)(2) of
9 Section 15 of the Tobacco Products
10 Manufacturers' Escrow Act and all rules adopted
11 thereto.
12 (D) A tobacco product manufacturer may not
13 include a brand family in its certification unless
14 (i) in the case of a participating manufacturer, the
15 participating manufacturer affirms that the brand
16 family is to be deemed to be its cigarettes for
17 purposes of calculating its payments under the
18 Master Settlement Agreement for the relevant year in
19 the volume and shares determined pursuant to the
20 Master Settlement Agreement and (ii) in the case of
21 a non-participating manufacturer, the
22 non-participating manufacturer affirms that the
23 brand family is to be deemed to be its cigarettes
24 for purposes of Section 15 of the Tobacco Products
25 Manufacturers' Escrow Act. Nothing in this Section
26 shall be construed as limiting or otherwise
27 affecting the State's right to maintain that a brand
28 family constitutes cigarettes of a different tobacco
29 product manufacturer for purposes of calculating
30 payments under the Master Settlement Agreement or
31 for purposes of Section 15 of the Tobacco Products
32 Manufacturers' Escrow Act.
33 (E) The tobacco product manufacturers shall
34 maintain all invoices and documentation of sales and
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1 other such information relied upon for certification
2 for a period of 5 years, unless otherwise required
3 by law to maintain them for a greater period of
4 time.
5 (2) Directory of cigarettes approved for stamping
6 and sale. Not later than January 1, 2005, the Attorney
7 General shall develop and make available for public
8 inspection a directory listing all tobacco product
9 manufacturers that have provided current and accurate
10 certifications conforming to the requirements of
11 subdivision (b)(1) and all brand families that are listed
12 in the certifications (the "Directory"), except as noted
13 below.
14 (A) The Attorney General shall not include or
15 retain in the Directory the name or brand families
16 of any non-participating manufacturer that fails to
17 provide the required certification or whose
18 certification the Attorney General determines is not
19 in compliance with subdivisions (b)(1)(B) and
20 (b)(1)(C), unless the Attorney General has
21 determined that the violation has been cured to the
22 satisfaction of the Attorney General.
23 (B) Neither a tobacco product manufacturer nor
24 brand family shall be included or retained in the
25 Directory if the Attorney General concludes that (i)
26 in the case of a non-participating manufacturer all
27 escrow payments required under subdivision (a)(2) of
28 Section 15 of the Tobacco Products Manufacturers'
29 Escrow Act for any period for any brand family,
30 whether or not listed by the non-participating
31 manufacturer, have not been fully paid into a
32 qualified escrow fund governed by a qualified escrow
33 agreement that has been approved by the Attorney
34 General, or (ii) all outstanding final judgments,
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1 including interest thereon, for violations of
2 Section 15 of the Tobacco Products Manufacturers'
3 Escrow Act have not been fully satisfied for the
4 brand family and the manufacturer.
5 (C) The Attorney General shall update the
6 Directory as necessary in order to correct mistakes
7 and to add or remove a tobacco product manufacturer
8 or brand families to keep the Directory in
9 conformity with the requirements of this Act.
10 (D) Every distributor shall provide and update
11 as necessary an electronic mail address to the
12 Attorney General for the purpose of receiving any
13 notifications as may be required by this Act.
14 (3) Notice and review of determination. A
15 determination of the Attorney General to not list or to
16 remove from the Directory a brand family or tobacco
17 product manufacturer shall be subject to review in the
18 manner prescribed by the Administrative Review Law and
19 all amendments and modifications thereof and the rules
20 adopted pursuant thereto.
21 (4) A distributor shall not affix or cause to be
22 affixed any stamp or imprint to a package of cigarettes
23 of a brand family or the tobacco product manufacturer, as
24 defined in Section 10 of the Tobacco Product
25 Manufacturers' Escrow Act, that is not included in the
26 Directory published by the Attorney General.
27 (5) No person shall be issued a distributor's
28 license or granted a renewal of a distributor's license
29 unless the person has certified in writing under penalty
30 of perjury that the person will fully comply with this
31 Section.
32 (c) Agent for service of process.
33 (1) Any non-resident or foreign non-participating
34 manufacturer that has not registered to do business in
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1 the State as a foreign corporation or business entity
2 shall, as a condition precedent to having its brand
3 families listed or retained in the Directory, appoint and
4 continually engage without interruption the services of
5 an agent in this State to act as agent for the service of
6 process on whom all process, and any action or proceeding
7 against it concerning or arising out of the enforcement
8 of the Act and the Tobacco Product Manufacturers' Escrow
9 Act may be served in any manner authorized by law. The
10 service shall constitute legal and valid service of
11 process on the non-participating manufacturer. The
12 non-participating manufacturer shall provide the name,
13 address, phone number, and proof of the appointment and
14 availability of the agent to and to the satisfaction of
15 the Department and Attorney General.
16 (2) The non-participating manufacturer shall provide
17 notice to the Department and Attorney General 30 calendar
18 days prior to termination of the authority of an agent
19 and shall further provide proof to the satisfaction of
20 the Attorney General of the appointment of a new agent no
21 less than 5 calendar days prior to the termination of an
22 existing agent appointment. In the event an agent
23 terminates an agency appointment, the non-participating
24 manufacturer shall notify the Department and Attorney
25 General of the termination within 5 calendar days and
26 shall include proof to the satisfaction of the Attorney
27 General of the appointment of a new agent.
28 (3) Any non-participating manufacturer whose
29 products are sold in this State without the manufacturer
30 appointing or designating an agent as required in this
31 subsection (c) shall be deemed to have appointed the
32 Secretary of State as its agent and may be proceeded
33 against in courts of this State by service of process
34 upon the Secretary of State; however, the appointment of
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1 the Secretary of State as an agent shall not satisfy the
2 condition precedent to having its brand families listed
3 or retained in the Directory.
4 (d) Reporting of information; escrow installments.
5 (1) Not later than 20 days after the end of each
6 calendar quarter, and more frequently if so directed by
7 the Department, each distributor shall submit such
8 information as the Department requires to facilitate
9 compliance with this Section, including, but not limited
10 to, a list by brand family of the total number of
11 cigarettes or, in the case of roll-your-own, the
12 equivalent stick count for which the distributor affixed
13 stamps during the previous calendar quarter or otherwise
14 paid the tax due for the cigarettes. The distributor
15 shall maintain and make available to the Department all
16 invoices and documentation of sales of all
17 non-participating manufacturer cigarettes and any other
18 information relied upon in reporting to the Department
19 for a period of 5 years.
20 (2) The Department is authorized to disclose to the
21 Attorney General any information received under this Act
22 and requested by the Attorney General for purposes of
23 determining compliance with and enforcing the provisions
24 of this Act. The Department and Attorney General shall
25 share with each other the information received under this
26 Act and may share this information with other federal,
27 state, or local agencies only for purposes of enforcement
28 of this Act, the Tobacco Product Manufacturers' Escrow
29 Act, or corresponding laws of other states.
30 (3) In addition to the information required to be
31 submitted pursuant to subdivision (d)(1), the Attorney
32 General may require a distributor or tobacco product
33 manufacturer to submit any additional information
34 including, but not limited to, samples of the packaging
-71- LRB093 06358 SJM 06477 b
1 or labeling of each brand family, as is necessary to
2 enable the Attorney General to determine whether a
3 tobacco product manufacturer is in compliance with the
4 Tobacco Manufacturers' Escrow Act.
5 (4) To promote compliance with the provisions of
6 this Act, the Attorney General may adopt rules requiring
7 a tobacco product manufacturer subject to the
8 requirements of the Tobacco Products Manufacturers'
9 Escrow Act to make the escrow deposits required in
10 quarterly installments during the year in which the sales
11 covered by the deposits are made. The Attorney General
12 may require production of information sufficient to
13 enable the Attorney General to determine the adequacy of
14 the amount of the installment deposit.
15 (e) Penalties and other remedies.
16 (1) In addition to or instead of any other civil or
17 criminal remedy provided by law, upon a determination
18 that a distributor has violated subdivision (b)(4) or any
19 rule adopted pursuant thereto, the Department may revoke
20 or suspend the license of any distributor in the manner
21 provided by Section 6. Each stamp affixed and each offer
22 to sell cigarettes in violation of subdivision (b)(4)
23 shall constitute a separate violation. For each
24 violation, the Department may also impose a civil penalty
25 in an amount not to exceed the greater of 500% of the
26 retail value of the cigarettes sold or $5,000 upon a
27 determination of violation of subdivision (b)(4) or any
28 rules adopted pursuant thereto.
29 (2) Contraband and seizure. Any cigarettes that have
30 been sold, offered for sale, possessed for sale in this
31 State, or imported for personal consumption in violation
32 of subdivision (b)(4) shall be deemed contraband under
33 this Act and are subject to seizure and forfeiture as
34 provided in this Act, and all such cigarettes seized and
-72- LRB093 06358 SJM 06477 b
1 forfeited shall be destroyed. The cigarettes shall be
2 deemed contraband whether the violation of this Section
3 is knowing or otherwise.
4 (3) Injunction. The Attorney General, on behalf of
5 the Department, may seek an injunction to restrain a
6 threatened or actual violation of subdivisions (b)(4),
7 (d)(1), or (d)(3) by a distributor and to compel the
8 distributor to comply with those subdivisions. In any
9 action brought pursuant to this subdivision (e)(3), the
10 State shall be entitled to recover the costs of
11 investigation, costs of the action, and reasonable
12 attorney fees.
13 (4) Unlawful sale and distribution. It shall be
14 unlawful for a person to (i) sell or distribute
15 cigarettes or (ii) acquire, hold, own, possess,
16 transport, import, or cause to be imported, cigarettes
17 that the person knows or should know are intended for
18 distribution or sale in the State in violation of
19 subsection (b). A violation of this subdivision (e)(4)
20 shall be a Class C misdemeanor.
21 (5) Unfair trade practices. A person who violates
22 subdivision (b)(4) engages in an unlawful practice as
23 provided in the Consumer Fraud and Deceptive Business
24 Practices Act.
25 (f) Miscellaneous provisions.
26 (1) Dates. For the year 2003, if the effective date
27 of this amendatory Act of the 93rd General Assembly is
28 later than March 16, 2003, the first report of stamping
29 agents required by subdivision (d)(1) shall be due 30
30 days after the effective date of this amendatory Act of
31 the 93rd General Assembly; the certifications by a
32 tobacco product manufacturer described in subdivision
33 (b)(1) shall be due 45 days after the effective date of
34 this amendatory Act of the 93rd General Assembly; and the
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1 Directory described in subdivision (b)(2) shall be
2 published or made available not later than January 1,
3 2005.
4 (2) Adoption of rules. The Attorney General may
5 adopt rules necessary to effect the purposes of this Act.
6 (3) Recovery of costs and fees by Attorney General.
7 In any action brought by the State to enforce this Act,
8 the State shall be entitled to recover the costs of
9 investigation, expert witness fees, costs of the action,
10 and reasonable attorney fees.
11 (4) Disgorgement of profits for violations of Act.
12 If a court determines that a person has violated this
13 Act, the court shall order any profits, gain, gross
14 receipts, or other benefits from the violation to be
15 disgorged and paid to the State Treasurer for deposit
16 into the Tobacco Settlement Recovery Fund. Unless
17 otherwise expressly provided, the remedies or penalties
18 provided by this Act are cumulative to each other and to
19 the remedies or penalties available under all other laws
20 of this State.
21 (5) Construction and severability. If a court of
22 competent jurisdiction finds that the provisions of this
23 Act and of the Tobacco Products Manufacturers' Escrow Act
24 conflict and cannot be harmonized, then the provisions of
25 the Tobacco Products Manufacturers' Escrow Act shall
26 control. If any Section, subsection, subdivision,
27 paragraph, sentence, clause, or phrase of this Act causes
28 the Tobacco Products Manufacturers' Escrow Act to no
29 longer constitute a qualifying or model statute, as those
30 terms are defined in the Master Settlement Agreement,
31 then that portion of this Act shall not be valid. If any
32 Section, subsection, subdivision, paragraph, sentence,
33 clause, or phrase of this Act is for any reason held to
34 be invalid, unlawful, or unconstitutional, that decision
-74- LRB093 06358 SJM 06477 b
1 shall not affect the validity of the remaining portions
2 of this Act or any part thereof. If any provision of this
3 Section or the application of any provision of this
4 Section to any person or circumstance is held to be
5 invalid, the remainder of this Section and the
6 application of the provisions of this Section to any
7 other person or circumstance shall not be affected
8 thereby and shall continue to be enforced to the fullest
9 extent possible.
10 (35 ILCS 130/9b rep.)
11 (35 ILCS 130/28 rep.)
12 (35 ILCS 130/30 rep.)
13 Section 10. The Cigarette Tax Act is amended by repealing
14 Sections 9b, 28, and 30.
15 (35 ILCS 135/Act rep.)
16 Section 15. The Cigarette Use Tax Act is repealed.
17 Section 99. Effective date. This Act takes effect 90
18 days after becoming law.
-75- LRB093 06358 SJM 06477 b
1 INDEX
2 Statutes amended in order of appearance
3 35 ILCS 130/0.01 new
4 35 ILCS 130/1 from Ch. 120, par. 453.1
5 35 ILCS 130/2 from Ch. 120, par. 453.2
6 35 ILCS 130/3 from Ch. 120, par. 453.3
7 35 ILCS 130/4 from Ch. 120, par. 453.4
8 35 ILCS 130/4a from Ch. 120, par. 453.4a
9 35 ILCS 130/4b from Ch. 120, par. 453.4b
10 35 ILCS 130/5 from Ch. 120, par. 453.5
11 35 ILCS 130/6 from Ch. 120, par. 453.6
12 35 ILCS 130/7 from Ch. 120, par. 453.7
13 35 ILCS 130/9 from Ch. 120, par. 453.9
14 35 ILCS 130/9a from Ch. 120, par. 453.9a
15 35 ILCS 130/9c from Ch. 120, par. 453.9c
16 35 ILCS 130/9d from Ch. 120, par. 453.9d
17 35 ILCS 130/10b from Ch. 120, par. 453.10b
18 35 ILCS 130/11 from Ch. 120, par. 453.11
19 35 ILCS 130/13 from Ch. 120, par. 453.13
20 35 ILCS 130/13a new
21 35 ILCS 130/14 from Ch. 120, par. 453.14
22 35 ILCS 130/15 from Ch. 120, par. 453.15
23 35 ILCS 130/15a new
24 35 ILCS 130/15b new
25 35 ILCS 130/18 from Ch. 120, par. 453.18
26 35 ILCS 130/18a from Ch. 120, par. 453.18a
27 35 ILCS 130/18b from Ch. 120, par. 453.18b
28 35 ILCS 130/18c
29 35 ILCS 130/18d new
30 35 ILCS 130/20 from Ch. 120, par. 453.20
31 35 ILCS 130/21 from Ch. 120, par. 453.21
32 35 ILCS 130/22 from Ch. 120, par. 453.22
33 35 ILCS 130/23 from Ch. 120, par. 453.23
34 35 ILCS 130/24 from Ch. 120, par. 453.24
-76- LRB093 06358 SJM 06477 b
1 35 ILCS 130/25 from Ch. 120, par. 453.25
2 35 ILCS 130/31 new
3 35 ILCS 130/32 new
4 35 ILCS 130/9b rep.
5 35 ILCS 130/28 rep.
6 35 ILCS 130/30 rep.
7 35 ILCS 135/Act rep.
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