SB2552eng 93RD GENERAL ASSEMBLY

SB2552 Engrossed LRB093 18067 SJM 43754 b

AN ACT concerning taxes.

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

Section 5. The Cigarette Tax Act is amended by adding Section 2a as follows:

(35 ILCS 130/2a new)

Sec. 2a. Nonparticipating-manufacturer equity assessment.

(a) As used in this Section, "nonparticipating manufacturer" has the same meaning as that term is defined in Section 10 of the Tobacco Product Manufacturers' Escrow Enforcement Act of 2003.

(b) An equity assessment, in the amount of 25 mills per cigarette, is imposed on each package of nonparticipating-manufacturer cigarettes to which a person affixes a stamp or imprint as required under existing law. This equity assessment is in addition to all other assessments, fees, and taxes levied or imposed under existing law. The Department shall collect the equity assessment each month directly from each nonparticipating manufacturer based on information received by the Department under subsections (d) and (e) of this Section.

(c) The purposes of this assessment are:

(1) to prevent nonparticipating manufacturers from undermining the State's policy of reducing underage smoking by offering their cigarettes for sale substantially below the price of cigarettes of other manufacturers;

(2) to protect funding, which is reduced as a result of the growth of nonparticipating-manufacturer cigarette sales, for programs funded in whole or in part by payments to the State under the Master Settlement Agreement, as defined in Section 10 of the Tobacco Product Manufacturers' Escrow Act, and to recoup settlement-payment revenue lost to the State as a result of nonparticipating-manufacturer cigarette sales;

(3) notwithstanding Section 2, to fund enforcement and administration of the Tobacco Product Manufacturers' Escrow Act, the Tobacco Product Manufacturers' Escrow Enforcement Act of 2003, and this assessment, including reasonable administrative costs incurred by persons subject to subsection (e) of this Section by reason of the requirements of that subsection; and

(4) to fund such other purposes as the General Assembly shall determine.

(d) A nonparticipating manufacturer whose cigarettes are being offered for sale in this State on the effective date of this amendatory Act of the 93rd General Assembly shall pay the assessment imposed by this Section within 30 days after the effective date of this amendatory Act of the 93rd General Assembly. If cigarettes of a nonparticipating manufacturer are not being offered for sale in this State on the effective date of this amendatory Act of the 93rd General Assembly, then the nonparticipating manufacturer, before its cigarettes may begin to be offered for sale in this State, shall prepay the fee imposed by this Section for the number of cigarettes of the nonparticipating manufacturer that the Department reasonably projects will be sold in the first calendar month in which cigarettes of the nonparticipating manufacturer are sold in this State. The prepayment amount shall be (i) determined by multiplying 25 mills times the number of cigarettes that the Department reasonably projects that the nonparticipating manufacturer will sell in this State in that first calendar month or (ii) $50,000, whichever is more. The Department may require a nonparticipating manufacturer to provide any information reasonably necessary to determine the assessment payment amount and, in the case of prepayment, shall establish procedures providing for reimbursement to nonparticipating manufacturers if actual sales are less than sales as projected by the Department and for additional payment by nonparticipating manufacturers if actual sales are greater than sales as projected by the Department.

(e) Each person required to report to the Department under Section 9 shall State in that report the number and denominations of stamps or imprints affixed to individual packages of nonparticipating-manufacturer cigarettes, by manufacturer and brand family, sold by the person for each place of business in the previous month. The reporting requirement imposed by this subsection shall be enforced in the same manner as the reporting requirements in Section 9.

(f) A person shall not affix, or cause to be affixed, to any package of cigarettes of a nonparticipating manufacturer, the stamp or imprints required under existing law after receiving notice from the Department, which the Department shall provide, that the nonparticipating manufacturer has not paid in full the equity assessment imposed by this Section. A person that has affixed the stamp or imprint required under existing law to any package of cigarettes of a nonparticipating manufacturer in violation of this subsection shall be subject to the penalties provided in Section 24.

(g) Cigarettes of a nonparticipating manufacturer that has not paid the equity assessment imposed by this Section shall be treated as cigarettes of a nonparticipating manufacturer that has not provided the certification required by Section 15 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 and shall be treated as unstamped packages of cigarettes.

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