Illinois General Assembly - Full Text of SB3141
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Full Text of SB3141  100th General Assembly

SB3141ham001 100TH GENERAL ASSEMBLY

Rep. Michael J. Zalewski

Filed: 5/22/2018

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 3141

2    AMENDMENT NO. ______. Amend Senate Bill 3141 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Use Tax Act is amended by changing Section
511 as follows:
 
6    (35 ILCS 105/11)  (from Ch. 120, par. 439.11)
7    Sec. 11. Every retailer required or authorized to collect
8taxes hereunder and every person using in this State tangible
9personal property purchased at retail from a retailer on or
10after the effective date hereof shall keep such records,
11receipts, invoices and other pertinent books, documents,
12memoranda and papers as the Department shall require, in such
13form as the Department shall require. The Department may adopt
14rules that establish requirements, including record forms and
15formats, for records required to be kept and maintained by
16taxpayers. For purposes of this Section, "records" means all

 

 

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1data maintained by the taxpayer, including data on paper,
2microfilm, microfiche or any type of machine-sensible data
3compilation. For the purpose of administering and enforcing the
4provisions hereof, the Department, or any officer or employee
5of the Department designated, in writing, by the Director
6thereof, may hold investigations and hearings concerning any
7matters covered herein and may examine any books, papers,
8records, documents or memoranda of any retailer or purchaser
9bearing upon the sales or purchases of tangible personal
10property, the privilege of using which is taxed hereunder, and
11may require the attendance of such person or any officer or
12employee of such person, or of any person having knowledge of
13the facts, and may take testimony and require proof for its
14information.
15    Any person who fails to keep books and records or fails to
16produce books and records for examination, as required by this
17Section and the rules adopted by the Department, is liable to
18pay to the Department, for deposit into the Tax Compliance and
19Administration Fund, a penalty of $1,000 for the first failure
20to keep books and records or produce books and records for
21examination and a penalty of $3,000 for each subsequent failure
22to keep books and records or produce books and records for
23examination as required by this Section and the rules adopted
24by the Department. The penalties imposed under this Section
25shall not apply if the taxpayer shows that he or she acted with
26ordinary business care and prudence. The Department may adopt

 

 

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

 

 

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1attendance of such person or any officer or employee of such
2person, or of any person having knowledge of the facts, and may
3take testimony and require proof for its information.
4    Any person who fails to keep books and records or fails to
5produce books and records for examination, as required by this
6Section and the rules adopted by the Department, is liable to
7pay to the Department, for deposit into the Tax Compliance and
8Administration Fund, a penalty of $1,000 for the first failure
9to keep books and records or produce books and records for
10examination and a penalty of $3,000 for each subsequent failure
11to keep books and records or produce books and records for
12examination as required by this Section and the rules adopted
13by the Department. The penalties imposed under this Section
14shall not apply if the taxpayer shows that he or she acted with
15ordinary business care and prudence. The Department may adopt
16rules to administer the penalties under this Section.
17(Source: P.A. 97-1129, eff. 8-28-12.)
 
18    Section 15. The Service Occupation Tax Act is amended by
19changing Section 11 as follows:
 
20    (35 ILCS 115/11)  (from Ch. 120, par. 439.111)
21    Sec. 11. Every supplier required or authorized to collect
22taxes hereunder and every serviceman making sales of service in
23this State on or after the effective date hereof shall keep
24such records, receipts, invoices and other pertinent books,

 

 

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1documents, memoranda and papers as the Department shall
2require, in such form as the Department shall require. The
3Department may adopt rules that establish requirements,
4including record forms and formats, for records required to be
5kept and maintained by taxpayers. For purposes of this Section,
6"records" means all data maintained by the taxpayer, including
7data on paper, microfilm, microfiche or any type of
8machine-sensible data compilation. For the purpose of
9administering and enforcing the provisions hereof, the
10Department, or any officer or employee of the Department
11designated, in writing, by the Director thereof, may hold
12investigations and hearings not otherwise delegated to the
13Illinois Independent Tax Tribunal concerning any matters
14covered herein and may examine any books, papers, records,
15documents or memoranda of any supplier or serviceman bearing
16upon the sales of services or the sales of tangible personal
17property to servicemen, and may require the attendance of such
18person or any officer or employee of such person, or of any
19person having knowledge of the facts, and may take testimony
20and require proof for its information.
21    Any person who fails to keep books and records or fails to
22produce books and records for examination, as required by this
23Section and the rules adopted by the Department, is liable to
24pay to the Department, for deposit into the Tax Compliance and
25Administration Fund, a penalty of $1,000 for the first failure
26to keep books and records or produce books and records for

 

 

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1examination and a penalty of $3,000 for each subsequent failure
2to keep books and records or produce books and records for
3examination as required by this Section and the rules adopted
4by the Department. The penalties imposed under this Section
5shall not apply if the taxpayer shows that he or she acted with
6ordinary business care and prudence. The Department may adopt
7rules to administer the penalties under this Section.
8(Source: P.A. 97-1129, eff. 8-28-12.)
 
9    Section 20. The Retailers' Occupation Tax Act is amended by
10changing Section 7 as follows:
 
11    (35 ILCS 120/7)  (from Ch. 120, par. 446)
12    Sec. 7. Every person engaged in the business of selling
13tangible personal property at retail in this State shall keep
14records and books of all sales of tangible personal property,
15together with invoices, bills of lading, sales records, copies
16of bills of sale, inventories prepared as of December 31 of
17each year or otherwise annually as has been the custom in the
18specific trade and other pertinent papers and documents. Every
19person who is engaged in the business of selling tangible
20personal property at retail in this State and who, in
21connection with such business, also engages in other activities
22(including, but not limited to, engaging in a service
23occupation) shall keep such additional records and books of all
24such activities as will accurately reflect the character and

 

 

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1scope of such activities and the amount of receipts realized
2therefrom. The Department may adopt rules that establish
3requirements, including record forms and formats, for records
4required to be kept and maintained by taxpayers. For purposes
5of this Section, "records" means all data maintained by the
6taxpayer, including data on paper, microfilm, microfiche or any
7type of machine-sensible data compilation.
8    All books and records and other papers and documents which
9are required by this Act to be kept shall be kept in the
10English language and shall, at all times during business hours
11of the day, be subject to inspection by the Department or its
12duly authorized agents and employees.
13    To support deductions made on the tax return form, or
14authorized under this Act, on account of receipts from isolated
15or occasional sales of tangible personal property, on account
16of receipts from sales of tangible personal property for
17resale, on account of receipts from sales to governmental
18bodies or other exempted types of purchasers, on account of
19receipts from sales of tangible personal property in interstate
20commerce, and on account of receipts from any other kind of
21transaction that is not taxable under this Act, entries in any
22books, records or other pertinent papers or documents of the
23taxpayer in relation thereto shall be in detail sufficient to
24show the name and address of the taxpayer's customer in each
25such transaction, the character of every such transaction, the
26date of every such transaction, the amount of receipts realized

 

 

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1from every such transaction and such other information as may
2be necessary to establish the non-taxable character of such
3transaction under this Act.
4    Except in the case of a sale to a purchaser who will always
5resell and deliver the property to his customers outside
6Illinois, anyone claiming that he has made a nontaxable sale
7for resale in some form as tangible personal property shall
8also keep a record of the purchaser's registration number or
9resale number with the Department.
10    It shall be presumed that all sales of tangible personal
11property are subject to tax under this Act until the contrary
12is established, and the burden of proving that a transaction is
13not taxable hereunder shall be upon the person who would be
14required to remit the tax to the Department if such transaction
15is taxable. In the course of any audit or investigation or
16hearing by the Department with reference to a given taxpayer,
17if the Department finds that the taxpayer lacks documentary
18evidence needed to support the taxpayer's claim to exemption
19from tax hereunder, the Department is authorized to notify the
20taxpayer in writing to produce such evidence, and the taxpayer
21shall have 60 days subject to the right in the Department to
22extend this period either on request for good cause shown or on
23its own motion from the date when such notice is sent to the
24taxpayer by certified or registered mail (or delivered to the
25taxpayer if the notice is served personally) in which to obtain
26and produce such evidence for the Department's inspection,

 

 

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1failing which the matter shall be closed, and the transaction
2shall be conclusively presumed to be taxable hereunder.
3    Books and records and other papers reflecting gross
4receipts received during any period with respect to which the
5Department is authorized to issue notices of tax liability as
6provided by Sections 4 and 5 of this Act shall be preserved
7until the expiration of such period unless the Department, in
8writing, shall authorize their destruction or disposal prior to
9such expiration.
10    Any person who fails to keep books and records or fails to
11produce books and records for examination, as required by this
12Section and the rules adopted by the Department, is liable to
13pay to the Department, for deposit into the Tax Compliance and
14Administration Fund, a penalty of $1,000 for the first failure
15to keep books and records or produce books and records for
16examination and a penalty of $3,000 for each subsequent failure
17to keep books and records or produce books and records for
18examination as required by this Section and the rules adopted
19by the Department. The penalties imposed under this Section
20shall not apply if the taxpayer shows that he or she acted with
21ordinary business care and prudence. The Department may adopt
22rules to administer the penalties under this Section.
23(Source: P.A. 88-480.)
 
24    Section 25. The Cigarette Tax Act is amended by changing
25Sections 12, 13, 14, 15, 18b, and 18c and by adding Sections

 

 

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113a, 15a, and 18d as follows:
 
2    (35 ILCS 130/12)  (from Ch. 120, par. 453.12)
3    Sec. 12. Every distributor or secondary distributor who is
4required to procure a license under this Act and who purchases
5cigarettes for shipment into Illinois from a point outside this
6State shall procure invoices in duplicate covering each such
7shipment, shall make the invoices available for inspection upon
8demand by a duly authorized employee of the Department, and
9shall, if the Department so requires, furnish one copy of each
10such invoice to the Department at the time of filing a return
11or a report required by this Act.
12(Source: P.A. 96-1027, eff. 7-12-10.)
 
13    (35 ILCS 130/13)  (from Ch. 120, par. 453.13)
14    Sec. 13. Whenever any original package of cigarettes is
15found in the place of business or in the possession of any
16person who is not a licensed distributor under this Act without
17proper stamps affixed thereto, or an authorized substitute
18therefor imprinted thereon, underneath the sealed transparent
19wrapper of such original package, as required by this Act, the
20prima facie presumption shall arise that such original package
21of cigarettes is kept therein or is held by such person in
22violation of the provisions of this Act. If a presumption is
23raised, the Department may, in addition to the penalties
24imposed by Sections 18b and 18c of this Act and any other civil

 

 

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1or criminal penalties provided for in this Act, assess tax,
2penalty, and interest on the original packages of cigarettes.
3(Source: Laws 1953, p. 255.)
 
4    (35 ILCS 130/13a new)
5    Sec. 13a. Contraband cigarettes. Whenever a retailer
6obtains original packages of cigarettes from an unlicensed
7in-state or out-of-state distributor or person, a prima facie
8presumption shall arise that such original packages of
9cigarettes are contraband and are possessed by such retailer or
10were possessed by such retailer in violation of the provisions
11of this Act and subject to the penalties imposed by Sections
1218b and 18c of this Act. Invoices or other documents kept in
13the normal course of business in the possession of a retailer
14reflecting purchases of original packages of cigarettes from an
15unlicensed in-state or out-of-state distributor or person or
16invoices or other documents kept in the normal course of
17business obtained by the Department from an in-state or
18out-of-state distributor or person, are sufficient to raise the
19presumption that such original packages of cigarettes are
20contraband and are possessed, or were possessed, by such
21retailer in violation of the provisions of this Act and the
22retailer is subject to the penalties imposed by Sections 18b
23and 18c. If a presumption is raised, the Department may, in
24addition to the penalties imposed by Sections 18b and 18c and
25any other civil or criminal penalties provided for in this Act,

 

 

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1assess tax, penalty, and interest on the original packages of
2cigarettes.
 
3    (35 ILCS 130/14)  (from Ch. 120, par. 453.14)
4    Sec. 14. Any person required by this Act to keep records of
5any kind whatsoever, who shall fail to keep the records so
6required or who shall falsify such records, shall be guilty of
7a Class 4 felony. If a person fails to produce the records for
8inspection by the Department upon request, a prima facie
9presumption shall arise that the person has failed to keep the
10records so required. A person who is unable to rebut this
11presumption is in violation of this Act and is subject to the
12penalties provided in this Section.
13(Source: P.A. 83-1428.)
 
14    (35 ILCS 130/15)  (from Ch. 120, par. 453.15)
15    Sec. 15. Any person who shall fail to safely maintain and
16preserve the records required by Sections Section 11, and
17Section 11a, 11b, and 11c of this Act for the period of 3 three
18years, as required therein, in such manner as to insure
19permanency and accessibility for inspection by the Department,
20shall be guilty of a business offense and may be fined up to
21$5,000.
22(Source: P.A. 96-1027, eff. 7-12-10.)
 
23    (35 ILCS 130/15a new)

 

 

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1    Sec. 15a. Failure to keep or produce books and records. Any
2person who fails to keep books and records or fails to produce
3books and records for inspection, as required by Sections 11,
411a, 11b, and 11c of this Act, is liable to pay to the
5Department, for deposit in the Tax Compliance and
6Administration Fund, a penalty of $1,000 for the first failure
7to keep books and records or failure to produce books and
8records for inspection, as required by Sections 11, 11a, 11b,
9and 11c, and $3,000 for each subsequent failure to keep books
10and records or failure to produce books and records for
11inspection, as required by Sections 11, 11a, 11b, and 11c. The
12Department may adopt rules to administer the penalties under
13this Section.
 
14    (35 ILCS 130/18b)  (from Ch. 120, par. 453.18b)
15    Sec. 18b. Possession of more than 100 original packages of
16contraband cigarettes; penalty. With the exception of licensed
17distributors and transporters, as defined in Section 9c of this
18Act, possessing unstamped original packages of cigarettes, and
19licensed distributors possessing original packages of
20cigarettes that bear a tax stamp of another state or taxing
21jurisdiction, anyone possessing or having possessed contraband
22cigarettes contained in original packages is liable to pay, to
23the Department for deposit in the Tax Compliance and
24Administration Fund, a penalty of $25 for each such package of
25cigarettes in excess of 100 packages, unless reasonable cause

 

 

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1can be established by the person upon whom the penalty is
2imposed. This penalty is in addition to the taxes imposed by
3this Act. Reasonable cause shall be determined in each
4situation in accordance with rules adopted by the Department.
5The provisions of the Uniform Penalty and Interest Act do not
6apply to this Section.
7(Source: P.A. 96-782, eff. 1-1-10.)
 
8    (35 ILCS 130/18c)
9    Sec. 18c. Possession of not less than 10 and not more than
10100 original packages of contraband cigarettes; penalty. With
11the exception of licensed distributors and transporters, as
12defined in Section 9c of this Act, possessing unstamped
13original packages of cigarettes, and licensed distributors
14possessing original packages of cigarettes that bear a tax
15stamp of another state or taxing jurisdiction, anyone
16possessing or having possessed not less than 10 and not more
17than 100 packages of contraband cigarettes contained in
18original packages is liable to pay to the Department, for
19deposit into the Tax Compliance and Administration Fund, a
20penalty of $15 $10 for each such package of cigarettes, unless
21reasonable cause can be established by the person upon whom the
22penalty is imposed. Reasonable cause shall be determined in
23each situation in accordance with rules adopted by the
24Department. The provisions of the Uniform Penalty and Interest
25Act do not apply to this Section.

 

 

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1(Source: P.A. 96-782, eff. 1-1-10.)
 
2    (35 ILCS 130/18d new)
3    Sec. 18d. Cigarette package sizes; sale of individual or
4loose cigarettes prohibited. Cigarettes may only be sold in
5packages of 20 or 25 cigarettes. The sale of individual or
6loose cigarettes is prohibited. Any person who violates this
7Section of the Act is liable to pay to the Department, for
8deposit in the Tax Compliance and Administration Fund, a
9penalty of $1,000 for the first violation and $3,000 for any
10subsequent violation. Any person who violates this Section
11shall be guilty of a Class 4 felony. The Department may adopt
12rules to administer the penalties under this Section.
 
13    Section 30. The Cigarette Use Tax Act is amended by
14changing Sections 12, 22, 23, 25a, and 25b and by adding
15Sections 8a, 23a, and 25c as follows:
 
16    (35 ILCS 135/8a new)
17    Sec. 8a. Contraband cigarettes. Whenever any person
18obtains original packages of cigarettes from an unlicensed
19in-state or out-of-state distributor or person, a prima facie
20presumption shall arise that such original packages of
21cigarettes are contraband and are possessed or were possessed
22by such person in violation of the provisions of this Act and
23subject to the penalties imposed by Sections 25a and 25b.

 

 

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1Invoices or other documents kept in the normal course of
2business in the possession of a person reflecting purchases of
3original packages of cigarettes from an unlicensed in-state or
4out-of-state distributor or person or invoices or other
5documents kept in the normal course of business obtained by the
6Department from an in-state or out-of-state distributor or
7person, are sufficient to raise the presumption that such
8original packages of cigarettes are contraband and are
9possessed, or were possessed, by such person in violation of
10the provisions of this Act and the person is subject to the
11penalties imposed by Sections 25a and 25b. If a presumption is
12raised, the Department may, in addition to the penalties
13imposed by Sections 25a and 25b and any other civil or criminal
14penalties provided for in this Act, assess tax, penalty, and
15interest on the original packages of cigarettes.
 
16    (35 ILCS 135/12)  (from Ch. 120, par. 453.42)
17    Sec. 12. Declaration of possession of cigarettes on which
18tax not paid.
19    (a) When cigarettes are acquired for use in this State by a
20person (including a distributor as well as any other person),
21who did not pay the tax herein imposed to a distributor, the
22person, within 30 days after acquiring the cigarettes, shall
23file with the Department a return declaring the possession of
24the cigarettes and shall transmit with the return to the
25Department the tax imposed by this Act.

 

 

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1    (b) On receipt of the return and payment of the tax as
2required by paragraph (a), the Department may furnish the
3person with a suitable tax stamp to be affixed to the package
4of cigarettes upon which the tax has been paid if the
5Department determines that the cigarettes still exist.
6    (c) The return referred to in paragraph (a) shall contain
7the name and address of the person possessing the cigarettes
8involved, the location of the cigarettes and the quantity,
9brand name, place, and date of the acquisition of the
10cigarettes.
11    (d) Nothing in this Section shall permit a secondary
12distributor to purchase unstamped original packages of
13cigarettes or to purchase original packages of cigarettes from
14a person other than a licensed distributor.
15    (e) Any distributor who violates this Section is liable to
16pay to the Department, for deposit in the Tax Compliance and
17Administration Fund, a penalty of $1,000 for the first
18violation and $3,000 for any subsequent violation. The
19Department may adopt rules to administer the penalties under
20this Section. The Department may, in addition to the penalties
21imposed by this Section, and any other civil or criminal
22penalties provided for in this Act, assess tax, penalty, and
23interest on the original packages of cigarettes.
24(Source: P.A. 96-1027, eff. 7-12-10.)
 
25    (35 ILCS 135/22)  (from Ch. 120, par. 453.52)

 

 

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

 

 

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1    (35 ILCS 135/23a new)
2    Sec. 23a. Failure to keep or produce books and records. Any
3person who fails to keep books and records or fails to produce
4books and records for inspection, as required by Sections 15
5and 15a of this Act, is liable to pay to the Department, for
6deposit in the Tax Compliance and Administration Fund, a
7penalty of $1,000 for the first failure to keep books and
8records or failure to produce books and records for inspection,
9as required by Sections 15 and 15a, and $3,000 for each
10subsequent failure to keep books and records or failure to
11produce books and records for inspection, as required by
12Sections 15 and 15a. The Department may adopt rules to
13administer the penalties under this Section.
 
14    (35 ILCS 135/25a)  (from Ch. 120, par. 453.55a)
15    Sec. 25a. Possession of more than 100 original packages of
16contraband cigarettes; penalty. With the exception of licensed
17distributors or transporters, as defined in Section 9c of the
18Cigarette Tax Act, possessing unstamped original packages of
19cigarettes, and licensed distributors possessing original
20packages of cigarettes that bear a tax stamp of another state
21or taxing jurisdiction, anyone possessing or having possessed
22more than 100 packages of contraband cigarettes contained in
23original packages is liable to pay, to the Department for
24deposit into the Tax Compliance and Administration Fund, a
25penalty of $25 for each such package of cigarettes in excess of

 

 

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1100 packages, unless reasonable cause can be established by the
2person upon whom the penalty is imposed. Reasonable cause shall
3be determined in each situation in accordance with rules
4adopted by the Department. The provisions of the Uniform
5Penalty and Interest Act do not apply to this Section.
6(Source: P.A. 96-782, eff. 1-1-10.)
 
7    (35 ILCS 135/25b)
8    Sec. 25b. Possession of not less than 10 and not more than
9100 original packages not tax stamped or improperly tax
10stamped; penalty. With the exception of licensed distributors
11and transporters, as defined in Section 9c of the Cigarette Tax
12Act, possessing unstamped packages of cigarettes, and licensed
13distributors possessing original packages of cigarettes that
14bear a tax stamp of another state or taxing jurisdiction,
15anyone possessing or having possessed not less than 10 and not
16more than 100 packages of contraband cigarettes contained in
17original packages is liable to pay to the Department, for
18deposit into the Tax Compliance and Administration Fund, a
19penalty of $20 for each such package of cigarettes, unless
20reasonable cause can be established by the person upon whom the
21penalty is imposed. Reasonable cause shall be determined in
22each situation in accordance with rules adopted by the
23Department. Any person who purchases and possesses a total of 9
24or fewer original packages of unstamped cigarettes per month is
25exempt from the penalties of this Section. The provisions of

 

 

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1the Uniform Penalty and Interest Act do not apply to this
2Section.
3(Source: P.A. 96-782, eff. 1-1-10.)
 
4    (35 ILCS 135/25c new)
5    Sec. 25c. Cigarette package sizes; sale of individual or
6loose cigarettes prohibited. Cigarettes may only be sold in
7packages of 20 or 25 cigarettes. The sale of individual or
8loose cigarettes is prohibited. Any person who violates this
9Section is liable to pay to the Department, for deposit in the
10Tax Compliance and Administration Fund, a penalty of $1,000 for
11the first violation and $3,000 for any subsequent violation.
12Any person who violates this Section shall be guilty of a Class
134 felony. This Section shall not apply if the violation in a
14particular case also constitutes a violation of the Cigarette
15Tax Act.
 
16    Section 35. The Tobacco Products Tax Act of 1995 is amended
17by changing Sections 10-25, 10-35, 10-37, 10-40, and 10-50 and
18by adding Sections 10-35a and 10-38 as follows:
 
19    (35 ILCS 143/10-25)
20    Sec. 10-25. License actions.
21    (a) The Department may, after notice and a hearing, revoke,
22cancel, or suspend the license of any distributor or retailer
23who violates any of the provisions of this Act, fails to keep

 

 

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1books and records as required under this Act, fails to make
2books and records available for inspection upon demand by a
3duly authorized employee of the Department, or violates a rule
4or regulation of the Department for the administration and
5enforcement of this Act. The notice shall specify the alleged
6violation or violations upon which the revocation,
7cancellation, or suspension proceeding is based.
8    (b) The Department may revoke, cancel, or suspend the
9license of any distributor for a violation of the Tobacco
10Product Manufacturers' Escrow Enforcement Act as provided in
11Section 20 of that Act.
12    (c) If the retailer has a training program that facilitates
13compliance with minimum-age tobacco laws, the Department shall
14suspend for 3 days the license of that retailer for a fourth or
15subsequent violation of the Prevention of Tobacco Use by Minors
16and Sale and Distribution of Tobacco Products Act, as provided
17in subsection (a) of Section 2 of that Act. For the purposes of
18this Section, any violation of subsection (a) of Section 2 of
19the Prevention of Tobacco Use by Minors and Sale and
20Distribution of Tobacco Products Act occurring at the
21retailer's licensed location, during a 24-month period, shall
22be counted as a violation against the retailer.
23    If the retailer does not have a training program that
24facilitates compliance with minimum-age tobacco laws, the
25Department shall suspend for 3 days the license of that
26retailer for a second violation of the Prevention of Tobacco

 

 

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

 

 

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1employee's file and may be used to provide proof of training.
2    (d) The Department may, by application to any circuit
3court, obtain an injunction restraining any person who engages
4in business as a distributor of tobacco products without a
5license (either because his or her license has been revoked,
6canceled, or suspended or because of a failure to obtain a
7license in the first instance) from engaging in that business
8until that person, as if that person were a new applicant for a
9license, complies with all of the conditions, restrictions, and
10requirements of Section 10-20 of this Act and qualifies for and
11obtains a license. Refusal or neglect to obey the order of the
12court may result in punishment for contempt.
13(Source: P.A. 98-1055, eff. 1-1-16; 99-192, eff. 1-1-16.)
 
14    (35 ILCS 143/10-35)
15    Sec. 10-35. Record keeping.
16    (a) Every distributor, as defined in Section 10-5, shall
17keep complete and accurate records of tobacco products held,
18purchased, manufactured, brought in or caused to be brought in
19from without the State, and tobacco products sold, or otherwise
20disposed of, and shall preserve and keep all invoices, bills of
21lading, sales records, and copies of bills of sale, the
22wholesale price for tobacco products sold or otherwise disposed
23of, an inventory of tobacco products prepared as of December 31
24of each year or as of the last day of the distributor's fiscal
25year if he or she files federal income tax returns on the basis

 

 

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

 

 

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1or disposition of tobacco products. Such records need not be
2maintained on the licensed premises, but must be maintained in
3the State of Illinois; however, if access is available
4electronically, the records may be maintained out of state.
5However, all original invoices or copies thereof covering
6purchases of tobacco products must be retained on the licensed
7premises for a period of 90 days after such purchase, unless
8the Department has granted a waiver in response to a written
9request in cases where records are kept at a central business
10location within the State of Illinois or in cases where records
11that are available electronically are maintained out of state.
12The Department shall adopt rules regarding the eligibility for
13a waiver, revocation of a waiver, and requirements and
14standards for maintenance and accessibility of records located
15at a central location out-of-State pursuant to a waiver
16provided under this Section.
17    (c) Books, records, papers, and documents that are required
18by this Act to be kept shall, at all times during the usual
19business hours of the day, be subject to inspection by the
20Department or its duly authorized agents and employees. The
21books, records, papers, and documents for any period with
22respect to which the Department is authorized to issue a notice
23of tax liability shall be preserved until the expiration of
24that period.
25(Source: P.A. 98-1055, eff. 1-1-16; 99-192, eff. 1-1-16.)
 

 

 

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1    (35 ILCS 143/10-35a new)
2    Sec. 10-35a. Failure to keep or produce books and records.
3Any person who fails to keep books and records or fails to
4produce books and records for inspection, as required by
5Section 10-35, is liable to pay to the Department, for deposit
6in the Tax Compliance and Administration Fund, a penalty of
7$1,000 for the first failure to keep books and records or
8failure to produce books and records for inspection, as
9required by Section 10-35, and $3,000 for each subsequent
10failure to keep books and records or failure to produce books
11and records for inspection, as required by Section 10-35. The
12Department may adopt rules to administer the penalties under
13this Section.
 
14    (35 ILCS 143/10-37)
15    Sec. 10-37. Proof of payment of tax imposed by this Act.
16Every licensed distributor of tobacco products in this State is
17required to show proof of the tax having been paid as required
18by this Act by displaying its Tobacco Products License number
19on every sales invoice issued to a retailer in this State. No
20retailer shall possess tobacco products without either a proper
21invoice indicating that the tobacco products tax was paid by a
22distributor for the tobacco products in the retailer's
23possession or other proof that the tax was paid by the retailer
24if it has purchased tobacco products on which tax has not been
25paid as required by this Act. Failure to comply with the

 

 

10000SB3141ham001- 28 -LRB100 20670 HLH 40081 a

1provisions of this paragraph may be grounds for revocation of a
2distributor's or retailer's license in accordance with Section
310-25 of this Act or Section 6 of the Cigarette Tax Act. In
4addition, the Department may impose a civil penalty not to
5exceed $1,000 for the first violation and $3,000 for each
6subsequent violation, which shall be deposited into the Tax
7Compliance and Administration Fund.
8(Source: P.A. 98-1055, eff. 1-1-16.)
 
9    (35 ILCS 143/10-38 new)
10    Sec. 10-38. Presumption for unlicensed distributors or
11persons. Whenever any person obtains tobacco products from an
12unlicensed in-state or out-of-state distributor or person, a
13prima facie presumption shall arise that the tax imposed by
14this Act on such tobacco products has not been paid in
15violation of this Act. Invoices or other documents kept in the
16normal course of business in the possession of a person
17reflecting purchases of tobacco products from an unlicensed
18in-state or out-of-state distributor or person or invoices or
19other documents kept in the normal course of business obtained
20by the Department from in-state or out-of-state distributors or
21persons, are sufficient to raise the presumption that the tax
22imposed by this Act has not been paid. If a presumption is
23raised, the Department may assess tax, penalty, and interest on
24the tobacco products. In addition, any person who violates this
25Section is liable to pay to the Department, for deposit in the

 

 

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1Tax Compliance and Administration Fund, a penalty of $1,000 for
2the first violation and $3,000 for any subsequent violation.
3The Department may adopt rules to administer the penalties
4under this Section.
 
5    (35 ILCS 143/10-40)
6    Sec. 10-40. Invoices. Every distributor or other person who
7purchases tobacco products for resale for shipment into
8Illinois from a point outside Illinois shall procure invoices
9in duplicate covering each shipment and shall make the invoices
10available for inspection upon demand by a duly authorized
11employee of the Department, and shall, if the Department so
12requires, furnish one copy of each invoice to the Department at
13the time of filing the return required by this Act.
14(Source: P.A. 89-21, eff. 6-6-95.)
 
15    (35 ILCS 143/10-50)
16    Sec. 10-50. Violations and penalties. When the amount due
17is under $300, any distributor who fails to file a return,
18willfully fails or refuses to make any payment to the
19Department of the tax imposed by this Act, or files a
20fraudulent return, or any officer or agent of a corporation
21engaged in the business of distributing tobacco products to
22retailers and consumers located in this State who signs a
23fraudulent return filed on behalf of the corporation, or any
24accountant or other agent who knowingly enters false

 

 

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1information on the return of any taxpayer under this Act is
2guilty of a Class 4 felony.
3    Any person who violates any provision of Section 10-20,
410-21, or 10-22 of this Act, fails to keep books and records as
5required under this Act, or willfully violates a rule or
6regulation of the Department for the administration and
7enforcement of this Act is guilty of a Class 4 felony. A person
8commits a separate offense on each day that he or she engages
9in business in violation of Section 10-20, 10-21, or 10-22 of
10this Act. If a person fails to produce the books and records
11for inspection by the Department upon request, a prima facie
12presumption shall arise that the person has failed to keep
13books and records as required under this Act. A person who is
14unable to rebut this presumption is in violation of this Act
15and is subject to the penalties provided in this Section.
16    When the amount due is under $300, any person who accepts
17money that is due to the Department under this Act from a
18taxpayer for the purpose of acting as the taxpayer's agent to
19make the payment to the Department, but who fails to remit the
20payment to the Department when due, is guilty of a Class 4
21felony.
22    Any person who violates any provision of Sections 10-20,
2310-21 and 10-22 of this Act, fails to keep books and records as
24required under this Act, or willfully violates a rule or
25regulation of the Department for the administration and
26enforcement of this Act is guilty of a business offense and may

 

 

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1be fined up to $5,000. If a person fails to produce books and
2records for inspection by the Department upon request, a prima
3facie presumption shall arise that the person has failed to
4keep books and records as required under this Act. A person who
5is unable to rebut this presumption is in violation of this Act
6and is subject to the penalties provided in this Section. A
7person commits a separate offense on each day that he or she
8engages in business in violation of Sections 10-20, 10-21 and
910-22 of this Act.
10    When the amount due is $300 or more, any distributor who
11files, or causes to be filed, a fraudulent return, or any
12officer or agent of a corporation engaged in the business of
13distributing tobacco products to retailers and consumers
14located in this State who files or causes to be filed or signs
15or causes to be signed a fraudulent return filed on behalf of
16the corporation, or any accountant or other agent who knowingly
17enters false information on the return of any taxpayer under
18this Act is guilty of a Class 3 felony.
19    When the amount due is $300 or more, any person engaged in
20the business of distributing tobacco products to retailers and
21consumers located in this State who fails to file a return,
22willfully fails or refuses to make any payment to the
23Department of the tax imposed by this Act, or accepts money
24that is due to the Department under this Act from a taxpayer
25for the purpose of acting as the taxpayer's agent to make
26payment to the Department but fails to remit such payment to

 

 

10000SB3141ham001- 32 -LRB100 20670 HLH 40081 a

1the Department when due is guilty of a Class 3 felony.
2    When the amount due is under $300, any retailer who fails
3to file a return, willfully fails or refuses to make any
4payment to the Department of the tax imposed by this Act, or
5files a fraudulent return, or any officer or agent of a
6corporation engaged in the retail business of selling tobacco
7products to purchasers of tobacco products for use and
8consumption located in this State who signs a fraudulent return
9filed on behalf of the corporation, or any accountant or other
10agent who knowingly enters false information on the return of
11any taxpayer under this Act is guilty of a Class A misdemeanor
12for a first offense and a Class 4 felony for each subsequent
13offense.
14    When the amount due is $300 or more, any retailer who fails
15to file a return, willfully fails or refuses to make any
16payment to the Department of the tax imposed by this Act, or
17files a fraudulent return, or any officer or agent of a
18corporation engaged in the retail business of selling tobacco
19products to purchasers of tobacco products for use and
20consumption located in this State who signs a fraudulent return
21filed on behalf of the corporation, or any accountant or other
22agent who knowingly enters false information on the return of
23any taxpayer under this Act is guilty of a Class 4 felony.
24    Any person whose principal place of business is in this
25State and who is charged with a violation under this Section
26shall be tried in the county where his or her principal place

 

 

10000SB3141ham001- 33 -LRB100 20670 HLH 40081 a

1of business is located unless he or she asserts a right to be
2tried in another venue. If the taxpayer does not have his or
3her principal place of business in this State, however, the
4hearing must be held in Sangamon County unless the taxpayer
5asserts a right to be tried in another venue.
6    Any taxpayer or agent of a taxpayer who with the intent to
7defraud purports to make a payment due to the Department by
8issuing or delivering a check or other order upon a real or
9fictitious depository for the payment of money, knowing that it
10will not be paid by the depository, is guilty of a deceptive
11practice in violation of Section 17-1 of the Criminal Code of
122012.
13    A prosecution for a violation described in this Section may
14be commenced within 3 years after the commission of the act
15constituting the violation.
16(Source: P.A. 100-201, eff. 8-18-17.)
 
17    (35 ILCS 143/10-36 rep.)
18    Section 40. The Tobacco Products Tax Act of 1995 is amended
19by repealing Section 10-36.
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.".