Public Act 098-1055
 
HB2494 EnrolledLRB098 08122 JLS 38213 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Department of Revenue Law of the Civil
Administrative Code of Illinois is amended by changing Section
2505-380 as follows:
 
    (20 ILCS 2505/2505-380)  (was 20 ILCS 2505/39b47)
    Sec. 2505-380. Revocation of or refusal to issue or reissue
a certificate of registration, permit, or license.
    (a) The Department has the power, after notice and an
opportunity for a hearing, to revoke a certificate of
registration, permit, or license issued by the Department if
the holder of the certificate of registration, permit, or
license fails to file a return, or to pay the tax, fee,
penalty, or interest shown in a filed return, or to pay any
final assessment of tax, fee, penalty, or interest, as required
by the tax or fee Act under which the certificate of
registration, permit, or license is required or any other tax
or fee Act administered by the Department.
    (b) The Department may refuse to issue, reissue, or renew a
certificate of registration, permit, or license authorized to
be issued by the Department if a person who is named as the
owner, a partner, a corporate officer, or, in the case of a
limited liability company, a manager or member, of the
applicant on the application for the certificate of
registration, permit or license, is or has been named as the
owner, a partner, a corporate officer, or in the case of a
limited liability company, a manager or member, on the
application for the certificate of registration, permit, or
license of a person that is in default for moneys due under the
tax or fee Act upon which the certificate of registration,
permit, or license is required or any other tax or fee Act
administered by the Department. For purposes of this Section
only, in determining whether a person is in default for moneys
due, the Department shall include only amounts established as a
final liability within the 20 years prior to the date of the
Department's notice of refusal to issue or reissue the
certificate of registration, permit, or license. For purposes
of this Section, "person" means any natural individual, firm,
partnership, association, joint stock company, joint
adventure, public or private corporation, limited liability
company, or a receiver, executor, trustee, guardian or other
representative appointed by order of any court.
    (c) When revoking or refusing to issue or reissue a
certificate of registration, permit, or license issued by the
Department, the procedure for notice and hearing used shall be
the procedure provided under the Act pursuant to which the
certificate of registration, permit, or license was issued.
(Source: P.A. 98-496, eff. 1-1-14.)
 
    Section 10. The Cigarette Tax Act is amended by changing
Sections 3-10, 4d, 4e, 4f, 6, 7, 8, 10, 11, 11a, 11b, 23, 24,
and 26 and by adding Sections 4g, 4h, and 11c as follows:
 
    (35 ILCS 130/3-10)
    Sec. 3-10. Cigarette enforcement.
    (a) Prohibitions. It is unlawful for any person:
        (1) to sell or distribute in this State; to acquire,
    hold, own, possess, or transport, for sale or distribution
    in this State; or to import, or cause to be imported into
    this State for sale or distribution in this State:
            (A) any cigarettes the package of which:
                (i) bears any statement, label, stamp,
            sticker, or notice indicating that the
            manufacturer did not intend the cigarettes to be
            sold, distributed, or used in the United States,
            including but not limited to labels stating "For
            Export Only", "U.S. Tax Exempt", "For Use Outside
            U.S.", or similar wording; or
                (ii) does not comply with:
                    (aa) all requirements imposed by or
                pursuant to federal law regarding warnings and
                other information on packages of cigarettes
                manufactured, packaged, or imported for sale,
                distribution, or use in the United States,
                including but not limited to the precise
                warning labels specified in the federal
                Cigarette Labeling and Advertising Act, 15
                U.S.C. 1333; and
                    (bb) all federal trademark and copyright
                laws;
            (B) any cigarettes imported into the United States
        in violation of 26 U.S.C. 5754 or any other federal
        law, or implementing federal regulations;
            (C) any cigarettes that such person otherwise
        knows or has reason to know the manufacturer did not
        intend to be sold, distributed, or used in the United
        States; or
            (D) any cigarettes for which there has not been
        submitted to the Secretary of the U.S. Department of
        Health and Human Services the list or lists of the
        ingredients added to tobacco in the manufacture of the
        cigarettes required by the federal Cigarette Labeling
        and Advertising Act, 15 U.S.C. 1335a;
        (2) to alter the package of any cigarettes, prior to
    sale or distribution to the ultimate consumer, so as to
    remove, conceal, or obscure:
            (A) any statement, label, stamp, sticker, or
        notice described in subdivision (a)(1)(A)(i) of this
        Section;
            (B) any health warning that is not specified in, or
        does not conform with the requirements of, the federal
        Cigarette Labeling and Advertising Act, 15 U.S.C.
        1333; or
        (3) to affix any stamp required pursuant to this Act to
    the package of any cigarettes described in subdivision
    (a)(1) of this Section or altered in violation of
    subdivision (a)(2).
    (b) Documentation. On the first business day of each month,
each person licensed to affix the State tax stamp to cigarettes
shall file with the Department, for all cigarettes imported
into the United States to which the person has affixed the tax
stamp in the preceding month:
        (1) a copy of:
            (A) the permit issued pursuant to the Internal
        Revenue Code, 26 U.S.C. 5713, to the person importing
        the cigarettes into the United States allowing the
        person to import the cigarettes; and
            (B) the customs form containing, with respect to
        the cigarettes, the internal revenue tax information
        required by the U.S. Bureau of Alcohol, Tobacco and
        Firearms;
        (2) a statement, signed by the person under penalty of
    perjury, which shall be treated as confidential by the
    Department and exempt from disclosure under the Freedom of
    Information Act, identifying the brand and brand styles of
    all such cigarettes, the quantity of each brand style of
    such cigarettes, the supplier of such cigarettes, and the
    person or persons, if any, to whom such cigarettes have
    been conveyed for resale; and a separate statement, signed
    by the individual under penalty of perjury, which shall not
    be treated as confidential or exempt from disclosure,
    separately identifying the brands and brand styles of such
    cigarettes; and
        (3) a statement, signed by an officer of the
    manufacturer or importer under penalty of perjury,
    certifying that the manufacturer or importer has complied
    with:
            (A) the package health warning and ingredient
        reporting requirements of the federal Cigarette
        Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
        with respect to such cigarettes; and
            (B) the provisions of Exhibit T of the Master
        Settlement Agreement entered in the case of People of
        the State of Illinois v. Philip Morris, et al. (Circuit
        Court of Cook County, No. 96-L13146), including a
        statement indicating whether the manufacturer is, or
        is not, a participating tobacco manufacturer within
        the meaning of Exhibit T.
    (c) Administrative sanctions.
        (1) Upon finding that a distributor, secondary
    distributor, retailer, or person has committed any of the
    acts prohibited by subsection (a), knowing or having reason
    to know that he or she has done so, or upon finding that a
    distributor or person has failed to comply with any
    requirement of subsection (b), the Department may revoke or
    suspend the license or licenses of any distributor, or
    secondary distributor, or retailer pursuant to the
    procedures set forth in Section 6 and impose, on the
    distributor, secondary distributor, retailer, or person, a
    civil penalty in an amount not to exceed the greater of
    500% of the retail value of the cigarettes involved or
    $5,000.
        (2) Cigarettes that are acquired, held, owned,
    possessed, transported in, imported into, or sold or
    distributed in this State in violation of this Section
    shall be deemed contraband under this Act and are subject
    to seizure and forfeiture as provided in this Act, and all
    such cigarettes seized and forfeited shall be destroyed or
    maintained and used in an undercover capacity. Such
    cigarettes shall be deemed contraband whether the
    violation of this Section is knowing or otherwise.
    (d) Unfair trade practices. In addition to any other
penalties provided for in this Act, a violation of subsection
(a) or subsection (b) of this Section shall constitute an
unlawful practice as provided in the Consumer Fraud and
Deceptive Business Practices Act.
    (d-1) Retailers issued a license under Section 4g of this
Act and secondary distributors shall not be liable under
subsections (c)(1) and (d) of this Section for unknowingly
possessing, selling, or distributing to consumers or users
cigarettes identified in subsection (a)(1) of this Section if
the cigarettes possessed, sold, or distributed by the licensed
retailer or secondary distributor were obtained from a
distributor licensed under this Act.
    (d-2) Criminal penalties. A distributor, secondary
distributor, retailer, or person who violates subsection (a),
or a distributor, secondary distributor, or person who violates
subsection (b) of this Section shall be guilty of a Class 4
felony.
    (e) Unfair cigarette sales. For purposes of the Trademark
Registration and Protection Act and the Counterfeit Trademark
Act, cigarettes imported or reimported into the United States
for sale or distribution under any trade name, trade dress, or
trademark that is the same as, or is confusingly similar to,
any trade name, trade dress, or trademark used for cigarettes
manufactured in the United States for sale or distribution in
the United States shall be presumed to have been purchased
outside of the ordinary channels of trade.
    (f) General provisions.
        (1) This Section shall be enforced by the Department;
    provided that, at the request of the Director of Revenue or
    the Director's duly authorized agent, the State police and
    all local police authorities shall enforce the provisions
    of this Section. The Attorney General has concurrent power
    with the State's Attorney of any county to enforce this
    Section.
        (2) For the purpose of enforcing this Section, the
    Director of Revenue and any agency to which the Director
    has delegated enforcement responsibility pursuant to
    subdivision (f)(1) may request information from any State
    or local agency and may share information with and request
    information from any federal agency and any agency of any
    other state or any local agency of any other state.
        (3) In addition to any other remedy provided by law,
    including enforcement as provided in subdivision (f)
    (a)(1), any person may bring an action for appropriate
    injunctive or other equitable relief for a violation of
    this Section; actual damages, if any, sustained by reason
    of the violation; and, as determined by the court, interest
    on the damages from the date of the complaint, taxable
    costs, and reasonable attorney's fees. If the trier of fact
    finds that the violation is flagrant, it may increase
    recovery to an amount not in excess of 3 times the actual
    damages sustained by reason of the violation.
    (g) Definitions. As used in this Section:
    "Importer" means that term as defined in 26 U.S.C. 5702(1).
    "Package" means that term as defined in 15 U.S.C. 1332(4).
    (h) Applicability.
        (1) This Section does not apply to:
            (A) cigarettes allowed to be imported or brought
        into the United States for personal use; and
            (B) cigarettes sold or intended to be sold as
        duty-free merchandise by a duty-free sales enterprise
        in accordance with the provisions of 19 U.S.C. 1555(b)
        and any implementing regulations; except that this
        Section shall apply to any such cigarettes that are
        brought back into the customs territory for resale
        within the customs territory.
        (2) The penalties provided in this Section are in
    addition to any other penalties imposed under other
    provision of law.
(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;
96-1027, eff. 7-12-10.)
 
    (35 ILCS 130/4d)
    Sec. 4d. Sales of cigarettes to and by retailers. In-state
makers, manufacturers, and fabricators licensed as
distributors under Section 4 of this Act and out-of-state
makers, manufacturers, and fabricators holding permits under
Section 4b of this Act may not sell original packages of
cigarettes to retailers. A retailer who is licensed under
Section 4g of this Act may sell only original packages of
cigarettes obtained from manufacturer representatives,
licensed secondary distributors, or licensed distributors
other than in-state makers, manufacturers, or fabricators
licensed as distributors under Section 4 of this Act and
out-of-state makers, manufacturers, or fabricators holding
permits under Section 4b of this Act.
(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;
97-587, eff. 8-26-11.)
 
    (35 ILCS 130/4e)
    Sec. 4e. Sales of cigarettes to and by secondary
distributors. In-state makers, manufacturers, and fabricators
licensed as distributors under Section 4 of this Act and
out-of-state makers, manufacturers, and fabricators holding
permits under Section 4b of this Act may not sell original
packages of cigarettes to secondary distributors. A secondary
distributor may sell only original packages of cigarettes
obtained from licensed distributors other than in-state
makers, manufacturers, or fabricators licensed as distributors
under Section 4 of this Act and out-of-state makers,
manufacturers, or fabricators holding permits under Section 4b
of this Act. Secondary distributors may sell cigarettes to
Illinois retailers issued a license under Section 4g of this
Act for resale, and are also authorized to make retail sales of
cigarettes at the location on the secondary distributor's
license as long as the secondary distributor obtains a license
under Section 4g of the Cigarette Tax Act and sells 75% or more
of the cigarettes sold at such location to retailers issued a
license under Section 4g of this Act for resale. All sales by
secondary distributors to retailers issued a license under
Section 4g of this Act must be made at the location on the
secondary distributor's license. Retailers issued a license
under Section 4g of this Act must take possession of all
cigarettes sold by the secondary distributor at the secondary
distributor's licensed address. Secondary distributors may not
make deliveries of cigarettes to retailers.
    Secondary distributors may not file a claim for credit or
refund with the State under Section 9d of this Act.
(Source: P.A. 96-1027, eff. 7-12-10.)
 
    (35 ILCS 130/4f)
    Sec. 4f. Manufacturer representatives.
    (a) No manufacturer may market cigarettes produced by the
manufacturer directly to retailers in this State issued a
license under Section 4g of this Act without first having
obtained authorization from the Department. Application for
authority to maintain representatives in this State to market
in this State cigarettes produced by the manufacturer shall be
made to the Department on a form furnished and prescribed by
the Department. Each applicant under this Section shall furnish
the following information to the Department on a form signed
and verified by the applicant under penalty of perjury:
        (1) the name and address of the applicant;
        (2) the address of every location from which the
    applicant proposes to engage in business in this State;
        (3) the number of manufacturer representatives the
    applicant requests to maintain in this State; and
        (4) any other additional information as the Department
    may reasonably require.
    The following manufacturers are ineligible to receive
authorization to maintain manufacturer representatives in this
State:
        (1) a manufacturer who owes, at the time of
    application, any delinquent cigarette taxes that have been
    determined by law to be due and unpaid, unless the
    applicant has entered into an agreement approved by the
    Department to pay the amount due;
        (2) a manufacturer who has had a license revoked within
    the past 2 years for misconduct relating to stolen or
    contraband cigarettes or has been convicted of a state or
    federal crime, punishable by imprisonment of one year or
    more, relating to stolen or contraband cigarettes;
        (3) a manufacturer who has been found, after notice and
    a hearing, to have imported or caused to be imported into
    the United States for sale or distribution any cigarette in
    violation of 19 U.S.C. 1681a;
        (4) a manufacturer who has been found, after notice and
    a hearing, to have imported or caused to be imported into
    the United States for sale or distribution or manufactured
    for sale or distribution in the United States any cigarette
    that does not fully comply with the Federal Cigarette
    Labeling and Advertising Act (15 U.S.C. 1331, et seq.);
        (5) a manufacturer who has been found, after notice and
    a hearing, to have made a material false statement in an
    application or has failed to produce records required to be
    maintained by this Act;
        (6) a manufacturer who has been found, after notice and
    hearing, to have violated any Section of this Act; or
        (7) a manufacturer licensed as a distributor under
    Section 4 of this Act or holding a permit under Section 4b
    of this Act.
    The Department, upon receipt of an application from a
manufacturer who is eligible to maintain manufacturer
representatives in this State, shall notify the applicant in
writing, not more than 60 days after an application has been
received, that the applicant may or may not maintain the
requested number of manufacturer representatives in this
State. A copy of the notice authorizing a manufacturer to
maintain manufacturer representatives in this State shall be
available for inspection by the Department at each place of
business identified in the application and in the motor vehicle
operated by marketing representatives in the course of
performing his or her duties in this State on behalf of the
manufacturer.
    A manufacturer representative shall notify the Department
of any change in the information contained on the application
form and shall do so within 30 days after any such change.
    (b) Only directors, officers, and employees of the
manufacturer may act as manufacturer representatives in this
State. The manufacturer shall provide to the Department the
names and addresses of the manufacturer representatives
operating in this State and the make, model, and license plate
number of each motor vehicle operated by a manufacturer
representative in the course of performing his or her duties in
this State on behalf of the manufacturer. The following
individuals may not act as manufacturer representatives:
        (1) an individual who owes any delinquent cigarette
    taxes that have been determined by law to be due and
    unpaid, unless the individual has entered into an agreement
    approved by the Department to pay the amount due;
        (2) an individual who has had a license revoked within
    the past 2 years for misconduct relating to stolen or
    contraband cigarettes or has been convicted of a state or
    federal crime, punishable by imprisonment of one year or
    more, relating to stolen or contraband cigarettes;
        (3) an individual who has been found, after notice and
    a hearing, to have made a material false statement in an
    application or has failed to produce records required to be
    maintained by this Act; or
        (4) an individual who has been found, after notice and
    hearing, to have violated any Section of this Act.
    (c) Manufacturer representatives may sell to retailers in
this State who are licensed under Section 4g of this Act only
original packages of cigarettes made, manufactured, or
fabricated by the manufacturer and purchased or obtained from a
distributor licensed under this Act, or the Cigarette Tax Use
Act, and on which tax stamps have been affixed. Manufacturer
representatives may sell up to 600 stamped original packages of
cigarettes in a calendar year, for the purpose of promoting the
manufacturer's brands of cigarettes. A manufacturer
representative may not possess more than 500 stamped original
packages of cigarettes made, manufactured, or fabricated by the
manufacturer and purchased or obtained from a distributor
licensed under this Act or the Cigarette Use Tax Act. Any
original packages of cigarettes in the possession of a
manufacturer representative that (i) are not made,
manufactured, or fabricated by the manufacturer and purchased
or obtained from a distributor licensed under this Act or the
Cigarette Use Tax Act, other than cigarettes for personal use
and consumption, (ii) exceed the maximum quantity of 500
original packages of cigarettes, excluding packages of
cigarettes for personal use and consumption; (iii) violate
Section 3-10 of this Act; or (iv) do not have the proper tax
stamps affixed, are contraband and subject to seizure and
forfeiture.
    Manufacturer representatives may sell, on behalf of
licensed distributors, stamped original packages of cigarettes
to retailers who are licensed under Section 4g of this Act on
behalf of licensed distributors. The manufacturer
representative shall provide the distributor with a signed
receipt for the cigarettes obtained from the distributor. The
distributor shall invoice the licensed retailer, and the
licensed retailer shall pay the distributor for all cigarettes
provided to licensed retailers by manufacturer representatives
on behalf of a distributor.
    Manufacturer representatives may sell stamped original
packages of cigarettes to licensed retailers that are purchased
from licensed distributors. Distributors shall provide
manufacturer representatives with invoices for stamped
original packages of cigarettes sold to manufacturer
representatives. Manufacturer representatives shall invoice
licensed retailers, and the licensed retailers shall pay the
manufacturer representatives for all original packages of
cigarettes sold to licensed retailers.
    (d) Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to the
person requesting the hearing of the time and place fixed for
the hearing and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to that person. In the absence of a
protest and request for a hearing within 20 days, the
Department's decision shall become final without any further
determination being made or notice given.
(Source: P.A. 97-587, eff. 8-26-11.)
 
    (35 ILCS 130/4g new)
    Sec. 4g. Retailer's license. Beginning on January 1, 2016,
no person may engage in business as a retailer of cigarettes in
this State without first having obtained a license from the
Department. Application for license shall be made to the
Department, by electronic means, in a form prescribed by the
Department. Each applicant for a license under this Section
shall furnish to the Department, in an electronic format
established by the Department, the following information:
        (1) the name and address of the applicant;
        (2) the address of the location at which the applicant
    proposes to engage in business as a retailer of cigarettes
    in this State; and
        (3) such other additional information as the
    Department may lawfully require by its rules and
    regulations.
    The annual license fee payable to the Department for each
retailer's license shall be $75. The fee shall be deposited
into the Tax Compliance and Administration Fund and shall be
for the cost of tobacco retail inspection and contraband
tobacco and tobacco smuggling with at least two-thirds of the
money being used for contraband tobacco and tobacco smuggling
operations and enforcement.
    Each applicant for a license shall pay the fee to the
Department at the time of submitting its application for a
license to the Department. The Department shall require an
applicant for a license under this Section to electronically
file and pay the fee.
    A separate annual license fee shall be paid for each place
of business at which a person who is required to procure a
retailer's license under this Section proposes to engage in
business as a retailer in Illinois under this Act.
    The following are ineligible to receive a retailer's
license under this Act:
        (1) a person who has been convicted of a felony related
    to the illegal transportation, sale, or distribution of
    cigarettes, or a tobacco-related felony, under any federal
    or State law, if the Department, after investigation and a
    hearing if requested by the applicant, determines that the
    person has not been sufficiently rehabilitated to warrant
    the public trust; or
        (2) a corporation, if any officer, manager, or director
    thereof, or any stockholder or stockholders owning in the
    aggregate more than 5% of the stock of such corporation,
    would not be eligible to receive a license under this Act
    for any reason.
    The Department, upon receipt of an application and license
fee, in proper form, from a person who is eligible to receive a
retailer's license under this Act, shall issue to such
applicant a license in form as prescribed by the Department.
That license shall permit the applicant to whom it is issued to
engage in business as a retailer under this Act at the place
shown in his or her application. All licenses issued by the
Department under this Section shall be valid for a period not
to exceed one year after issuance unless sooner revoked,
canceled, or suspended as provided in this Act. No license
issued under this Section is transferable or assignable. The
license shall be conspicuously displayed in the place of
business conducted by the licensee in Illinois under such
license. The Department shall not issue a retailer's license to
a retailer unless the retailer is also registered under the
Retailers' Occupation Tax Act. A person who obtains a license
as a retailer who ceases to do business as specified in the
license, or who never commenced business, or who obtains a
distributor's license, or whose license is suspended or
revoked, shall immediately surrender the license to the
Department.
    Any person aggrieved by any decision of the Department
under this subsection may, within 30 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give written notice
to the person requesting the hearing of the time and place
fixed for the hearing and shall hold a hearing in conformity
with the provisions of this Act and then issue its final
administrative decision in the matter to that person. In the
absence of a protest and request for a hearing within 30 days,
the Department's decision shall become final without any
further determination being made or notice given.
 
    (35 ILCS 130/4h new)
    Sec. 4h. Purchases of cigarettes by licensed retailers. A
person who possesses a retailer's license under Section 4g of
this Act shall obtain cigarettes for sale only from a licensed
distributor, secondary distributor, or manufacturer
representative.
 
    (35 ILCS 130/6)  (from Ch. 120, par. 453.6)
    Sec. 6. Revocation, cancellation, or suspension of
license. The Department may, after notice and hearing as
provided for by this Act, revoke, cancel or suspend the license
of any distributor, or secondary distributor, or retailer for
the violation of any provision of this Act, or for
noncompliance with any provision herein contained, or for any
noncompliance with any lawful rule or regulation promulgated by
the Department under Section 8 of this Act, or because the
licensee is determined to be ineligible for a distributor's
license for any one or more of the reasons provided for in
Section 4 of this Act, or because the licensee is determined to
be ineligible for a secondary distributor's license for any one
or more of the reasons provided for in Section 4c of this Act,
or because the licensee is determined to be ineligible for a
retailer's license for any one or more of the reasons provided
for in Section 4g of this Act. However, no such license shall
be revoked, cancelled or suspended, except after a hearing by
the Department with notice to the distributor, or secondary
distributor, or retailer, as aforesaid, and affording such
distributor, or secondary distributor, or retailer a
reasonable opportunity to appear and defend, and any
distributor, or secondary distributor, or retailer aggrieved
by any decision of the Department with respect thereto may have
the determination of the Department judicially reviewed, as
herein provided.
    The Department may revoke, cancel, or suspend the license
of any distributor for a violation of the Tobacco Product
Manufacturers' Escrow Enforcement Act as provided in Section 30
of that Act. The Department may revoke, cancel, or suspend the
license of any secondary distributor for a violation of
subsection (e) of Section 15 of the Tobacco Product
Manufacturers' Escrow Enforcement Act.
    If the retailer has a training program that facilitates
compliance with minimum-age tobacco laws, the Department shall
suspend for 3 days the license of that retailer for a fourth or
subsequent violation of the Prevention of Tobacco Use by Minors
and Sale and Distribution of Tobacco Products Act, as provided
in subsection (a) of Section 2 of that Act. For the purposes of
this Section, any violation of subsection (a) of Section 2 of
the Prevention of Tobacco Use by Minors and Sale and
Distribution of Tobacco Products Act occurring at the
retailer's licensed location during a 24-month period shall be
counted as a violation against the retailer.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 3 days the license of that
retailer for a second violation of the Prevention of Tobacco
Use by Minors and Sale and Distribution of Tobacco Products
Act, as provided in subsection (a-5) of Section 2 of that Act.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 7 days the license of that
retailer for a third violation of the Prevention of Tobacco Use
by Minors and Sale and Distribution of Tobacco Products Act, as
provided in subsection (a-5) of Section 2 of that Act.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 30 days the license of a retailer
for a fourth or subsequent violation of the Prevention of
Tobacco Use by Minors and Sale and Distribution of Tobacco
Products Act, as provided in subsection (a-5) of Section 2 of
that Act.
    A training program that facilitates compliance with
minimum-age tobacco laws must include at least the following
elements: (i) it must explain that only individuals displaying
valid identification demonstrating that they are 18 years of
age or older shall be eligible to purchase cigarettes or
tobacco products; (ii) it must explain where a clerk can check
identification for a date of birth; and (iii) it must explain
the penalties that a clerk and retailer are subject to for
violations of the Prevention of Tobacco Use by Minors and Sale
and Distribution of Tobacco Products Act.
    Any distributor, or secondary distributor, or retailer
aggrieved by any decision of the Department under this Section
may, within 20 days after notice of the decision, protest and
request a hearing. Upon receiving a request for a hearing, the
Department shall give notice in writing to the distributor, or
secondary distributor, or retailer requesting the hearing that
contains a statement of the charges preferred against the
distributor, or secondary distributor, or retailer and that
states the time and place fixed for the hearing. The Department
shall hold the hearing in conformity with the provisions of
this Act and then issue its final administrative decision in
the matter to the distributor, or secondary distributor, or
retailer. In the absence of a protest and request for a hearing
within 20 days, the Department's decision shall become final
without any further determination being made or notice given.
    No license so revoked, as aforesaid, shall be reissued to
any such distributor, or secondary distributor, or retailer
within a period of 6 months after the date of the final
determination of such revocation. No such license shall be
reissued at all so long as the person who would receive the
license is ineligible to receive a distributor's license under
this Act for any one or more of the reasons provided for in
Section 4 of this Act, or is ineligible to receive a secondary
distributor's license under this Act for any one or more of the
reasons provided for in Section 4c of this Act, or is
determined to be ineligible for a retailer's license under the
Act for any one or more of the reasons provided for in Section
4g of this Act.
    The Department upon complaint filed in the circuit court
may by injunction restrain any person who fails, or refuses, to
comply with any of the provisions of this Act from acting as a
distributor, or secondary distributor, or retailer of
cigarettes in this State.
(Source: P.A. 96-1027, eff. 7-12-10.)
 
    (35 ILCS 130/7)  (from Ch. 120, par. 453.7)
    Sec. 7. The Department or any officer or employee of the
Department designated, in writing, by the Director thereof,
shall at its or his or her own instance, or on the written
request of any distributor, secondary distributor, retailer,
manufacturer with authority to maintain manufacturer
representatives, or other interested party to the proceeding,
issue subpoenas requiring the attendance of and the giving of
testimony by witnesses, and subpoenas duces tecum requiring the
production of books, papers, records or memoranda. All
subpoenas and subpoenas duces tecum issued under the terms of
this Act may be served by any person of full age. The fees of
witnesses for attendance and travel shall be the same as the
fees of witnesses before the circuit court of this State; such
fees to be paid when the witness is excused from further
attendance. When the witness is subpoenaed at the instance of
the Department or any officer or employee thereof, such fees
shall be paid in the same manner as other expenses of the
Department, and when the witness is subpoenaed at the instance
of any other party to any such proceeding, the cost of service
of the subpoena or subpoena duces tecum and the fee of the
witness shall be borne by the party at whose instance the
witness is summoned. In such case the Department, in its
discretion, may require a deposit to cover the cost of such
service and witness fees. A subpoena or subpoena duces tecum so
issued shall be served in the same manner as a subpoena or
subpoena duces tecum issued out of a court.
    Any circuit court of this State, upon the application of
the Department or any officer or employee thereof, or upon the
application of any other party to the proceeding, may, in its
discretion, compel the attendance of witnesses, the production
of books, papers, records or memoranda and the giving of
testimony before the Department or any officer or employee
thereof conducting an investigation or holding a hearing
authorized by this Act, by an attachment for contempt, or
otherwise, in the same manner as production of evidence may be
compelled before the court.
    The Department or any officer or employee thereof, or any
other party in an investigation or hearing before the
Department, may cause the depositions of witnesses within the
State to be taken in the manner prescribed by law for like
depositions, or depositions for discovery in civil actions in
courts of this State, and to that end compel the attendance of
witnesses and the production of books, papers, records or
memoranda, in the same manner hereinbefore provided.
(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)
 
    (35 ILCS 130/8)  (from Ch. 120, par. 453.8)
    Sec. 8. The Department may make, promulgate and enforce
such reasonable rules and regulations relating to the
administration and enforcement of this Act as may be deemed
expedient.
    Whenever notice is required by this Act, such notice may be
given by United States certified or registered mail, addressed
to the person concerned at his last known address, and proof of
such mailing shall be sufficient for the purposes of this Act.
Notice of any hearing provided for by this Act and held before
the Department shall be so given not less than 7 days prior to
the day fixed for the hearing.
    Hearings provided for in this Act, other than hearings
before the Illinois Independent Tax Tribunal, shall be held:
        (1) In Cook County, if the taxpayer's or licensee's
    principal place of business is in that county;
        (2) At the Department's office nearest the taxpayer's
    or licensee's principal place of business, if the
    taxpayer's or licensee's principal place of business is in
    Illinois but outside Cook County;
        (3) In Sangamon County, if the taxpayer's or licensee's
    principal place of business is outside Illinois.
    The Circuit Court of the County wherein the hearing is held
has power to review all final administrative decisions of the
Department in administering this Act. The provisions of the
Administrative Review Law, and all amendments and
modifications thereof, and the rules adopted pursuant thereto,
shall apply to and govern all proceedings for the judicial
review of final administrative decisions of the Department
under this Act. The term "administrative decision" is defined
as in Section 3-101 of the Code of Civil Procedure.
    Service upon the Director of Revenue or Assistant Director
of Revenue of summons issued in any action to review a final
administrative decision shall be service upon the Department.
The Department shall certify the record of its proceedings if
the distributor, secondary distributor, retailer, or
manufacturer with authority to maintain manufacturer
representatives pays to it the sum of 75 per page of testimony
taken before the Department and 25 per page of all other
matters contained in such record, except that these charges may
be waived where the Department is satisfied that the aggrieved
party is a poor person who cannot afford to pay such charges.
Before the delivery of such record to the person applying for
it, payment of these charges must be made, and if the record is
not paid for within 30 days after notice that such record is
available, the complaint may be dismissed by the court upon
motion of the Department.
    No stay order shall be entered by the Circuit Court unless
the distributor, secondary distributor, retailer, or
manufacturer with authority to maintain manufacturer
representatives files with the court a bond in an amount fixed
and approved by the court, to indemnify the State against all
loss and injury which may be sustained by it on account of the
review proceedings and to secure all costs which may be
occasioned by such proceedings.
    Whenever any proceeding provided by this Act is begun
before the Department, either by the Department or by a person
subject to this Act, and such person thereafter dies or becomes
a person under legal disability before such proceeding is
concluded, the legal representative of the deceased person or
of the person under legal disability shall notify the
Department of such death or legal disability. Such legal
representative, as such, shall then be substituted by the
Department for such person. If the legal representative fails
to notify the Department of his or her appointment as such
legal representative, the Department may, upon its own motion,
substitute such legal representative in the proceeding pending
before the Department for the person who died or became a
person under legal disability.
    Hearings to contest an administrative decision under this
Act conducted as a result of a protest filed with the Illinois
Independent Tax Tribunal on or after July 1, 2013 shall be
conducted pursuant to the provisions of the Illinois
Independent Tax Tribunal Act of 2012.
(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11;
97-1129, eff. 8-28-12.)
 
    (35 ILCS 130/10)  (from Ch. 120, par. 453.10)
    Sec. 10. The Department, or any officer or employee
designated in writing by the Director thereof, for the purpose
of administering and enforcing the provisions of this Act, may
hold investigations and, except as otherwise provided in the
Illinois Independent Tax Tribunal Act of 2012, may hold
hearings concerning any matters covered by this Act, and may
examine books, papers, records or memoranda bearing upon the
sale or other disposition of cigarettes by a distributor,
secondary distributor, retailer, manufacturer with authority
to maintain manufacturer representatives under Section 4f of
this Act, or manufacturer representative, and may issue
subpoenas requiring the attendance of a distributor, secondary
distributor, retailer, manufacturer with authority to maintain
manufacturer representatives under Section 4f of this Act, or
manufacturer representative, or any officer or employee of a
distributor, secondary distributor, retailer, manufacturer
with authority to maintain manufacturer representatives under
Section 4f of this Act, or any person having knowledge of the
facts, and may take testimony and require proof, and may issue
subpoenas duces tecum to compel the production of relevant
books, papers, records and memoranda, for the information of
the Department.
    All hearings to contest administrative decisions of the
Department conducted as a result of a protest filed with the
Illinois Independent Tax Tribunal on or after July 1, 2013
shall be subject to the provisions of the Illinois Independent
Tax Tribunal Act of 2012.
    In the conduct of any investigation or hearing provided for
by this Act, neither the Department, nor any officer or
employee thereof, shall be bound by the technical rules of
evidence, and no informality in the proceedings nor in the
manner of taking testimony shall invalidate any rule, order,
decision or regulation made, approved or confirmed by the
Department.
    The Director of Revenue, or any duly authorized officer or
employee of the Department, shall have the power to administer
oaths to such persons required by this Act to give testimony
before the said Department.
    The books, papers, records and memoranda of the Department,
or parts thereof, may be proved in any hearing, investigation
or legal proceeding by a reproduced copy thereof under the
certificate of the Director of Revenue. Such reproduced copy
shall, without further proof, be admitted into evidence before
the Department or in any legal proceeding.
(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11;
97-1129, eff. 8-28-12.)
 
    (35 ILCS 130/11)  (from Ch. 120, par. 453.11)
    Sec. 11. Every distributor of cigarettes, who is required
to procure a license under this Act, shall keep within
Illinois, at his licensed address, complete and accurate
records of cigarettes held, purchased, manufactured, brought
in or caused to be brought in from without the State, and sold,
or otherwise disposed of, and shall preserve and keep within
Illinois at his licensed address all invoices, bills of lading,
sales records, copies of bills of sale, inventory at the close
of each period for which a return is required of all cigarettes
on hand and of all cigarette revenue stamps, both affixed and
unaffixed, and other pertinent papers and documents relating to
the manufacture, purchase, sale or disposition of cigarettes.
Every sales invoice issued by a licensed distributor to a
retailer in this State shall contain the distributor's
cigarette distributor license number. All books and records and
other papers and documents that are required by this Act to be
kept shall be kept in the English language, and shall, at all
times during the usual business hours of the day, be subject to
inspection by the Department or its duly authorized agents and
employees. The Department may adopt rules that establish
requirements, including record forms and formats, for records
required to be kept and maintained by taxpayers. For purposes
of this Section, "records" means all data maintained by the
taxpayer, including data on paper, microfilm, microfiche or any
type of machine-sensible data compilation. Those books,
records, papers and documents shall be preserved for a period
of at least 3 years after the date of the documents, or the
date of the entries appearing in the records, unless the
Department, in writing, authorizes their destruction or
disposal at an earlier date. At all times during the usual
business hours of the day any duly authorized agent or employee
of the Department may enter any place of business of the
distributor, without a search warrant, and inspect the premises
and the stock or packages of cigarettes and the vending devices
therein contained, to determine whether any of the provisions
of this Act are being violated. If such agent or employee is
denied free access or is hindered or interfered with in making
such examination as herein provided, the license of the
distributor at such premises shall be subject to revocation by
the Department.
(Source: P.A. 88-480.)
 
    (35 ILCS 130/11a)
    Sec. 11a. Secondary distributors; records. Every secondary
distributor of cigarettes, who is required to procure a license
under this Act, shall keep within Illinois, at his licensed
address, complete and accurate records of cigarettes held,
purchased, brought in from without the State, and sold, or
otherwise disposed of, and shall preserve and keep within
Illinois at his licensed address all invoices, bills of lading,
sales records, copies of bills of sale, inventory at the close
of each period for which a report is required of all cigarettes
on hand, and other pertinent papers and documents relating to
the purchase, sale, or disposition of cigarettes. Every sales
invoice issued by a secondary distributor to a retailer in this
State shall contain the distributor's secondary distributor
license number. All books and records and other papers and
documents that are required by this Act to be kept shall be
kept in the English language, and shall, at all times during
the usual business hours of the day, be subject to inspection
by the Department or its duly authorized agents and employees.
The Department may adopt rules that establish requirements,
including record forms and formats, for records required to be
kept and maintained by secondary distributors. For purposes of
this Section, "records" means all data maintained by the
secondary distributors, including data on paper, microfilm,
microfiche or any type of machine sensible data compilation.
Those books, records, papers, and documents shall be preserved
for a period of at least 3 years after the date of the
documents, or the date of the entries appearing in the records,
unless the Department, in writing, authorizes their
destruction or disposal at an earlier date. At all times during
the usual business hours of the day any duly authorized agent
or employee of the Department may enter any place of business
of the secondary distributor without a search warrant and may
inspect the premises and the stock or packages of cigarettes
therein contained to determine whether any of the provisions of
this Act are being violated. If such agent or employee is
denied free access or is hindered or interfered with in making
such examination as herein provided, the license of the
secondary distributor at such premises shall be subject to
revocation by the Department.
(Source: P.A. 96-1027, eff. 7-12-10.)
 
    (35 ILCS 130/11b)
    Sec. 11b. Manufacturer representatives; records. Every
manufacturer with authority to maintain manufacturer
representatives under Section 4f of this Act shall keep within
Illinois, at his business address identified under Section 4f
of this Act, complete and accurate records of cigarettes
purchased, sold, or otherwise disposed of, and shall preserve
and keep within Illinois at his business address all invoices,
sales records, copies of bills of sale, inventory at the close
of each period for which a report is required of all cigarettes
on hand, and other pertinent papers and documents relating to
the purchase, sale, or disposition of cigarettes. Every sales
invoice issued by a manufacturer representative to a retailer
in this State shall contain the manufacturer's manufacturer
representative license number. All books and records and other
papers and documents that are required by this Act to be kept
shall be kept in the English language, and shall, at all times
during the usual business hours of the day, be subject to
inspection by the Department or its duly authorized agents and
employees. The Department may adopt rules that establish
requirements, including record forms and formats, for records
required to be kept and maintained by manufacturers with
authority to maintain manufacturer representatives under
Section 4f of this Act and their manufacturer representatives.
For purposes of this Section, "records" means all data
maintained by the manufacturers with authority to maintain
manufacturer representatives under Section 4f of this Act and
their manufacturer representatives, including data on paper,
microfilm, microfiche or any type of machine sensible data
compilation. Those books, records, papers, and documents shall
be preserved for a period of at least 3 years after the date of
the documents, or the date of the entries appearing in the
records, unless the Department, in writing, authorizes their
destruction or disposal at an earlier date. At all times during
the usual business hours of the day, any duly authorized agent
or employee of the Department may enter any place of business
of the manufacturers with authority to maintain manufacturer
representatives under Section 4f of this Act and their
manufacturer representatives, or inspect any motor vehicle
used by a manufacturer representative in the course of
business, without a search warrant and may inspect the
premises, motor vehicle, and any packages of cigarettes therein
contained to determine whether any of the provisions of this
Act are being violated. If such agent or employee is denied
free access or is hindered or interfered with in making such
examination as herein provided, the ability to maintain
marketing representatives in Illinois may be withdrawn by the
Department.
(Source: P.A. 97-587, eff. 8-26-11.)
 
    (35 ILCS 130/11c new)
    Sec. 11c. Retailers; records. Every retailer who is
required to procure a license under this Act shall keep within
Illinois complete and accurate records of cigarettes
purchased, sold, or otherwise disposed of. It shall be the duty
of every retail licensee to make sales records, copies of bills
of sale, and inventory at the close of each period for which a
report is required of all cigarettes on hand available upon
reasonable notice for the purpose of investigation and control
by the Department. Such records need not be maintained on the
licensed premises, but must be maintained in the State of
Illinois; however, if access is available electronically, the
records may be maintained out of state. However, all original
invoices or copies thereof covering purchases of cigarettes
must be retained on the licensed premises for a period of 90
days after such purchase, unless the Department has granted a
waiver in response to a written request in cases where records
are kept at a central business location within the State of
Illinois or in cases where records that are available
electronically are maintained out of state. The Department may
adopt rules that establish requirements, including record
forms and formats, for records required to be kept and
maintained by the retailer.
    For purposes of this Section, "records" means all data
maintained by the retailer, including data on paper, microfilm,
microfiche or any type of machine sensible data compilation.
Those books, records, papers, and documents shall be preserved
for a period of at least 3 years after the date of the
documents, or the date of the entries appearing in the records,
unless the Department, in writing, authorizes their
destruction or disposal at an earlier date. At all times during
the usual business hours of the day, any duly authorized agent
or employee of the Department may enter any place of business
of the retailer without a search warrant and may inspect the
premises to determine whether any of the provisions of this Act
are being violated. If such agent or employee is denied free
access or is hindered or interfered with in making such
examination as herein provided, the license of the retailer
shall be subject to suspension or revocation by the Department.
 
    (35 ILCS 130/23)  (from Ch. 120, par. 453.23)
    Sec. 23. Every distributor, secondary distributor,
retailer, manufacturer with authority to maintain manufacturer
representatives under Section 4f of this Act and their
manufacturer representatives, or other person who shall
knowingly and wilfully sell or offer for sale any original
package, as defined in this Act, having affixed thereto any
fraudulent, spurious, imitation or counterfeit stamp, or stamp
which has been previously affixed, or affixes a stamp which has
previously been affixed to an original package, or who shall
knowingly and wilfully sell or offer for sale any original
package, as defined in this Act, having imprinted thereon
underneath the sealed transparent wrapper thereof any
fraudulent, spurious, imitation or counterfeit tax imprint,
shall be deemed guilty of a Class 2 felony.
(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)
 
    (35 ILCS 130/24)  (from Ch. 120, par. 453.24)
    Sec. 24. Punishment for sale or possession of packages of
contraband cigarettes.
    (a) Possession or sale of 100 or less packages of
contraband cigarettes. With the exception of licensed
distributors, licensed secondary distributors, or licensed
transporters, as defined in Section 9c of this Act, any person
who has in his or her possession or sells 100 or less original
packages of contraband cigarettes is guilty of a Class A
misdemeanor and a Class 4 felony for each subsequent offense
occurring within 12 months of a prior offense.
    (b) Possession or sale of more than 100 but less than 251
packages of contraband cigarettes. With the exception of
licensed distributors, licensed secondary distributors, or
licensed transporters, as defined in Section 9c of this Act,
any person who has in his or her possession or sells more than
100 but less than 251 original packages of contraband
cigarettes is guilty of a Class A misdemeanor for a first
offense and a Class 4 felony for each subsequent offense.
    (c) Possession or sale of more than 250 but less than 1,001
packages of contraband cigarettes. With the exception of
licensed distributors, licensed secondary distributors, or
licensed transporters, as defined in Section 9c of this Act,
any person who has in his or her possession or sells more than
250 but less than 1,001 original packages of contraband
cigarettes is guilty of a Class 4 felony.
    (d) Possession or sale of more than 1,000 packages of
contraband cigarettes. With the exception of licensed
distributors, licensed secondary distributors, or licensed
transporters, as defined in Section 9c of this Act, any person
who has in his or her possession or sells more than 1,000
original packages of contraband cigarettes is guilty of a Class
3 felony.
    (e) Any person licensed as a distributor, secondary
distributor, or transporter, as defined in Section 9c of this
Act, who has in his or her possession or sells 100 or less
original packages of contraband cigarettes is guilty of a Class
A misdemeanor and a Class 4 felony for each subsequent offense
occurring within 12 months of a prior offense.
    (f) Any person licensed as a distributor, secondary
distributor, or transporter, as defined in Section 9c of this
Act, who has in his or her possession or sells more than 100
original packages of contraband cigarettes is guilty of a Class
4 felony.
    (g) Notwithstanding subsections (e) through (f), licensed
distributors and transporters, as defined in Section 9c of this
Act, may possess unstamped packages of cigarettes.
Notwithstanding subsections (e) through (f), licensed
distributors may possess cigarettes that bear a tax stamp of
another state or taxing jurisdiction. Notwithstanding
subsections (e) through (f), a licensed distributor or licensed
secondary distributor may possess contraband cigarettes
returned to the distributor or licensed secondary distributor
by a retailer if the distributor or licensed secondary
distributor immediately conducts an inventory of the
cigarettes being returned, the distributor or licensed
secondary distributor and the retailer returning the
contraband cigarettes sign the inventory, the distributor or
licensed secondary distributor provides a copy of the signed
inventory to the retailer, and the distributor retains the
inventory in its books and records and promptly notifies the
Department of Revenue.
    (h) Notwithstanding subsections (a) through (d) of this
Section, a retailer unknowingly possessing contraband
cigarettes obtained from a licensed distributor or licensed
secondary distributor or knowingly possessing contraband
cigarettes obtained from a licensed distributor is not subject
to penalties under this Section if the retailer, within 48
hours after discovering that the cigarettes are contraband
cigarettes, excluding Saturdays, Sundays, and holidays: (i)
notifies the Department and the licensed distributor or
licensed secondary distributor from whom the cigarettes were
obtained, orally and in writing, that he or she possesses
contraband cigarettes obtained from a licensed distributor or
licensed secondary distributor; (ii) places the contraband
cigarettes in one or more containers and seals those
containers; and (iii) places on the containers the following or
similar language: "Contraband Cigarettes. Not For Sale." All
contraband cigarettes in the possession of a retailer remain
subject to forfeiture under the provisions of this Act.
    Any retailer who knowingly possesses packages of
cigarettes with a counterfeit stamp with intent to sell is
guilty of a Class 2 felony. Any retailer who knowingly
possesses unstamped packages of cigarettes with intent to sell
is guilty of a Class 4 felony. A retailer shall not be liable
for unknowingly possessing, selling, or distributing to
consumers cigarettes that contain an old stamp if the correct
tax was collected at the point of sale and the cigarettes were
obtained from a distributor licensed under this Act.
(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
    (35 ILCS 130/26)  (from Ch. 120, par. 453.26)
    Sec. 26. Whoever acts as a distributor, or secondary
distributor, retailer, or manufacturer representative of
original packages without having a license, as required by this
Act, shall be guilty of a Class 4 felony.
(Source: P.A. 96-1027, eff. 7-12-10.)
 
    Section 15. The Cigarette Use Tax Act is amended by
changing Sections 3-10, 4d, 4e, 28, and 30 as follows:
 
    (35 ILCS 135/3-10)
    Sec. 3-10. Cigarette enforcement.
    (a) Prohibitions. It is unlawful for any person:
        (1) to sell or distribute in this State; to acquire,
    hold, own, possess, or transport, for sale or distribution
    in this State; or to import, or cause to be imported into
    this State for sale or distribution in this State:
            (A) any cigarettes the package of which:
                (i) bears any statement, label, stamp,
            sticker, or notice indicating that the
            manufacturer did not intend the cigarettes to be
            sold, distributed, or used in the United States,
            including but not limited to labels stating "For
            Export Only", "U.S. Tax Exempt", "For Use Outside
            U.S.", or similar wording; or
                (ii) does not comply with:
                    (aa) all requirements imposed by or
                pursuant to federal law regarding warnings and
                other information on packages of cigarettes
                manufactured, packaged, or imported for sale,
                distribution, or use in the United States,
                including but not limited to the precise
                warning labels specified in the federal
                Cigarette Labeling and Advertising Act, 15
                U.S.C. 1333; and
                    (bb) all federal trademark and copyright
                laws;
            (B) any cigarettes imported into the United States
        in violation of 26 U.S.C. 5754 or any other federal
        law, or implementing federal regulations;
            (C) any cigarettes that such person otherwise
        knows or has reason to know the manufacturer did not
        intend to be sold, distributed, or used in the United
        States; or
            (D) any cigarettes for which there has not been
        submitted to the Secretary of the U.S. Department of
        Health and Human Services the list or lists of the
        ingredients added to tobacco in the manufacture of the
        cigarettes required by the federal Cigarette Labeling
        and Advertising Act, 15 U.S.C. 1335a;
        (2) to alter the package of any cigarettes, prior to
    sale or distribution to the ultimate consumer, so as to
    remove, conceal, or obscure:
            (A) any statement, label, stamp, sticker, or
        notice described in subdivision (a)(1)(A)(i) of this
        Section;
            (B) any health warning that is not specified in, or
        does not conform with the requirements of, the federal
        Cigarette Labeling and Advertising Act, 15 U.S.C.
        1333; or
        (3) to affix any stamp required pursuant to this Act to
    the package of any cigarettes described in subdivision
    (a)(1) of this Section or altered in violation of
    subdivision (a)(2).
    (b) Documentation. On the first business day of each month,
each person licensed to affix the State tax stamp to cigarettes
shall file with the Department, for all cigarettes imported
into the United States to which the person has affixed the tax
stamp in the preceding month:
        (1) a copy of:
            (A) the permit issued pursuant to the Internal
        Revenue Code, 26 U.S.C. 5713, to the person importing
        the cigarettes into the United States allowing the
        person to import the cigarettes; and
            (B) the customs form containing, with respect to
        the cigarettes, the internal revenue tax information
        required by the U.S. Bureau of Alcohol, Tobacco and
        Firearms;
        (2) a statement, signed by the person under penalty of
    perjury, which shall be treated as confidential by the
    Department and exempt from disclosure under the Freedom of
    Information Act, identifying the brand and brand styles of
    all such cigarettes, the quantity of each brand style of
    such cigarettes, the supplier of such cigarettes, and the
    person or persons, if any, to whom such cigarettes have
    been conveyed for resale; and a separate statement, signed
    by the individual under penalty of perjury, which shall not
    be treated as confidential or exempt from disclosure,
    separately identifying the brands and brand styles of such
    cigarettes; and
        (3) a statement, signed by an officer of the
    manufacturer or importer under penalty of perjury,
    certifying that the manufacturer or importer has complied
    with:
            (A) the package health warning and ingredient
        reporting requirements of the federal Cigarette
        Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
        with respect to such cigarettes; and
            (B) the provisions of Exhibit T of the Master
        Settlement Agreement entered in the case of People of
        the State of Illinois v. Philip Morris, et al. (Circuit
        Court of Cook County, No. 96-L13146), including a
        statement indicating whether the manufacturer is, or
        is not, a participating tobacco manufacturer within
        the meaning of Exhibit T.
    (c) Administrative sanctions.
        (1) Upon finding that a distributor, secondary
    distributor, retailer, or a person has committed any of the
    acts prohibited by subsection (a), knowing or having reason
    to know that he or she has done so, or upon finding that a
    distributor or person has failed to comply with any
    requirement of subsection (b), the Department may revoke or
    suspend the license or licenses of any distributor,
    retailer, or secondary distributor pursuant to the
    procedures set forth in Section 6 and impose on the
    distributor, secondary distributor, retailer, or person, a
    civil penalty in an amount not to exceed the greater of
    500% of the retail value of the cigarettes involved or
    $5,000.
        (2) Cigarettes that are acquired, held, owned,
    possessed, transported in, imported into, or sold or
    distributed in this State in violation of this Section
    shall be deemed contraband under this Act and are subject
    to seizure and forfeiture as provided in this Act, and all
    such cigarettes seized and forfeited shall be destroyed or
    maintained and used in an undercover capacity. Such
    cigarettes shall be deemed contraband whether the
    violation of this Section is knowing or otherwise.
    (d) Unfair trade practices. In addition to any other
penalties provided for in this Act, a violation of subsection
(a) or subsection (b) of this Section shall constitute an
unlawful practice as provided in the Consumer Fraud and
Deceptive Business Practices Act.
    (d-1) Retailers who are licensed under Section 4g of the
Cigarette Tax Act and secondary distributors shall not be
liable under subsections (c)(1) and (d) of this Section for
unknowingly possessing, selling, or distributing to consumers
or users cigarettes identified in subsection (a)(1) of this
Section if the cigarettes possessed, sold, or distributed by
the licensed retailer were obtained from a distributor or
secondary distributor licensed under this Act or the Cigarette
Tax Act.
    (d-2) Criminal Penalties. A distributor, secondary
distributor, retailer, or person who violates subsection (a),
or a distributor, secondary distributor, or person who violates
subsection (b) of this Section shall be guilty of a Class 4
felony.
    (e) Unfair cigarette sales. For purposes of the Trademark
Registration and Protection Act and the Counterfeit Trademark
Act, cigarettes imported or reimported into the United States
for sale or distribution under any trade name, trade dress, or
trademark that is the same as, or is confusingly similar to,
any trade name, trade dress, or trademark used for cigarettes
manufactured in the United States for sale or distribution in
the United States shall be presumed to have been purchased
outside of the ordinary channels of trade.
    (f) General provisions.
        (1) This Section shall be enforced by the Department;
    provided that, at the request of the Director of Revenue or
    the Director's duly authorized agent, the State police and
    all local police authorities shall enforce the provisions
    of this Section. The Attorney General has concurrent power
    with the State's Attorney of any county to enforce this
    Section.
        (2) For the purpose of enforcing this Section, the
    Director of Revenue and any agency to which the Director
    has delegated enforcement responsibility pursuant to
    subdivision (f)(1) may request information from any State
    or local agency and may share information with and request
    information from any federal agency and any agency of any
    other state or any local agency of any other state.
        (3) In addition to any other remedy provided by law,
    including enforcement as provided in subdivision (f)
    (a)(1), any person may bring an action for appropriate
    injunctive or other equitable relief for a violation of
    this Section; actual damages, if any, sustained by reason
    of the violation; and, as determined by the court, interest
    on the damages from the date of the complaint, taxable
    costs, and reasonable attorney's fees. If the trier of fact
    finds that the violation is flagrant, it may increase
    recovery to an amount not in excess of 3 times the actual
    damages sustained by reason of the violation.
    (g) Definitions. As used in this Section:
    "Importer" means that term as defined in 26 U.S.C. 5702(1).
    "Package" means that term as defined in 15 U.S.C. 1332(4).
    (h) Applicability.
        (1) This Section does not apply to:
            (A) cigarettes allowed to be imported or brought
        into the United States for personal use; and
            (B) cigarettes sold or intended to be sold as
        duty-free merchandise by a duty-free sales enterprise
        in accordance with the provisions of 19 U.S.C. 1555(b)
        and any implementing regulations; except that this
        Section shall apply to any such cigarettes that are
        brought back into the customs territory for resale
        within the customs territory.
        (2) The penalties provided in this Section are in
    addition to any other penalties imposed under other
    provision of law.
(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10;
96-1027, eff. 7-12-10.)
 
    (35 ILCS 135/4d)
    Sec. 4d. Sales of cigarettes to and by retailers. In-state
makers, manufacturers, or fabricators licensed as distributors
under Section 4 of this Act and out-of-state makers,
manufacturers, or fabricators holding permits under Section 7
of this Act may not sell original packages of cigarettes to
retailers. A retailer who is licensed under Section 4g of the
Cigarette Tax Act may sell only original packages of cigarettes
obtained from licensed secondary distributors or licensed
distributors other than in-state makers, manufacturers, or
fabricators licensed as distributors under Section 4 of this
Act and out-of-state makers, manufacturers, or fabricators
holding permits under Section 7 of this Act.
(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
    (35 ILCS 135/4e)
    Sec. 4e. Sales of cigarettes to and by secondary
distributors. In-state makers, manufacturers, and fabricators
licensed as distributors under Section 4 of this Act and
out-of-state makers, manufacturers, and fabricators holding
permits under Section 7 of this Act may not sell original
packages of cigarettes to secondary distributors. A secondary
distributor may sell only original packages of cigarettes
obtained from licensed distributors other than in-state
makers, manufacturers, or fabricators licensed as distributors
under Section 4 of this Act and out-of-state makers,
manufacturers, or fabricators holding permits under Section 7
of this Act. Secondary distributors may sell cigarettes to
Illinois retailers who are licensed under Section 4g of the
Cigarette Tax Act for resale, and are also authorized to make
retail sales of cigarettes at the location on the secondary
distributor's license as long as the secondary distributor
obtains a license under Section 4g of the Cigarette Tax Act and
sells 75% or more of the cigarettes sold at such location to
retailers who are licensed under Section 4g of the Cigarette
Tax Act for resale.
    All sales by secondary distributors to Illinois retailers
who are licensed under Section 4g of the Cigarette Tax Act must
be made at the location on the secondary distributor's license.
Retailers who are issued a license under Section 4g of the
Cigarette Tax Act must take possession of all cigarettes sold
by the secondary distributor at the secondary distributor's
licensed address. Secondary distributors may not make
deliveries of cigarettes to Illinois retailers who are licensed
under Section 4g of the Cigarette Tax Act.
    Secondary distributors may not file a claim for credit or
refund with the State under Section 14a of this Act.
(Source: P.A. 96-1027, eff. 7-12-10.)
 
    (35 ILCS 135/28)  (from Ch. 120, par. 453.58)
    Sec. 28. Any person who (a) falsely or fraudulently makes,
forges, alters or counterfeits any stamp provided for herein,
(b) causes or procures to be falsely or fraudulently made,
forged, altered or counterfeited any such stamp, (c) knowingly
and wilfully utters, publishes, passes or tenders as genuine
any such false, altered, forged or counterfeited stamp, (d)
falsely or fraudulently makes, forges, alters or counterfeits
any tax imprint on an original package of cigarettes inside a
sealed transparent wrapper, (e) causes or procures falsely or
fraudulently to be made, forged, altered or counterfeited any
such tax imprint or (f) knowingly and wilfully utters,
publishes, passes or tenders as genuine any such false,
altered, forged or counterfeited tax imprint, for the purpose
of evading the tax imposed by this Act, shall be guilty of a
Class 2 3 felony.
(Source: P.A. 77-2229.)
 
    (35 ILCS 135/30)  (from Ch. 120, par. 453.60)
    Sec. 30. Punishment for sale or possession of unstamped
packages of cigarettes, other than by a licensed distributor or
transporter.
    (a) Possession or sale of more than 9 but less than 101
unstamped packages of cigarettes. With the exception of
licensed distributors, licensed secondary distributors, or
licensed transporters, as defined in Section 9c of the
Cigarette Tax Act, any person who has in his or her possession
or sells more than 9 but less than 101 original packages of
contraband cigarettes is guilty of a Class A misdemeanor and a
Class 4 felony for each subsequent offense occurring within 12
months of a prior offense.
    (b) Possession or sale of more than 100 but less than 251
unstamped packages of cigarettes. With the exception of
licensed distributors, licensed secondary distributors, or
licensed transporters, as defined in Section 9c of the
Cigarette Tax Act, any person who has in his or her possession
or sells more than 100 but less than 251 original packages of
contraband cigarettes is guilty of a Class A misdemeanor for
the first offense and a Class 4 felony for each subsequent
offense.
    (c) Possession or sale of more than 250 but less than 1,001
unstamped packages of cigarettes. With the exception of
licensed distributors, licensed secondary distributors, or
licensed transporters, as defined in Section 9c of the
Cigarette Tax Act, any person who has in his or her possession
or sells more than 250 but less than 1,001 original packages of
contraband cigarettes is guilty of a Class 4 felony.
    (d) Possession or sale of more than 1,000 contraband
packages of cigarettes. With the exception of licensed
distributors, licensed secondary distributors, or licensed
transporters, as defined in Section 9c of the Cigarette Tax
Act, any person who has in his or her possession or sells, more
than 1,000 original packages of contraband cigarettes is guilty
of a Class 3 felony.
    (e) Any person licensed as a distributor, secondary
distributor, or transporter, as defined in Section 9c of the
Cigarette Tax Act, who has in his or her possession or sells
100 or less original packages of contraband cigarettes is
guilty of a Class A misdemeanor and a Class 4 felony for each
subsequent offense occurring within 12 months of a prior
offense.
    (f) Any person licensed as a distributor, secondary
distributor, or transporter, as defined in Section 9c of the
Cigarette Tax Act, who has in his or her possession or sells
more than 100 original packages of contraband cigarettes is
guilty of a Class 4 felony.
    (g) Notwithstanding subsections (e) through (f), licensed
distributors and transporters, as defined in Section 9c of the
Cigarette Tax Act, may possess unstamped packages of
cigarettes. Notwithstanding subsections (e) through (f),
licensed distributors may possess cigarettes that bear a tax
stamp of another state or taxing jurisdiction. Notwithstanding
subsections (e) through (f), a licensed distributor or licensed
secondary distributor may possess contraband cigarettes
returned to the distributor or licensed secondary distributor
by a retailer if the distributor or licensed secondary
distributor immediately conducts an inventory of the
cigarettes being returned, the distributor or licensed
secondary distributor and the retailer returning the
contraband cigarettes sign the inventory, the distributor or
licensed secondary distributor provides a copy of the signed
inventory to the retailer, and the distributor or licensed
secondary distributor retains the inventory in its books and
records and promptly notifies the Department of Revenue.
    (h) Notwithstanding subsections (a) through (d) of this
Section, a retailer unknowingly possessing contraband
cigarettes obtained from a licensed distributor or licensed
secondary distributor or knowingly possessing contraband
cigarettes obtained from a licensed distributor or licensed
secondary distributor is not subject to penalties under this
Section if the retailer, within 48 hours after discovering that
the cigarettes are contraband cigarettes, excluding Saturdays,
Sundays, and holidays: (i) notifies the Department and the
licensed distributor or licensed secondary distributor from
whom the cigarettes were obtained, orally and in writing, that
he or she possesses contraband cigarettes obtained from a
licensed distributor or licensed secondary distributor; (ii)
places the contraband cigarettes in one or more containers and
seals those containers; and (iii) places on the containers the
following or similar language: "Contraband Cigarettes. Not For
Sale." All contraband cigarettes in the possession of a
retailer remain subject to forfeiture under the provisions of
this Act.
    Any retailer who knowingly possesses packages of
cigarettes with a counterfeit stamp with intent to sell is
guilty of a Class 2 felony. Any retailer who knowingly
possesses unstamped packages of cigarettes with intent to sell
is guilty of a Class 4 felony. A retailer shall not be liable
for unknowingly possessing, selling, or distributing to
consumers cigarettes that contain an old stamp if the correct
tax was collected at the point of sale and the cigarettes were
obtained from a distributor licensed under this Act.
(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
    Section 20. The Tobacco Products Tax Act of 1995 is amended
by changing Sections 10-5, 10-20, 10-25, 10-35, and 10-50 and
by adding Sections 10-21, 10-22, 10-37, and 10-53 as follows:
 
    (35 ILCS 143/10-5)
    Sec. 10-5. Definitions. For purposes of this Act:
    "Business" means any trade, occupation, activity, or
enterprise engaged in, at any location whatsoever, for the
purpose of selling tobacco products.
    "Cigarette" has the meaning ascribed to the term in Section
1 of the Cigarette Tax Act.
    "Contraband little cigar" means:
        (1) packages of little cigars containing 20 or 25
    little cigars that do not bear a required tax stamp under
    this Act;
        (2) packages of little cigars containing 20 or 25
    little cigars that bear a fraudulent, imitation, or
    counterfeit tax stamp;
        (3) packages of little cigars containing 20 or 25
    little cigars that are improperly tax stamped, including
    packages of little cigars that bear only a tax stamp of
    another state or taxing jurisdiction; or
        (4) packages of little cigars containing other than 20
    or 25 little cigars in the possession of a distributor,
    retailer or wholesaler, unless the distributor, retailer,
    or wholesaler possesses, or produces within the time frame
    provided in Section 10-27 or 10-28 of this Act, an invoice
    from a stamping distributor, distributor, or wholesaler
    showing that the tax on the packages has been or will be
    paid.
    "Correctional Industries program" means a program run by a
State penal institution in which residents of the penal
institution produce tobacco products for sale to persons
incarcerated in penal institutions or resident patients of a
State operated mental health facility.
    "Department" means the Illinois Department of Revenue.
    "Distributor" means any of the following:
        (1) Any manufacturer or wholesaler in this State
    engaged in the business of selling tobacco products who
    sells, exchanges, or distributes tobacco products to
    retailers or consumers in this State.
        (2) Any manufacturer or wholesaler engaged in the
    business of selling tobacco products from without this
    State who sells, exchanges, distributes, ships, or
    transports tobacco products to retailers or consumers
    located in this State, so long as that manufacturer or
    wholesaler has or maintains within this State, directly or
    by subsidiary, an office, sales house, or other place of
    business, or any agent or other representative operating
    within this State under the authority of the person or
    subsidiary, irrespective of whether the place of business
    or agent or other representative is located here
    permanently or temporarily.
        (3) Any retailer who receives tobacco products on which
    the tax has not been or will not be paid by another
    distributor.
    "Distributor" does not include any person, wherever
resident or located, who makes, manufactures, or fabricates
tobacco products as part of a Correctional Industries program
for sale to residents incarcerated in penal institutions or
resident patients of a State operated mental health facility.
    "Little cigar" means and includes any roll, made wholly or
in part of tobacco, where such roll has an integrated cellulose
acetate filter and weighs less than 4 pounds per thousand and
the wrapper or cover of which is made in whole or in part of
tobacco.
    "Manufacturer" means any person, wherever resident or
located, who manufactures and sells tobacco products, except a
person who makes, manufactures, or fabricates tobacco products
as a part of a Correctional Industries program for sale to
persons incarcerated in penal institutions or resident
patients of a State operated mental health facility.
    Beginning on January 1, 2013, "moist snuff" means any
finely cut, ground, or powdered tobacco that is not intended to
be smoked, but shall not include any finely cut, ground, or
powdered tobacco that is intended to be placed in the nasal
cavity.
    "Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, limited
liability company, or public or private corporation, however
formed, or a receiver, executor, administrator, trustee,
conservator, or other representative appointed by order of any
court.
    "Place of business" means and includes any place where
tobacco products are sold or where tobacco products are
manufactured, stored, or kept for the purpose of sale or
consumption, including any vessel, vehicle, airplane, train,
or vending machine.
    "Retailer" means any person in this State engaged in the
business of selling tobacco products to consumers in this
State, regardless of quantity or number of sales.
    "Sale" means any transfer, exchange, or barter in any
manner or by any means whatsoever for a consideration and
includes all sales made by persons.
    "Stamp" or "stamps" mean the indicia required to be affixed
on a package of little cigars that evidence payment of the tax
on packages of little cigars containing 20 or 25 little cigars
under Section 10-10 of this Act. These stamps shall be the same
stamps used for cigarettes under the Cigarette Tax Act.
    "Stamping distributor" means a distributor licensed under
this Act and also licensed as a distributor under the Cigarette
Tax Act or Cigarette Use Tax Act.
    "Tobacco products" means any cigars, including little
cigars; cheroots; stogies; periques; granulated, plug cut,
crimp cut, ready rubbed, and other smoking tobacco; snuff
(including moist snuff) or snuff flour; cavendish; plug and
twist tobacco; fine-cut and other chewing tobaccos; shorts;
refuse scraps, clippings, cuttings, and sweeping of tobacco;
and other kinds and forms of tobacco, prepared in such manner
as to be suitable for chewing or smoking in a pipe or
otherwise, or both for chewing and smoking; but does not
include cigarettes as defined in Section 1 of the Cigarette Tax
Act or tobacco purchased for the manufacture of cigarettes by
cigarette distributors and manufacturers defined in the
Cigarette Tax Act and persons who make, manufacture, or
fabricate cigarettes as a part of a Correctional Industries
program for sale to residents incarcerated in penal
institutions or resident patients of a State operated mental
health facility.
    "Wholesale price" means the established list price for
which a manufacturer sells tobacco products to a distributor,
before the allowance of any discount, trade allowance, rebate,
or other reduction. In the absence of such an established list
price, the manufacturer's invoice price at which the
manufacturer sells the tobacco product to unaffiliated
distributors, before any discounts, trade allowances, rebates,
or other reductions, shall be presumed to be the wholesale
price.
    "Wholesaler" means any person, wherever resident or
located, engaged in the business of selling tobacco products to
others for the purpose of resale. "Wholesaler", when used in
this Act, does not include a person licensed as a distributor
under Section 10-20 of this Act unless expressly stated in this
Act.
(Source: P.A. 97-688, eff. 6-14-12; 98-273, eff. 8-9-13.)
 
    (35 ILCS 143/10-20)
    Sec. 10-20. Distributor's Licenses. It shall be unlawful
for any person to engage in business as a distributor of
tobacco products within the meaning of this Act without first
having obtained a license to do so from the Department.
Application for that license shall be made to the Department in
a form prescribed and furnished by the Department. Each
applicant for a license shall furnish to the Department on a
form, signed and verified by the applicant, the following
information:
        (1) The name of the applicant.
        (2) The address of the location at which the applicant
    proposes to engage in business as a distributor of tobacco
    products.
        (3) Other information the Department may reasonably
    require.
    Except as otherwise provided in this Section, every
applicant who is required to procure a distributor's license
shall file with his or her application a joint and several
bond. The bond shall be executed to the Department of Revenue,
with good and sufficient surety or sureties residing or
licensed to do business within the State of Illinois,
conditioned upon the true and faithful compliance by the
licensee with all of the provisions of this Act. The Department
shall fix the amount of the bond for each applicant, taking
into consideration the amount of money expected to become due
from the applicant under this Act. The amount of bond required
by the Department shall be an amount that, in its opinion, will
protect the State of Illinois against failure to pay the amount
that may become due from the applicant under this Act, but the
amount of the security required by the Department shall not
exceed 3 times the amount of the applicant's average monthly
tax liability, or $50,000, whichever amount is lower. The bond,
a reissue, or a substitute shall be kept in full force and
effect during the entire period covered by the license. A
separate application for license shall be made, and bond filed,
for each place of business at which a person who is required to
procure a distributor's license proposes to engage in business
as a distributor under this Act.
    The Department, upon receipt of an application and bond in
proper form, shall issue to the applicant a license, in a form
prescribed by the Department, which shall permit the applicant
to whom it is issued to engage in business as a distributor at
the place shown on his or her application. The license shall be
issued by the Department without charge or cost to the
applicant. No license issued under this Act is transferable or
assignable. The license shall be conspicuously displayed in the
place of business conducted by the licensee under the license.
    The bonding requirement in this Section does not apply to
an applicant for a distributor's license who is already bonded
under the Cigarette Tax Act or the Cigarette Use Tax Act.
Licenses issued by the Department under this Act shall be valid
for a period not to exceed one year after issuance unless
sooner revoked, canceled, or suspended as provided in this Act.
    No license shall be issued to any person who is in default
to the State of Illinois for moneys due under this Act or any
other tax Act administered by the Department.
    The Department may, in its discretion, upon application,
authorize the payment of the tax imposed under Section 10-10 by
any distributor or manufacturer not otherwise subject to the
tax imposed under this Act who, to the satisfaction of the
Department, furnishes adequate security to ensure payment of
the tax. The distributor or manufacturer shall be issued,
without charge, a license to remit the tax. When so authorized,
it shall be the duty of the distributor or manufacturer to
remit the tax imposed upon the wholesale price of tobacco
products sold or otherwise disposed of to retailers or
consumers located in this State, in the same manner and subject
to the same requirements as any other distributor or
manufacturer licensed under this Act.
    The Department may revoke, suspend, or cancel the license
of a distributor of roll-your-own tobacco (as that term is used
in Section 10 of the Tobacco Product Manufacturers' Escrow Act)
under this Act if the tobacco product manufacturer, as defined
in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
that made or sold the roll-your-own tobacco has failed to
become a participating manufacturer, as defined in subdivision
(a)(1) of Section 15 of the Tobacco Product Manufacturers'
Escrow Act, or has failed to create a qualified escrow fund for
any roll-your-own tobacco manufactured by the tobacco product
manufacturer and sold in this State or otherwise failed to
bring itself into compliance with subdivision (a)(2) of Section
15 of the Tobacco Product Manufacturers' Escrow Act.
    Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of that
decision, protest and request a hearing, whereupon the
Department must give notice to that person of the time and
place fixed for the hearing and must hold a hearing in
conformity with the provisions of this Act and then issue its
final administrative decision in the matter to that person. In
the absence of such a protest within 20 days, the Department's
decision becomes final without any further determination being
made or notice given.
(Source: P.A. 92-231, eff. 8-2-01; 92-737, eff. 7-25-02.)
 
    (35 ILCS 143/10-21 new)
    Sec. 10-21. Retailer's license. Beginning on January 1,
2016, no person may engage in business as a retailer of tobacco
products in this State without first having obtained a license
from the Department. Application for license shall be made to
the Department, by electronic means, in a form prescribed by
the Department. Each applicant for a license under this Section
shall furnish to the Department, in an electronic format
established by the Department, the following information:
        (1) the name and address of the applicant;
        (2) the address of the location at which the applicant
    proposes to engage in business as a retailer of tobacco
    products in this State;
        (3) such other additional information as the
    Department may lawfully require by its rules and
    regulations.
    The annual license fee payable to the Department for each
retailer's license shall be $75. The fee will be deposited into
the Tax Compliance and Administration Fund and shall be used
for the cost of tobacco retail inspection and contraband
tobacco and tobacco smuggling with at least two-thirds of the
money being used for contraband tobacco and tobacco smuggling
operations and enforcement.
    Each applicant for license shall pay such fee to the
Department at the time of submitting its application for
license to the Department. The Department shall require an
applicant for a license under this Section to electronically
file and pay the fee.
    A separate annual license fee shall be paid for each place
of business at which a person who is required to procure a
retailer's license under this Section proposes to engage in
business as a retailer in Illinois under this Act.
    The following are ineligible to receive a retailer's
license under this Act:
        (1) a person who has been convicted of a felony under
    any federal or State law for smuggling cigarettes or
    tobacco products or tobacco tax evasion, if the Department,
    after investigation and a hearing if requested by the
    applicant, determines that such person has not been
    sufficiently rehabilitated to warrant the public trust;
    and
        (2) a corporation, if any officer, manager or director
    thereof, or any stockholder or stockholders owning in the
    aggregate more than 5% of the stock of such corporation,
    would not be eligible to receive a license under this Act
    for any reason.
    The Department, upon receipt of an application and license
fee, in proper form, from a person who is eligible to receive a
retailer's license under this Act, shall issue to such
applicant a license in form as prescribed by the Department,
which license shall permit the applicant to which it is issued
to engage in business as a retailer under this Act at the place
shown in his application. All licenses issued by the Department
under this Section shall be valid for a period not to exceed
one year after issuance unless sooner revoked, canceled or
suspended as provided in this Act. No license issued under this
Section is transferable or assignable. Such license shall be
conspicuously displayed in the place of business conducted by
the licensee in Illinois under such license. A person who
obtains a license as a retailer who ceases to do business as
specified in the license, or who never commenced business, or
who obtains a distributor's license, or whose license is
suspended or revoked, shall immediately surrender the license
to the Department. The Department shall not issue a license to
a retailer unless the retailer is also validly registered under
the Retailers Occupation Tax Act.
    A retailer as defined under this Act need not obtain an
additional license under this Act, but shall be deemed to be
sufficiently licensed by virtue of his being properly licensed
as a retailer under Section 4g of the Cigarette Tax Act.
    Any person aggrieved by any decision of the Department
under this subsection may, within 30 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to the
person requesting the hearing of the time and place fixed for
the hearing and shall hold a hearing in conformity with the
provisions of this Act and then issue its final administrative
decision in the matter to that person. In the absence of a
protest and request for a hearing within 30 days, the
Department's decision shall become final without any further
determination being made or notice given.
 
    (35 ILCS 143/10-22 new)
    Sec. 10-22. Purchases of tobacco products by licensed
retailers. A person who possesses a retailer's license under
Section 10-21 of this Act shall obtain tobacco products for
sale only from a licensed distributor or licensed secondary
distributor.
 
    (35 ILCS 143/10-25)
    Sec. 10-25. License actions.
    (a) The Department may, after notice and a hearing, revoke,
cancel, or suspend the license of any distributor or retailer
who violates any of the provisions of this Act. The notice
shall specify the alleged violation or violations upon which
the revocation, cancellation, or suspension proceeding is
based.
    (b) The Department may revoke, cancel, or suspend the
license of any distributor for a violation of the Tobacco
Product Manufacturers' Escrow Enforcement Act as provided in
Section 20 of that Act.
    (c) If the retailer has a training program that facilitates
compliance with minimum-age tobacco laws, the Department shall
suspend for 3 days the license of that retailer for a fourth or
subsequent violation of the Prevention of Tobacco Use by Minors
and Sale and Distribution of Tobacco Products Act, as provided
in subsection (a) of Section 2 of that Act. For the purposes of
this Section, any violation of subsection (a) of Section 2 of
the Prevention of Tobacco Use by Minors and Sale and
Distribution of Tobacco Products Act occurring at the
retailer's licensed location, during a 24-month period, shall
be counted as a violation against the retailer.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 3 days the license of that
retailer for a second violation of the Prevention of Tobacco
Use by Minors and Sale and Distribution of Tobacco Products
Act, as provided in subsection (a-5) of Section 2 of that Act.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 7 days the license of that
retailer for a third violation of the Prevention of Tobacco Use
by Minors and Sale and Distribution of Tobacco Products Act, as
provided in subsection (a-5) of Section 2 of that Act.
    If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 30 days the license of a retailer
for a fourth or subsequent violation of the Prevention of
Tobacco Use by Minors and Sale and Distribution of Tobacco
Products Act, as provided in subsection (a-5) of Section 2 of
that Act.
    A training program that facilitates compliance with
minimum-age tobacco laws must include at least the following
elements: (i) it must explain that only individuals displaying
valid identification demonstrating that they are 18 years of
age or older shall be eligible to purchase cigarettes or
tobacco products; (ii) it must explain where a clerk can check
identification for a date of birth; and (iii) it must explain
the penalties that a clerk and retailer are subject to for
violations of the Prevention of Tobacco Use by Minors and Sale
and Distribution of Tobacco Products Act.
    (d) The Department may, by application to any circuit
court, obtain an injunction restraining any person who engages
in business as a distributor of tobacco products without a
license (either because his or her license has been revoked,
canceled, or suspended or because of a failure to obtain a
license in the first instance) from engaging in that business
until that person, as if that person were a new applicant for a
license, complies with all of the conditions, restrictions, and
requirements of Section 10-20 of this Act and qualifies for and
obtains a license. Refusal or neglect to obey the order of the
court may result in punishment for contempt.
(Source: P.A. 92-737, eff. 7-25-02.)
 
    (35 ILCS 143/10-35)
    Sec. 10-35. Record keeping.
    (a) Every distributor, as defined in Section 10-5, shall
keep complete and accurate records of tobacco products held,
purchased, manufactured, brought in or caused to be brought in
from without the State, and tobacco products sold, or otherwise
disposed of, and shall preserve and keep all invoices, bills of
lading, sales records, and copies of bills of sale, the
wholesale price for tobacco products sold or otherwise disposed
of, an inventory of tobacco products prepared as of December 31
of each year or as of the last day of the distributor's fiscal
year if he or she files federal income tax returns on the basis
of a fiscal year, and other pertinent papers and documents
relating to the manufacture, purchase, sale, or disposition of
tobacco products. Every sales invoice issued by a licensed
distributor to a retailer in this State shall contain the
distributor's Tobacco Products License number.
    (b) Every retailer, as defined in Section 10-5, shall keep
complete and accurate records of tobacco products held,
purchased, sold, or otherwise disposed of, and shall preserve
and keep all invoices, bills of lading, sales records, and
copies of bills of sale, returns and other pertinent papers and
documents relating to the purchase, sale, or disposition of
tobacco products. Such records need not be maintained on the
licensed premises, but must be maintained in the State of
Illinois; however, if access is available electronically, the
records may be maintained out of state. However, all original
invoices or copies thereof covering purchases of tobacco
products must be retained on the licensed premises for a period
of 90 days after such purchase, unless the Department has
granted a waiver in response to a written request in cases
where records are kept at a central business location within
the State of Illinois or in cases where records that are
available electronically are maintained out of state.
    (c) Books, records, papers, and documents that are required
by this Act to be kept shall, at all times during the usual
business hours of the day, be subject to inspection by the
Department or its duly authorized agents and employees. The
books, records, papers, and documents for any period with
respect to which the Department is authorized to issue a notice
of tax liability shall be preserved until the expiration of
that period.
(Source: P.A. 89-21, eff. 6-6-95.)
 
    (35 ILCS 143/10-37 new)
    Sec. 10-37. Proof of payment of tax imposed by this Act.
Every licensed distributor of tobacco products in this State is
required to show proof of the tax having been paid as required
by this Act by displaying its Tobacco Products License number
on every sales invoice issued to a retailer in this State. No
retailer shall possess tobacco products without either a proper
invoice indicating that the tobacco products tax was paid by a
distributor for the tobacco products in the retailer's
possession or other proof that the tax was paid by the retailer
if it has purchased tobacco products on which tax has not been
paid as required by this Act. Failure to comply with the
provisions of this paragraph may be grounds for revocation of a
distributor's or retailer's license in accordance with Section
10-25 of this Act or Section 6 of the Cigarette Tax Act. In
addition, the Department may impose a civil penalty not to
exceed $1,000 for each violation, which shall be deposited into
the Tax Compliance and Administration Fund.
 
    (35 ILCS 143/10-50)
    Sec. 10-50. Violations and penalties. When the amount due
is under $300, any distributor who fails to file a return,
willfully wilfully fails or refuses to make any payment to the
Department of the tax imposed by this Act, or files a
fraudulent return, or any officer or agent of a corporation
engaged in the business of distributing tobacco products to
retailers and consumers located in this State who signs a
fraudulent return filed on behalf of the corporation, or any
accountant or other agent who knowingly enters false
information on the return of any taxpayer under this Act is
guilty of a Class 4 felony.
    Any person who violates any provision of Sections Section
10-20, 10-21, or 10-22 of this Act, fails to keep books and
records as required under this Act, or willfully wilfully
violates a rule or regulation of the Department for the
administration and enforcement of this Act is guilty of a Class
4 felony. A person commits a separate offense on each day that
he or she engages in business in violation of Sections Section
10-20, 10-21, or 10-22 of this Act.
    When the amount due is under $300, any person who accepts
money that is due to the Department under this Act from a
taxpayer for the purpose of acting as the taxpayer's agent to
make the payment to the Department, but who fails to remit the
payment to the Department when due, is guilty of a Class 4
felony.
    Any person who violates any provision of Sections 10-20,
10-21 and 10-22 of this Act, fails to keep books and records as
required under this Act, or willfully violates a rule or
regulation of the Department for the administration and
enforcement of this Act is guilty of a business offense and may
be fined up to $5,000. A person commits a separate offense on
each day that he or she engages in business in violation of
Sections 10-20, 10-21 and 10-22 of this Act.
    When the amount due is $300 or more, any distributor who
files, or causes to be filed, a fraudulent return, or any
officer or agent of a corporation engaged in the business of
distributing tobacco products to retailers and consumers
located in this State who files or causes to be filed or signs
or causes to be signed a fraudulent return filed on behalf of
the corporation, or any accountant or other agent who knowingly
enters false information on the return of any taxpayer under
this Act is guilty of a Class 3 felony.
    When the amount due is $300 or more, any person engaged in
the business of distributing tobacco products to retailers and
consumers located in this State who fails to file a return,
willfully wilfully fails or refuses to make any payment to the
Department of the tax imposed by this Act, or accepts money
that is due to the Department under this Act from a taxpayer
for the purpose of acting as the taxpayer's agent to make
payment to the Department but fails to remit such payment to
the Department when due is guilty of a Class 3 felony.
    When the amount due is under $300, any retailer who fails
to file a return, willfully fails or refuses to make any
payment to the Department of the tax imposed by this Act, or
files a fraudulent return, or any officer or agent of a
corporation engaged in the retail business of selling tobacco
products to purchasers of tobacco products for use and
consumption located in this State who signs a fraudulent return
filed on behalf of the corporation, or any accountant or other
agent who knowingly enters false information on the return of
any taxpayer under this Act is guilty of a Class A misdemeanor
for a first offense and a Class 4 felony for each subsequent
offense.
    When the amount due is $300 or more, any retailer who fails
to file a return, willfully fails or refuses to make any
payment to the Department of the tax imposed by this Act, or
files a fraudulent return, or any officer or agent of a
corporation engaged in the retail business of selling tobacco
products to purchasers of tobacco products for use and
consumption located in this State who signs a fraudulent return
filed on behalf of the corporation, or any accountant or other
agent who knowingly enters false information on the return of
any taxpayer under this Act is guilty of a Class 4 felony.
    Any person whose principal place of business is in this
State and who is charged with a violation under this Section
shall be tried in the county where his or her principal place
of business is located unless he or she asserts a right to be
tried in another venue. If the taxpayer does not have his or
her principal place of business in this State, however, the
hearing must be held in Sangamon County unless the taxpayer
asserts a right to be tried in another venue.
    Any taxpayer or agent of a taxpayer who with the intent to
defraud purports to make a payment due to the Department by
issuing or delivering a check or other order upon a real or
fictitious depository for the payment of money, knowing that it
will not be paid by the depository, is guilty of a deceptive
practice in violation of Section 17-1 of the Criminal Code of
2012.
    A prosecution for a violation described in this Section may
be commenced within 3 years after the commission of the act
constituting the violation.
(Source: P.A. 97-1150, eff. 1-25-13.)
 
    (35 ILCS 143/10-53 new)
    Sec. 10-53. Acting as a retailer of tobacco products
without a license. Any person who knowingly acts as a retailer
of tobacco products in this State without first having obtained
a license to do so in compliance with Section 10-21 of this Act
or a license in compliance with Section 4g of the Cigarette Tax
Act shall be guilty of a Class A misdemeanor for the first
offense and a Class 4 felony for a second or subsequent
offense. Each day such person operates as a retailer without a
license constitutes a separate offense.
 
    Section 25. The Prevention of Tobacco Use by Minors and
Sale and Distribution of Tobacco Products Act is amended by
changing Sections 1 and 2 as follows:
 
    (720 ILCS 675/1)  (from Ch. 23, par. 2357)
    Sec. 1. Prohibition on sale to and possession of tobacco by
minors; prohibition on the distribution of tobacco samples to
any person; use of identification cards; vending machines;
lunch wagons; out-of-package sales.
    (a) No minor under 18 years of age shall buy any tobacco
product. No person shall sell, buy for, distribute samples of
or furnish any tobacco product to any minor under 18 years of
age.
    (a-5) No minor under 16 years of age may sell any tobacco
product at a retail establishment selling tobacco products.
This subsection does not apply to a sales clerk in a
family-owned business which can prove that the sales clerk is
in fact a son or daughter of the owner.
    (a-6) No minor under 18 years of age in the furtherance or
facilitation of obtaining any tobacco product shall display or
use a false or forged identification card or transfer, alter,
or deface an identification card.
     (a-7) No minor under 18 years of age shall possess any
cigar, cigarette, smokeless tobacco, or tobacco in any of its
forms.
    (a-8) A person shall not distribute without charge samples
of any tobacco product to any other person, regardless of age:
        (1) within a retail establishment selling tobacco
    products, unless the retailer has verified the purchaser's
    age with a government issued identification;
        (2) from a lunch wagon; or
        (3) on a public way as a promotion or advertisement of
    a tobacco manufacturer or tobacco product.
    This subsection (a-8) does not apply to the distribution of
a tobacco product sample in any adult-only facility.
    (a-9) For the purpose of this Section:
        "Adult-only facility means a facility or restricted
    area (whether open-air or enclosed) where the operator
    ensures or has a reasonable basis to believe (such as by
    checking identification as required under State law, or by
    checking the identification of any person appearing to be
    under the age of 27) that no person under legal age is
    present. A facility or restricted area need not be
    permanently restricted to persons under legal age to
    constitute an adult-only facility, provided that the
    operator ensures or has a reasonable basis to believe that
    no person under legal age is present during the event or
    time period in question.
        "Lunch wagon" means a mobile vehicle designed and
    constructed to transport food and from which food is sold
    to the general public.
        "Smokeless tobacco" means any tobacco products that
    are suitable for dipping or chewing.
        "Tobacco product" means any cigar, cigarette,
    smokeless tobacco, or tobacco in any of its forms.
    (b) Tobacco products listed in this Section may be sold
through a vending machine only if such tobacco products are not
placed together with any non-tobacco product, other than
matches, in the vending machine and the vending machine is in
any of the following locations:
        (1) (Blank).
        (2) Places to which minors under 18 years of age are
    not permitted access.
        (3) Places where alcoholic beverages are sold and
    consumed on the premises and vending machine operation is
    under the direct supervision of the owner or manager.
        (4) (Blank).
        (5) Places where the vending machine can only be
    operated by the owner or an employee over age 18 either
    directly or through a remote control device if the device
    is inaccessible to all customers.
    (c) (Blank).
    (d) The sale or distribution by any person of a tobacco
product in this Section, including but not limited to a single
or loose cigarette, that is not contained within a sealed
container, pack, or package as provided by the manufacturer,
which container, pack, or package bears the health warning
required by federal law, is prohibited.
    (e) It is not a violation of this Act for a person under 18
years of age to purchase or possess a cigar, cigarette,
smokeless tobacco or tobacco in any of its forms if the person
under the age of 18 purchases or is given the cigar, cigarette,
smokeless tobacco or tobacco in any of its forms from a retail
seller of tobacco products or an employee of the retail seller
pursuant to a plan or action to investigate, patrol, or
otherwise conduct a "sting operation" or enforcement action
against a retail seller of tobacco products or a person
employed by the retail seller of tobacco products or on any
premises authorized to sell tobacco products to determine if
tobacco products are being sold or given to persons under 18
years of age if the "sting operation" or enforcement action is
approved by, conducted by, or conducted on behalf of the
Department of State Police, the county sheriff, a municipal
police department, the Department of Revenue, the Department of
Public Health, or a local health department. The results of any
sting operation or enforcement action, including the name of
the clerk, shall be provided to the retail seller within 7
business days.
(Source: P.A. 95-905, eff. 1-1-09; 96-179, eff. 8-10-09;
96-446, eff. 1-1-10; 96-1000, eff. 7-2-10.)
 
    (720 ILCS 675/2)  (from Ch. 23, par. 2358)
    Sec. 2. Penalties.
    (a) Any person who violates subsection (a) or (a-5) of
Section 1 or Section 1.5 of this Act is guilty of a petty
offense. For the first offense in a 24-month period, the person
shall be fined $200 if his or her employer has a training
program that facilitates compliance with minimum-age tobacco
laws. For the second offense in a 24-month period, the person
shall be fined $400 if his or her employer has a training
program that facilitates compliance with minimum-age tobacco
laws. For the third offense in a 24-month period, the person
shall be fined $600 if his or her employer has a training
program that facilitates compliance with minimum-age tobacco
laws. For the fourth or subsequent offense in a 24-month
period, the person shall be fined $800 if his or her employer
has a training program that facilitates compliance with
minimum-age tobacco laws. For the purposes of this subsection,
the 24-month period shall begin with the person's first
violation of the Act. The penalties in this subsection are in
addition to any other penalties prescribed under the Cigarette
Tax Act and the Tobacco Products Tax Act of 1995.
    (a-5) Any person who violates subsection (a) or (a-5) of
Section 1 or Section 1.5 of this Act is guilty of a petty
offense. For the first offense, the retailer shall be fined
$200 if it does not have a training program that facilitates
compliance with minimum-age tobacco laws. For the second
offense, the retailer shall be fined $400 if it does not have a
training program that facilitates compliance with minimum-age
tobacco laws. For the third offense, the retailer shall be
fined $600 if it does not have a training program that
facilitates compliance with minimum-age tobacco laws. For the
fourth or subsequent offense in a 24-month period, the retailer
shall be fined $800 if it does not have a training program that
facilitates compliance with minimum-age tobacco laws. For the
purposes of this subsection, the 24-month period shall begin
with the person's first violation of the Act. The penalties in
this subsection are in addition to any other penalties
prescribed under the Cigarette Tax Act and the Tobacco Products
Tax Act of 1995.
    (a-6) For the purpose of this Act, a training program that
facilitates compliance with minimum-age tobacco laws must
include at least the following elements: (i) it must explain
that only individuals displaying valid identification
demonstrating that they are 18 years of age or older shall be
eligible to purchase cigarettes or tobacco products; (ii) it
must explain where a clerk can check identification for a date
of birth; and (iii) it must explain the penalties that a clerk
and retailer are subject to for violations of the Prevention of
Tobacco Use by Minors and Sale and Distribution of Tobacco
Products Act.
Any person who violates subsection (a), (a-5), or (a-6) of
Section 1 or Section 1.5 of this Act is guilty of a petty
offense and for the first offense shall be fined $200, $400 for
the second offense in a 12-month period, and $600 for the third
or any subsequent offense in a 12-month period.
    (b) If a minor violates subsection (a-7) of Section 1 he or
she is guilty of a petty offense and the court may impose a
sentence of 25 15 hours of community service and or a fine of
$50 $25 for a first violation. If a minor violates subsection
(a-6) of Section 1, he or she is guilty of a Class A
misdemeanor.
    (c) A second violation by a minor of subsection (a-7) of
Section 1 that occurs within 12 months after the first
violation is punishable by a fine of $75 $50 and 50 25 hours of
community service.
    (d) A third or subsequent violation by a minor of
subsection (a-7) of Section 1 that occurs within 12 months
after the first violation is punishable by a $200 $100 fine and
50 30 hours of community service.
    (e) Any second or subsequent violation not within the
12-month time period after the first violation is punishable as
provided for a first violation.
    (f) If a minor is convicted of or placed on supervision for
a violation of subsection (a-6) or (a-7) of Section 1, the
court may, in its discretion, and upon recommendation by the
State's Attorney, order that minor and his or her parents or
legal guardian to attend a smoker's education or youth
diversion program if that program is available in the
jurisdiction where the offender resides. Attendance at a
smoker's education or youth diversion program shall be
time-credited against any community service time imposed for
any first violation of subsection (a-7) of Section 1. In
addition to any other penalty that the court may impose for a
violation of subsection (a-7) of Section 1, the court, upon
request by the State's Attorney, may in its discretion require
the offender to remit a fee for his or her attendance at a
smoker's education or youth diversion program.
    (g) For purposes of this Section, "smoker's education
program" or "youth diversion program" includes, but is not
limited to, a seminar designed to educate a person on the
physical and psychological effects of smoking tobacco products
and the health consequences of smoking tobacco products that
can be conducted with a locality's youth diversion program.
    (h) All moneys collected as fines for violations of
subsection (a), (a-5), (a-6), or (a-7) of Section 1 shall be
distributed in the following manner:
        (1) one-half of each fine shall be distributed to the
    unit of local government or other entity that successfully
    prosecuted the offender; and
        (2) one-half shall be remitted to the State to be used
    for enforcing this Act.
    Any violation of subsection (a) or (a-5) of Section 1 or
Section 1.5 shall be reported to the Department of Revenue
within 7 business days.
(Source: P.A. 98-350, eff. 1-1-14.)
 
    Section 99. Effective date. This Act takes effect January
1, 2016.