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92nd General Assembly

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Public Act 92-0231

SB853 Enrolled                                 LRB9204504REdv

    AN ACT concerning taxes.

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

    Section  5.   The  Tobacco  Products  Tax  Act of 1995 is
amended by changing Sections 10-5, 10-10, 10-20, and 10-50 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 in this State.
    "Cigarette" has the  meaning  ascribed  to  the  term  in
Section 1 of the Cigarette Tax Act.
    "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 located  outside
    of  Illinois  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.
    "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.
    "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.
    "Tobacco products" means any cigars;  cheroots;  stogies;
periques;  granulated, plug cut, crimp cut, ready rubbed, and
other smoking tobacco; 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  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.
(Source: P.A. 89-21, eff. 6-6-95.)

    (35 ILCS 143/10-10)
    Sec.  10-10.  Tax  imposed. On the first day of the third
month after the month in which this Act becomes law, a tax is
imposed on any person engaged in business as a distributor of
tobacco products, as defined in Section 10-5, at the rate  of
18%  of  the  wholesale  price  of  tobacco  products sold or
otherwise disposed of to retailers or  consumers  located  in
this State. The tax is in addition to all other occupation or
privilege  taxes  imposed  by  the  State of Illinois, by any
political  subdivision   thereof,   or   by   any   municipal
corporation.   However,  the  tax  is  not  imposed  upon any
activity  in  that  business  in   interstate   commerce   or
otherwise,  to  the  extent  to  which that activity may not,
under the Constitution and Statutes of the United States,  be
made  the subject of taxation by this State.  The tax is also
not imposed on sales made to the United States or any  entity
thereof.
    All  moneys  received  by  the  Department under this Act
shall be paid into the Long-Term Care Provider  Fund  of  the
State Treasury.
(Source: P.A. 89-21, eff. 6-6-95.)

    (35 ILCS 143/10-20)
    Sec.  10-20.  Licenses.  It  shall  be  unlawful  for any
person to engage in business  as  a  distributor  of  tobacco
products in this State 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 in this State.
         (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 in Illinois 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 in Illinois 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  a
distributor or manufacturer licensed under this Act operating
within this State.
    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. 89-21, eff. 6-6-95.)

    (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,  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 Section 10-20 of
this  Act,  fails to keep books and records as required under
this Act, or 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 Section 10-20 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.
    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, 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.
    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 1961.
    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. 89-21, eff. 6-6-95.)

    Section 99.  Effective date.  This Act takes effect  upon
becoming law.
    Passed in the General Assembly May 10, 2001.
    Approved August 02, 2001.

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