Section 660.17  Nicotine Products

a)         Beginning July 1, 2025, nicotine products, whether naturally derived from tobacco or synthetically made, are included in the definition of "tobacco products" and subject to the provisions of this Part.  Public Act 104-0006 changed the definition of "tobacco products." 

1)         Effective on and after July 1, 2025, "tobacco product" includes any product that is made from or derived from tobacco, or that contains nicotine whether natural or synthetic, that is intended for human consumption or is likely to be consumed, including but not limited to nicotine pouches, lozenges, and gum; and other kinds and forms of nicotine prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking or for inhalation, absorption, or ingesting by any other means. 

2)         However, "tobacco products" does not include any product that has been approved by the United States Food and Drug Administration (FDA) for sale as a tobacco or smoking cessation product, a nicotine replacement therapy product, or for other medical purposes where that product is marketed and sold solely for such approved use, including but not limited to spray or inhaler prescribed by a physician, chewing gum, skin patches, or lozenges.  [35 ILCS 143/10-5]

b)         To be excluded from the definition of "tobacco product" as a therapeutic product or smoking cessation product, the product must be marketed as FDA-approved nicotine replacement therapy.  Over-the-counter nicotine, FDA-approved replacement therapy products include a "drug facts" label on the packaging. 

c)         Registration and Licenses

1)         Retailers selling nicotine products, including pouches, at retail to users and consumers must obtain a tobacco retailer license.  See 86 Ill. Adm. Code 660.16.

2)         Retailers selling nicotine products on which the tax has not or will not be paid by a distributor must obtain a distributor license, file returns, and remit the tax to the Department.  See 86 Ill. Adm. Code 660.15.

3)         Manufacturers of nicotine products (e.g., pouches, lozenges) meeting the definition of "distributor" selling nicotine products directly to consumers must obtain both a distributor license and a tobacco retailer license.

4)         Any manufacturer or wholesaler engaged in the business of selling tobacco products from outside of Illinois who sells, exchanges, distributes, ships, or transports nicotine products to retailers or consumers located in Illinois must register to become a distributor if the manufacturer or wholesaler has or maintains within Illinois, directly or by subsidiary, an office, sales house, or other place of business, or any agent or other representative operating within Illinois 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.

EXAMPLE:  An out-of-State manufacturer of nicotine products sells nicotine products over the internet at retail to consumers in this State.  It also sells nicotine products to retailers in this State.  The manufacturer has representatives that solicit sales by retail stores in this State.  The manufacturer is required to obtain a distributor license and pay the tax on all sales made to retailers and consumers in this State.

d)         Invoices

Whenever any sales invoice issued by an in-State or out-of-State seller for nicotine products sold to a retailer does not comply with the requirements of Section 660.25 (d) and (e), a prima facie presumption shall arise that the tax imposed by Section 10-10 of the Act and Section 660.5 has not been paid on the nicotine products listed on the sales invoice.  A retailer that is unable to rebut this presumption is in violation of both the Act and this Part and is subject to applicable taxes, penalties, and interest.

(Source:  Added at 50 Ill. Reg. 8384, effective June 1, 2026)