101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3836

 

Introduced 2/14/2020, by Sen. Cristina Castro

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 143/10-5

    Amends the Tobacco Products Tax Act of 1995. Provides that the term "electronic cigarette" does not include any cartridge or container of a solution or substance that contains cannabis subject to tax under the Compassionate Use of Medical Cannabis Program Act or the Cannabis Cultivation Privilege Tax Law. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Tobacco Products Tax Act of 1995 is amended
5by changing Section 10-5 as follows:
 
6    (35 ILCS 143/10-5)
7    Sec. 10-5. Definitions. For purposes of this Act:
8    "Business" means any trade, occupation, activity, or
9enterprise engaged in, at any location whatsoever, for the
10purpose of selling tobacco products.
11    "Cigarette" has the meaning ascribed to the term in Section
121 of the Cigarette Tax Act.
13    "Contraband little cigar" means:
14        (1) packages of little cigars containing 20 or 25
15    little cigars that do not bear a required tax stamp under
16    this Act;
17        (2) packages of little cigars containing 20 or 25
18    little cigars that bear a fraudulent, imitation, or
19    counterfeit tax stamp;
20        (3) packages of little cigars containing 20 or 25
21    little cigars that are improperly tax stamped, including
22    packages of little cigars that bear only a tax stamp of
23    another state or taxing jurisdiction; or

 

 

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1        (4) packages of little cigars containing other than 20
2    or 25 little cigars in the possession of a distributor,
3    retailer or wholesaler, unless the distributor, retailer,
4    or wholesaler possesses, or produces within the time frame
5    provided in Section 10-27 or 10-28 of this Act, an invoice
6    from a stamping distributor, distributor, or wholesaler
7    showing that the tax on the packages has been or will be
8    paid.
9    "Correctional Industries program" means a program run by a
10State penal institution in which residents of the penal
11institution produce tobacco products for sale to persons
12incarcerated in penal institutions or resident patients of a
13State operated mental health facility.
14    "Department" means the Illinois Department of Revenue.
15    "Distributor" means any of the following:
16        (1) Any manufacturer or wholesaler in this State
17    engaged in the business of selling tobacco products who
18    sells, exchanges, or distributes tobacco products to
19    retailers or consumers in this State.
20        (2) Any manufacturer or wholesaler engaged in the
21    business of selling tobacco products from without this
22    State who sells, exchanges, distributes, ships, or
23    transports tobacco products to retailers or consumers
24    located in this State, so long as that manufacturer or
25    wholesaler has or maintains within this State, directly or
26    by subsidiary, an office, sales house, or other place of

 

 

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1    business, or any agent or other representative operating
2    within this State under the authority of the person or
3    subsidiary, irrespective of whether the place of business
4    or agent or other representative is located here
5    permanently or temporarily.
6        (3) Any retailer who receives tobacco products on which
7    the tax has not been or will not be paid by another
8    distributor.
9    "Distributor" does not include any person, wherever
10resident or located, who makes, manufactures, or fabricates
11tobacco products as part of a Correctional Industries program
12for sale to residents incarcerated in penal institutions or
13resident patients of a State operated mental health facility.
14    "Electronic cigarette" means:
15        (1) any device that employs a battery or other
16    mechanism to heat a solution or substance to produce a
17    vapor or aerosol intended for inhalation;
18        (2) any cartridge or container of a solution or
19    substance intended to be used with or in the device or to
20    refill the device, except any cartridge or container of a
21    solution or substance that contains cannabis subject to tax
22    under the Compassionate Use of Medical Cannabis Program Act
23    or the Cannabis Cultivation Privilege Tax Law; or
24        (3) any solution or substance, whether or not it
25    contains nicotine, intended for use in the device, except
26    any solution or substance that contains cannabis subject to

 

 

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1    tax under the Compassionate Use of Medical Cannabis Program
2    Act or the Cannabis Cultivation Privilege Tax Law. The
3    changes made to the definition of "electronic cigarette" by
4    this amendatory Act of the 101st General Assembly apply on
5    and after June 28, 2019, but no claim for credit or refund
6    is allowed on or after the effective date of this
7    amendatory Act of the 101st General Assembly for such taxes
8    paid during the period beginning June 28, 2019 and the
9    effective date of this amendatory Act of the 101st General
10    Assembly.
11    "Electronic cigarette" includes, but is not limited to, any
12electronic nicotine delivery system, electronic cigar,
13electronic cigarillo, electronic pipe, electronic hookah, vape
14pen, or similar product or device, and any component or part
15that can be used to build the product or device. "Electronic
16cigarette" does not include: cigarettes, as defined in Section
171 of the Cigarette Tax Act; any product approved by the United
18States Food and Drug Administration for sale as a tobacco
19cessation product, a tobacco dependence product, or for other
20medical purposes that is marketed and sold solely for that
21approved purpose; any asthma inhaler prescribed by a physician
22for that condition that is marketed and sold solely for that
23approved purpose; or any therapeutic product approved for use
24under the Compassionate Use of Medical Cannabis Program Act.
25    "Little cigar" means and includes any roll, made wholly or
26in part of tobacco, where such roll has an integrated cellulose

 

 

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1acetate filter and weighs less than 4 pounds per thousand and
2the wrapper or cover of which is made in whole or in part of
3tobacco.
4    "Manufacturer" means any person, wherever resident or
5located, who manufactures and sells tobacco products, except a
6person who makes, manufactures, or fabricates tobacco products
7as a part of a Correctional Industries program for sale to
8persons incarcerated in penal institutions or resident
9patients of a State operated mental health facility.
10    Beginning on January 1, 2013, "moist snuff" means any
11finely cut, ground, or powdered tobacco that is not intended to
12be smoked, but shall not include any finely cut, ground, or
13powdered tobacco that is intended to be placed in the nasal
14cavity.
15    "Person" means any natural individual, firm, partnership,
16association, joint stock company, joint venture, limited
17liability company, or public or private corporation, however
18formed, or a receiver, executor, administrator, trustee,
19conservator, or other representative appointed by order of any
20court.
21    "Place of business" means and includes any place where
22tobacco products are sold or where tobacco products are
23manufactured, stored, or kept for the purpose of sale or
24consumption, including any vessel, vehicle, airplane, train,
25or vending machine.
26    "Retailer" means any person in this State engaged in the

 

 

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1business of selling tobacco products to consumers in this
2State, regardless of quantity or number of sales.
3    "Sale" means any transfer, exchange, or barter in any
4manner or by any means whatsoever for a consideration and
5includes all sales made by persons.
6    "Stamp" or "stamps" mean the indicia required to be affixed
7on a package of little cigars that evidence payment of the tax
8on packages of little cigars containing 20 or 25 little cigars
9under Section 10-10 of this Act. These stamps shall be the same
10stamps used for cigarettes under the Cigarette Tax Act.
11    "Stamping distributor" means a distributor licensed under
12this Act and also licensed as a distributor under the Cigarette
13Tax Act or Cigarette Use Tax Act.
14    "Tobacco products" means any cigars, including little
15cigars; cheroots; stogies; periques; granulated, plug cut,
16crimp cut, ready rubbed, and other smoking tobacco; snuff
17(including moist snuff) or snuff flour; cavendish; plug and
18twist tobacco; fine-cut and other chewing tobaccos; shorts;
19refuse scraps, clippings, cuttings, and sweeping of tobacco;
20and other kinds and forms of tobacco, prepared in such manner
21as to be suitable for chewing or smoking in a pipe or
22otherwise, or both for chewing and smoking; but does not
23include cigarettes as defined in Section 1 of the Cigarette Tax
24Act or tobacco purchased for the manufacture of cigarettes by
25cigarette distributors and manufacturers defined in the
26Cigarette Tax Act and persons who make, manufacture, or

 

 

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1fabricate cigarettes as a part of a Correctional Industries
2program for sale to residents incarcerated in penal
3institutions or resident patients of a State operated mental
4health facility.
5    Beginning on July 1, 2019, "tobacco products" also includes
6electronic cigarettes.
7    "Wholesale price" means the established list price for
8which a manufacturer sells tobacco products to a distributor,
9before the allowance of any discount, trade allowance, rebate,
10or other reduction. In the absence of such an established list
11price, the manufacturer's invoice price at which the
12manufacturer sells the tobacco product to unaffiliated
13distributors, before any discounts, trade allowances, rebates,
14or other reductions, shall be presumed to be the wholesale
15price.
16    "Wholesaler" means any person, wherever resident or
17located, engaged in the business of selling tobacco products to
18others for the purpose of resale. "Wholesaler", when used in
19this Act, does not include a person licensed as a distributor
20under Section 10-20 of this Act unless expressly stated in this
21Act.
22(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19.)
 
23    Section 99. Effective date. This Act takes effect upon
24becoming law.