103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB3489

 

Introduced 2/17/2023, by Rep. Jonathan Carroll

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 143/10-10
35 ILCS 143/10-30

    Amends the Tobacco Products Tax Act of 1995. Provides that, beginning on January 1, 2024, the tax per cigar or other rolled tobacco product shall not exceed $0.50 per cigar or roll. Provides that distributors are allowed a discount in the amount of 2% of the distributor's tax liability, but not to exceed $2,000 per return. Effective immediately.


LRB103 30110 HLH 56534 b

 

 

A BILL FOR

 

HB3489LRB103 30110 HLH 56534 b

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 Sections 10-10 and 10-30 as follows:
 
6    (35 ILCS 143/10-10)
7    Sec. 10-10. Tax imposed.
8    (a) Except as otherwise provided in this Section with
9respect to little cigars, on the first day of the third month
10after the month in which this Act becomes law, a tax is imposed
11on any person engaged in business as a distributor of tobacco
12products, as defined in Section 10-5, at the rate of (i) 18% of
13the wholesale price of tobacco products sold or otherwise
14disposed of to retailers or consumers located in this State
15prior to July 1, 2012 and (ii) 36% of the wholesale price of
16tobacco products sold or otherwise disposed of to retailers or
17consumers located in this State beginning on July 1, 2012;
18except that, beginning on January 1, 2013, the tax on moist
19snuff shall be imposed at a rate of $0.30 per ounce, and a
20proportionate tax at the like rate on all fractional parts of
21an ounce, sold or otherwise disposed of to retailers or
22consumers located in this State; and except that, beginning
23July 1, 2019, the tax on electronic cigarettes shall be

 

 

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1imposed at the rate of 15% of the wholesale price of electronic
2cigarettes sold or otherwise disposed of to retailers or
3consumers located in this State. The tax is in addition to all
4other occupation or privilege taxes imposed by the State of
5Illinois, by any political subdivision thereof, or by any
6municipal corporation. However, the tax is not imposed upon
7any activity in that business in interstate commerce or
8otherwise, to the extent to which that activity may not, under
9the Constitution and Statutes of the United States, be made
10the subject of taxation by this State, and except that,
11beginning July 1, 2013, the tax on little cigars shall be
12imposed at the same rate, and the proceeds shall be
13distributed in the same manner, as the tax imposed on
14cigarettes under the Cigarette Tax Act. The tax is also not
15imposed on sales made to the United States or any entity
16thereof.
17    (b) Notwithstanding subsection (a) of this Section,
18stamping distributors of packages of little cigars containing
1920 or 25 little cigars sold or otherwise disposed of in this
20State shall remit the tax by purchasing tax stamps from the
21Department and affixing them to packages of little cigars in
22the same manner as stamps are purchased and affixed to
23cigarettes under the Cigarette Tax Act, unless the stamping
24distributor sells or otherwise disposes of those packages of
25little cigars to another stamping distributor. Only persons
26meeting the definition of "stamping distributor" contained in

 

 

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1Section 10-5 of this Act may affix stamps to packages of little
2cigars containing 20 or 25 little cigars. Stamping
3distributors may not sell or dispose of little cigars at
4retail to consumers or users at locations where stamping
5distributors affix stamps to packages of little cigars
6containing 20 or 25 little cigars.
7    (c) The impact of the tax levied by this Act is imposed
8upon distributors engaged in the business of selling tobacco
9products to retailers or consumers in this State. Whenever a
10stamping distributor brings or causes to be brought into this
11State from without this State, or purchases from without or
12within this State, any packages of little cigars containing 20
13or 25 little cigars upon which there are no tax stamps affixed
14as required by this Act, for purposes of resale or disposal in
15this State to a person not a stamping distributor, then such
16stamping distributor shall pay the tax to the Department and
17add the amount of the tax to the price of such packages sold by
18such stamping distributor. Payment of the tax shall be
19evidenced by a stamp or stamps affixed to each package of
20little cigars containing 20 or 25 little cigars.
21    Stamping distributors paying the tax to the Department on
22packages of little cigars containing 20 or 25 little cigars
23sold to other distributors, wholesalers or retailers shall add
24the amount of the tax to the price of the packages of little
25cigars containing 20 or 25 little cigars sold by such stamping
26distributors.

 

 

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1    (d) Beginning on January 1, 2013, the tax rate imposed per
2ounce of moist snuff may not exceed 15% of the tax imposed upon
3a package of 20 cigarettes pursuant to the Cigarette Tax Act.
4    (d-5) Notwithstanding the provisions of this Section,
5beginning January 1, 2024, the tax per cigar or other rolled
6tobacco product sold or otherwise disposed of shall not exceed
7$0.50 per cigar or roll.
8    (e) All moneys received by the Department under this Act
9from sales occurring prior to July 1, 2012 shall be paid into
10the Long-Term Care Provider Fund of the State Treasury. Of the
11moneys received by the Department from sales occurring on or
12after July 1, 2012, except for moneys received from the tax
13imposed on the sale of little cigars, 50% shall be paid into
14the Long-Term Care Provider Fund and 50% shall be paid into the
15Healthcare Provider Relief Fund. Beginning July 1, 2013, all
16moneys received by the Department under this Act from the tax
17imposed on little cigars shall be distributed as provided in
18Section 2 of the Cigarette Tax Act.
19(Source: P.A. 101-31, eff. 6-28-19.)
 
20    (35 ILCS 143/10-30)
21    Sec. 10-30. Returns.
22    (a) Every distributor shall, on or before the 15th day of
23each month, file a return with the Department covering the
24preceding calendar month. The return shall disclose the
25wholesale price for all tobacco products other than moist

 

 

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1snuff and the quantity in ounces of moist snuff sold or
2otherwise disposed of and other information that the
3Department may reasonably require. The return shall be filed
4upon a form prescribed and furnished by the Department.
5    (b) In addition to the information required under
6subsection (a), on or before the 15th day of each month,
7covering the preceding calendar month, each stamping
8distributor shall, on forms prescribed and furnished by the
9Department, report the quantity of little cigars sold or
10otherwise disposed of, including the number of packages of
11little cigars sold or disposed of during the month containing
1220 or 25 little cigars.
13    (c) At the time when any return of any distributor is due
14to be filed with the Department, the distributor shall also
15remit to the Department the tax liability that the distributor
16has incurred for transactions occurring in the preceding
17calendar month, less the discount allowed.
18    (d) The Department may adopt rules to require the
19electronic filing of any return or document required to be
20filed under this Act. Those rules may provide for exceptions
21from the filing requirement set forth in this paragraph for
22persons who demonstrate that they do not have access to the
23Internet and petition the Department to waive the electronic
24filing requirement.
25    (e) If any payment provided for in this Section exceeds
26the distributor's liabilities under this Act, as shown on an

 

 

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1original return, the distributor may credit such excess
2payment against liability subsequently to be remitted to the
3Department under this Act, in accordance with reasonable rules
4adopted by the Department.
5    (f) The distributor required to pay the tax under Section
610-10 shall be entitled to a discount to reimburse the
7distributor for the expenses incurred in keeping and
8maintaining records, preparing and filing the returns,
9remitting the tax, and supplying the data to the Department
10upon request. The discount shall be 2% of the distributor's
11tax liability under this Act, but not to exceed $2,000 per
12return.
13(Source: P.A. 100-1171, eff. 1-4-19.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.