Rep. Robert "Bob" Rita

Filed: 4/1/2024

 

 


 

 


 
10300HB5108ham001LRB103 37757 HLH 71548 a

1
AMENDMENT TO HOUSE BILL 5108

2    AMENDMENT NO. ______. Amend House Bill 5108 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Tobacco Products Tax Act of 1995 is
5amended by changing Sections 10-5, 10-10, 10-25, 10-30, 10-35,
610-37, 10-38, 10-45, and 10-50 and by adding Section 10-24 as
7follows:
 
8    (35 ILCS 143/10-5)
9    Sec. 10-5. Definitions. For purposes of this Act:
10    "Actual cost" means the actual price paid for each
11individual SKU by a distributor or a remote retail seller
12before any stated discounts or rebates.
13    "Actual cost list" means the average actual price paid by
14a distributor or a remote retail seller to a manufacturer,
15wholesaler, or distributor for a SKU during the calendar year
16immediately preceding the calendar year in which the sale

 

 

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1occurs.
2    "Business" means any trade, occupation, activity, or
3enterprise engaged in, at any location whatsoever, for the
4purpose of selling tobacco products.
5    "Cigar" means any roll of tobacco wrapped in leaf tobacco
6or in any substance containing tobacco. "Cigar" does not
7include a little cigar or any roll of tobacco that is
8classified as a cigarette within the meaning of Section 1 of
9the Cigarette Tax Act.
10    "Cigarette" has the meaning ascribed to the term in
11Section 1 of the Cigarette Tax Act.
12    "Contraband little cigar" means:
13        (1) packages of little cigars containing 20 or 25
14    little cigars that do not bear a required tax stamp under
15    this Act;
16        (2) packages of little cigars containing 20 or 25
17    little cigars that bear a fraudulent, imitation, or
18    counterfeit tax stamp;
19        (3) packages of little cigars containing 20 or 25
20    little cigars that are improperly tax stamped, including
21    packages of little cigars that bear only a tax stamp of
22    another state or taxing jurisdiction; or
23        (4) packages of little cigars containing other than 20
24    or 25 little cigars in the possession of a distributor,
25    retailer or wholesaler, unless the distributor, retailer,
26    or wholesaler possesses, or produces within the time frame

 

 

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1    provided in Section 10-27 or 10-28 of this Act, an invoice
2    from a stamping distributor, distributor, or wholesaler
3    showing that the tax on the packages has been or will be
4    paid.
5    "Consumer" means a person who acquires ownership of
6tangible personal property, including tobacco products, for
7use or consumption in this State and not for resale.
8    "Correctional Industries program" means a program run by a
9State penal institution in which residents of the penal
10institution produce tobacco products for sale to persons
11incarcerated in penal institutions or resident patients of a
12State operated mental health facility.
13    "Department" means the Illinois Department of Revenue.
14    "Distributor" means any of the following:
15        (1) Any manufacturer or wholesaler in this State
16    engaged in the business of selling tobacco products who
17    sells, exchanges, or distributes tobacco products to
18    retailers or consumers in this State.
19        (2) Any manufacturer or wholesaler engaged in the
20    business of selling tobacco products from without this
21    State who sells, exchanges, distributes, ships, or
22    transports tobacco products to retailers or consumers
23    located in this State, so long as that manufacturer or
24    wholesaler has or maintains within this State, directly or
25    by subsidiary, an office, sales house, or other place of
26    business, or any agent or other representative operating

 

 

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

 

 

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1    of a solution or substance that contains cannabis subject
2    to tax under the Compassionate Use of Medical Cannabis
3    Program Act or the Cannabis Regulation and Tax Act; or
4        (3) any solution or substance, whether or not it
5    contains nicotine, intended for use in the device, except
6    for any solution or substance that contains cannabis
7    subject to tax under the Compassionate Use of Medical
8    Cannabis Program Act or the Cannabis Regulation and Tax
9    Act.
10    The changes made to the definition of "electronic
11cigarette" by this amendatory Act of the 102nd General
12Assembly apply on and after June 28, 2019, but no claim for
13credit or refund is allowed on or after the effective date of
14this amendatory Act of the 102nd General Assembly for such
15taxes paid during the period beginning June 28, 2019 and the
16effective date of this amendatory Act of the 102nd General
17Assembly.
18    "Electronic cigarette" includes, but is not limited to,
19any electronic nicotine delivery system, electronic cigar,
20electronic cigarillo, electronic pipe, electronic hookah, vape
21pen, or similar product or device, and any component or part
22that can be used to build the product or device. "Electronic
23cigarette" does not include: cigarettes, as defined in Section
241 of the Cigarette Tax Act; any product approved by the United
25States Food and Drug Administration for sale as a tobacco
26cessation product, a tobacco dependence product, or for other

 

 

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1medical purposes that is marketed and sold solely for that
2approved purpose; any asthma inhaler prescribed by a physician
3for that condition that is marketed and sold solely for that
4approved purpose; or any therapeutic product approved for use
5under the Compassionate Use of Medical Cannabis Program Act.
6    "Little cigar" means and includes any roll, made wholly or
7in part of tobacco, where such roll has an integrated
8cellulose acetate filter and weighs less than 4 pounds per
9thousand and the wrapper or cover of which is made in whole or
10in part of tobacco.
11    "Manufacturer" means any person, wherever resident or
12located, who manufactures and sells tobacco products, except a
13person who makes, manufactures, or fabricates tobacco products
14as a part of a Correctional Industries program for sale to
15persons incarcerated in penal institutions or resident
16patients of a State operated mental health facility.
17    Beginning on January 1, 2013, "moist snuff" means any
18finely cut, ground, or powdered tobacco that is not intended
19to be smoked, but shall not include any finely cut, ground, or
20powdered tobacco that is intended to be placed in the nasal
21cavity.
22    "Person" means any natural individual, firm, partnership,
23association, joint stock company, joint venture, limited
24liability company, or public or private corporation, however
25formed, or a receiver, executor, administrator, trustee,
26conservator, or other representative appointed by order of any

 

 

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1court.
2    "Pipe tobacco" means any tobacco that, because of its
3appearance, type, packaging, or labeling, is suitable for use
4in a pipe and is likely to be offered to or purchased by a
5consumer as tobacco to be smoked in a pipe.
6    "Place of business" means and includes any place where
7tobacco products are sold or where tobacco products are
8manufactured, stored, or kept for the purpose of sale or
9consumption, including any vessel, vehicle, airplane, train,
10or vending machine.
11    "Remote retail sale" means a sale by a remote retail
12seller of cigars or pipe tobacco to a consumer in this State
13when:
14        (1) the buyer submits the order for the sale by means
15    of a telephone or other method of voice transmission, by
16    first class mail, or by using the Internet or other online
17    service, or if the seller is otherwise not in the physical
18    presence of the buyer when the request for purchase or
19    order is made; or
20        (2) the cigars or pipe tobacco are delivered to the
21    buyer by common carrier, private delivery service, or
22    other method of remote delivery, or the seller is not in
23    the physical presence of the buyer when the buyer obtains
24    possession of the cigars or pipe tobacco.
25    "Remote retail seller" means a person located outside of
26this State who makes remote retail sales of cigars or pipe

 

 

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1tobacco, so long as that person does not maintain within this
2State, directly or by a subsidiary, an office, distribution
3house, sales house, warehouse, or other place of business, or
4any agent or other representative operating within this State
5under the authority of the person or its subsidiary,
6irrespective of whether the place of business or the agent is
7located here permanently or temporarily or whether the person
8or subsidiary is licensed to do business in this State.
9    "Retailer" means any person in this State engaged in the
10business of selling tobacco products to consumers in this
11State, regardless of quantity or number of sales.
12    "Sale" means any transfer, exchange, or barter in any
13manner or by any means whatsoever for a consideration and
14includes all sales made by persons.
15    "Stamp" or "stamps" mean the indicia required to be
16affixed on a package of little cigars that evidence payment of
17the tax on packages of little cigars containing 20 or 25 little
18cigars under Section 10-10 of this Act. These stamps shall be
19the same stamps used for cigarettes under the Cigarette Tax
20Act.
21    "Stamping distributor" means a distributor licensed under
22this Act and also licensed as a distributor under the
23Cigarette Tax Act or Cigarette Use Tax Act.
24    "Stock keeping unit" or "SKU" means the unique identifier
25assigned by a manufacturer, distributor, or remote retail
26seller to various tobacco products in order to track

 

 

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1inventory.
2    "Tobacco products" means any cigars, including little
3cigars; cheroots; stogies; periques; granulated, plug cut,
4crimp cut, ready rubbed, and other smoking tobacco; snuff
5(including moist snuff) or snuff flour; cavendish; plug and
6twist tobacco; fine-cut and other chewing tobaccos; shorts;
7refuse scraps, clippings, cuttings, and sweeping of tobacco;
8and other kinds and forms of tobacco, prepared in such manner
9as to be suitable for chewing or smoking in a pipe or
10otherwise, or both for chewing and smoking; but does not
11include cigarettes as defined in Section 1 of the Cigarette
12Tax Act or tobacco purchased for the manufacture of cigarettes
13by cigarette distributors and manufacturers defined in the
14Cigarette Tax Act and persons who make, manufacture, or
15fabricate cigarettes as a part of a Correctional Industries
16program for sale to residents incarcerated in penal
17institutions or resident patients of a State operated mental
18health facility.
19    Beginning on July 1, 2019, "tobacco products" also
20includes electronic cigarettes.
21    "Wholesale price" means the established list price for
22which a manufacturer sells tobacco products to a distributor,
23before the allowance of any discount, trade allowance, rebate,
24or other reduction. In the absence of such an established list
25price, the manufacturer's invoice price at which the
26manufacturer sells the tobacco product to unaffiliated

 

 

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1distributors, before any discounts, trade allowances, rebates,
2or other reductions, shall be presumed to be the wholesale
3price.
4    "Wholesaler" means any person, wherever resident or
5located, engaged in the business of selling tobacco products
6to others for the purpose of resale. "Wholesaler", when used
7in this Act, does not include a person licensed as a
8distributor under Section 10-20 of this Act unless expressly
9stated in this Act.
10(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19;
11102-40, eff. 6-25-21.)
 
12    (35 ILCS 143/10-10)
13    Sec. 10-10. Tax imposed.
14    (a) Except as otherwise provided in this Section with
15respect to little cigars, on the first day of the third month
16after the month in which this Act becomes law, a tax is imposed
17on any person engaged in business as a distributor of tobacco
18products, as defined in Section 10-5, at the rate of:
19            (1) (i) 18% of the wholesale price of tobacco
20    products sold or otherwise disposed of to retailers or
21    consumers located in this State prior to July 1, 2012;
22            (2) and (ii) 36% of the wholesale price of tobacco
23    products sold or otherwise disposed of to retailers or
24    consumers located in this State beginning on July 1, 2012
25    and before January 1, 2025; and

 

 

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1            (3) beginning on January 1, 2025, 36% of:
2                (A) the actual cost paid by a distributor or
3        remote retail seller for the stock keeping unit sold
4        or otherwise disposed of to a retailer or consumer in
5        the State; or
6                (B) if documentation of the actual cost paid
7        by a distributor or remote retail seller is not
8        available due to matters beyond the distributor or
9        remote retail seller's control, the actual cost list
10        paid by a distributor or remote retail seller for the
11        stock keeping unit sold or otherwise disposed of to
12        retailers or consumers located in this State for which
13        documentation is not available. ; except that,
14        beginning
15    Notwithstanding the provisions of this subsection (a),
16beginning on January 1, 2013, the tax on moist snuff shall be
17imposed at a rate of $0.30 per ounce, and a proportionate tax
18at the like rate on all fractional parts of an ounce, sold or
19otherwise disposed of to retailers or consumers located in
20this State. Notwithstanding the provisions of subsection (a),
21beginning on ; and except that, beginning July 1, 2019, the tax
22on electronic cigarettes shall be imposed at the rate of 15% of
23the wholesale price of electronic cigarettes sold or otherwise
24disposed of to retailers or consumers located in this State.
25    The tax imposed under this subsection (a) is in addition
26to all other occupation or privilege taxes imposed by the

 

 

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1State of Illinois, by any political subdivision thereof, or by
2any municipal corporation. However, the tax is not imposed
3upon any activity in that business in interstate commerce or
4otherwise, to the extent to which that activity may not, under
5the Constitution and Statutes of the United States, be made
6the subject of taxation by this State, and except that,
7beginning July 1, 2013, the tax on little cigars shall be
8imposed at the same rate, and the proceeds shall be
9distributed in the same manner, as the tax imposed on
10cigarettes under the Cigarette Tax Act. The tax is also not
11imposed on sales made to the United States or any entity
12thereof.
13    If the Department determines that the actual cost list for
14a SKU is not indicative of the actual cost paid for the SKU,
15then the Department may determine the distributor's or remote
16retail seller's tax liability for the SKU based on the
17distributor's or remote retail seller's books and records or
18from information on invoices obtained from the distributor's
19or remote retail seller's suppliers.
20    (a-5) Beginning January 1, 2025, the tax imposed under
21subsection (a) is also imposed upon persons who are engaged in
22business as remote retail sellers of cigars and pipe tobacco
23and who make sales to Illinois consumers on which the tax has
24not been paid by a distributor, if:
25        (1) the cumulative gross receipts of the remote retail
26    seller from sales of tangible personal property to

 

 

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1    consumers in this State are $100,000 or more; or
2        (2) the remote retail seller enters into 200 or more
3    separate transactions for the sale of tangible personal
4    property to consumers in this State.
5    A remote retail seller that meets or exceeds the threshold
6in either paragraph (1) or (2) of this subsection shall be
7liable for taxes imposed by this Act on all sales made by that
8remote retail seller of taxable products under this Act to
9Illinois consumers on which the tax has not been paid by a
10distributor.
11    The remote retail seller shall determine on a quarterly
12basis, ending on the last day of March, June, September, and
13December, whether it meets the criteria of either paragraph
14(1) or (2) of this subsection for the preceding 12-month
15period. If the remote retail seller meets the criteria of
16either paragraph (1) or (2) for a 12-month period, then the
17remote retail seller is considered to be engaged in business
18as a remote retail seller in this State and is required to
19collect and remit the tax imposed under this Act and to file
20all applicable returns for the next 12-month period. At the
21end of that 12-month period, the remote retail seller shall
22determine whether the remote retail seller met the criteria of
23either paragraph (1) or (2) for the preceding 12-month period.
24If the remote retail seller met the criteria in either
25paragraph (1) or (2) for the preceding 12-month period, the
26remote retail seller is considered to be engaged in business

 

 

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1as a remote retail seller in this State and is required to
2collect and remit the tax imposed under this Act and file
3returns for the subsequent year. If, at the end of a one-year
4period, a remote retail seller that was required to collect
5and remit the tax imposed under this Act determines that the
6remote retail seller did not meet the criteria in either
7paragraph (1) or (2) during the preceding 12-month period,
8then the remote retail seller shall certify to the Department,
9in the form and manner required by the Department, that the
10remote retail seller did not meet the criteria in either
11paragraph (1) or (2) during the preceding 12-month period and
12shall subsequently determine on a quarterly basis, ending on
13the last day of March, June, September, and December, whether
14the remote retail seller meets the criteria of either
15paragraph (1) or (2) for the preceding 12-month period.
16    (b) Notwithstanding subsection (a) of this Section,
17stamping distributors of packages of little cigars containing
1820 or 25 little cigars sold or otherwise disposed of in this
19State shall remit the tax by purchasing tax stamps from the
20Department and affixing them to packages of little cigars in
21the same manner as stamps are purchased and affixed to
22cigarettes under the Cigarette Tax Act, unless the stamping
23distributor sells or otherwise disposes of those packages of
24little cigars to another stamping distributor. Only persons
25meeting the definition of "stamping distributor" contained in
26Section 10-5 of this Act may affix stamps to packages of little

 

 

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1cigars containing 20 or 25 little cigars. Stamping
2distributors may not sell or dispose of little cigars at
3retail to consumers or users at locations where stamping
4distributors affix stamps to packages of little cigars
5containing 20 or 25 little cigars.
6    (c) The impact of the tax levied by this Act is imposed
7upon distributors engaged in the business of selling tobacco
8products to retailers or consumers in this State. Beginning
9January 1, 2025, the impact of the tax levied by this Act is
10also imposed upon remote retail sellers that meet the criteria
11in subsection (a-5) of this Section. A remote retail seller
12shall pay the tax on all sales of cigars and pipe tobacco to
13consumers in this State on which the tax has not been paid by a
14distributor. Whenever a stamping distributor brings or causes
15to be brought into this State from without this State, or
16purchases from without or within this State, any packages of
17little cigars containing 20 or 25 little cigars upon which
18there are no tax stamps affixed as required by this Act, for
19purposes of resale or disposal in this State to a person not a
20stamping distributor, then such stamping distributor shall pay
21the tax to the Department and add the amount of the tax to the
22price of such packages sold by such stamping distributor.
23Payment of the tax shall be evidenced by a stamp or stamps
24affixed to each package of little cigars containing 20 or 25
25little cigars.
26    Stamping distributors paying the tax to the Department on

 

 

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1packages of little cigars containing 20 or 25 little cigars
2sold to other distributors, wholesalers or retailers shall add
3the amount of the tax to the price of the packages of little
4cigars containing 20 or 25 little cigars sold by such stamping
5distributors.
6    (d) Beginning on January 1, 2013, the tax rate imposed per
7ounce of moist snuff may not exceed 15% of the tax imposed upon
8a package of 20 cigarettes pursuant to the Cigarette Tax Act.
9    (d-5) Notwithstanding any other provisions of this Section
10to the contrary, beginning January 1, 2025, and continuing
11through December 31, 2027, the tax per cigar sold or otherwise
12disposed of shall not exceed $1 per cigar. This subsection
13shall not apply to little cigars.
14    (e) All moneys received by the Department under this Act
15from sales occurring prior to July 1, 2012 shall be paid into
16the Long-Term Care Provider Fund of the State Treasury. Of the
17moneys received by the Department from sales occurring on or
18after July 1, 2012, except for moneys received from the tax
19imposed on the sale of little cigars, 50% shall be paid into
20the Long-Term Care Provider Fund and 50% shall be paid into the
21Healthcare Provider Relief Fund. Beginning July 1, 2013, all
22moneys received by the Department under this Act from the tax
23imposed on little cigars shall be distributed as provided in
24Section 2 of the Cigarette Tax Act.
25(Source: P.A. 101-31, eff. 6-28-19.)
 

 

 

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1    (35 ILCS 143/10-24 new)
2    Sec. 10-24. Remote retail seller's license. Beginning on
3January 1, 2025, it shall be unlawful for any person who meets
4the criteria established in subsection (a-5) of Section 10-10
5to engage in business as a remote retail seller within the
6meaning of this Act without first having obtained a license to
7do so from the Department. Application for that license shall
8be made to the Department, by electronic means, in a form
9prescribed by the Department. Each applicant for a license
10shall furnish to the Department, in an electronic format
11established by the Department, the following information:
12        (1) the name and address of the applicant;
13        (2) the address of the location at which the applicant
14    proposes to engage in business as a remote retail seller
15    outside this State; and
16        (3) such other additional information as the
17    Department may lawfully require by rule.
18    Beginning on January 1, 2025, in addition to obtaining a
19license to engage in business as a remote retail seller in this
20State, no remote retail seller who meets the criteria
21established in subsection (a-5) of Section 10-10 may engage in
22business as a remote retail seller within the meaning of this
23Act without registering under the Retailers' Occupation Tax
24Act pursuant to Section 2a of that Act.
25    A separate annual license shall be obtained for each place
26of business at which a person who is required to procure a

 

 

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1remote retail seller's license under this Section proposes to
2engage in business as a remote retail seller in Illinois under
3this Act. All licenses issued by the Department under this
4Section shall be valid for a period not to exceed one year
5after issuance unless sooner revoked, canceled, or suspended
6as provided in this Act. All licenses must be renewed on an
7annual basis. An application submitted by a remote retail
8seller shall include an acknowledgement consenting to the
9jurisdiction of the Department and the courts of this State
10concerning the enforcement of this Act and any related laws,
11rules, and regulations, including authorizing the Department
12of Revenue to conduct inspections and audits for the purpose
13of ensuring compliance with this Act and to issue penalties
14for violations of this Act.
15    Each remote retail seller must perform age verification
16through an independent, third-party age verification service
17that compares information available from a commercially
18available database, or aggregate of databases, that are
19regularly used by government agencies and businesses for the
20purpose of age and identity verification to the personal
21information entered by the individual during the ordering
22process that establishes that the individual is of age.
23    If the provisions of subsection (a-5) of Section 10-10 are
24met, and the tax imposed under this Act is being remitted using
25the actual cost list method to calculate the tax, each remote
26retail seller must provide the remote retail sellers's

 

 

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1certified actual cost list to the Department for each SKU to be
2offered for remote retail sale in the subsequent calendar
3year. The actual cost list shall be updated by the remote
4retail seller quarterly as new SKUs are added to the remote
5retail seller's inventory. New SKUs will be added using the
6actual cost first paid for the SKU.
7    The following are ineligible to receive a remote retail
8seller's license under this Act:
9        (1) a person who has been convicted of a felony under
10    any federal or State law for smuggling cigarettes or
11    tobacco products or tobacco tax evasion, if the
12    Department, after investigation and a hearing if requested
13    by the applicant, determines that such person has not been
14    sufficiently rehabilitated to warrant the public trust;
15        (2) a corporation, if any officer, manager or director
16    thereof, or any stockholder or stockholders owning in the
17    aggregate more than 5% of the stock of such corporation,
18    would not be eligible to receive a license under this Act
19    for any reason; and
20        (3) any person who is in default to the State of
21    Illinois for moneys due under this Act or any other tax Act
22    administered by the Department.
23    The Department, upon receipt of an application, in proper
24form, from a person who is eligible to receive a remote retail
25seller's license under this Act, shall issue to such applicant
26a license in form as prescribed by the Department, which

 

 

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1license shall permit the applicant to which it is issued to
2engage in business as a remote retail seller under this Act at
3the place shown in the remote retail seller's application. All
4licenses issued by the Department under this Section shall be
5valid for a period not to exceed one year after issuance unless
6sooner revoked, canceled or suspended as provided in this Act.
7No license issued under this Section is transferable or
8assignable. A person who obtains a license as a retailer who
9ceases to do business as specified in the license, or who never
10commenced business, or whose license is suspended or revoked,
11shall immediately surrender the license to the Department.
12    The Department may, in its discretion, upon application,
13authorize the payment of the tax imposed under Section 10-10
14by any remote retail seller not otherwise subject to the tax
15imposed under this Act who, to the satisfaction of the
16Department, furnishes adequate security to ensure payment of
17the tax. The remote retail seller shall be issued, without
18charge, a license to remit the tax. When so authorized, it
19shall be the duty of the remote retail seller to remit the tax
20imposed upon the actual cost or actual cost list price of the
21cigars or pipe tobacco sold or otherwise disposed of to
22consumers located in this State, in the same manner and
23subject to the same requirements as any other remote retail
24seller required to be licensed under this Act. It shall be the
25duty of the remote retail seller to remit the tax imposed upon
26the actual cost or actual cost list price of cigar or pipe

 

 

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1tobacco, sold or otherwise disposed of to consumers located in
2this State, in the same manner and subject to the same
3requirements as any other remote retail seller required to be
4licensed under this Act.
5    Any person aggrieved by any decision of the Department
6under this Section may, within 30 days after notice of the
7decision, protest and request a hearing. Upon receiving a
8request for a hearing, the Department shall give notice to the
9person requesting the hearing of the time and place fixed for
10the hearing and shall hold a hearing in conformity with the
11provisions of this Act and then issue its final administrative
12decision in the matter to that person. In the absence of a
13protest and request for a hearing within 30 days, the
14Department's decision shall become final without any further
15determination being made or notice given.
 
16    (35 ILCS 143/10-25)
17    Sec. 10-25. License actions.
18    (a) The Department may, after notice and a hearing,
19revoke, cancel, or suspend the license of any distributor, or
20retailer, or remote retail seller who violates any of the
21provisions of this Act, fails to keep books and records as
22required under this Act, fails to make books and records
23available for inspection upon demand by a duly authorized
24employee of the Department, or violates a rule or regulation
25of the Department for the administration and enforcement of

 

 

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1this Act. The notice shall specify the alleged violation or
2violations upon which the revocation, cancellation, or
3suspension proceeding is based.
4    (a-5) The Department may, after notice and a hearing,
5revoke, cancel, or suspend the license of a distributor or
6remote retail seller that fails to properly register and remit
7tax under the Retailers' Occupation Tax Act for all tobacco
8products that are sold to consumers in this State.
9    (a-10) The Department may, after notice and a hearing,
10revoke, cancel, or suspend the license of a distributor or
11remote retail seller who is found in violation of any law,
12rule, or regulation of the state where the business is located
13as listed on the license issued by the Department. The notice
14shall specify the alleged violation or violations upon which
15the revocation, cancellation, or suspension proceeding is
16based.
17    (b) The Department may revoke, cancel, or suspend the
18license of any distributor for a violation of the Tobacco
19Product Manufacturers' Escrow Enforcement Act as provided in
20Section 20 of that Act.
21    (c) If the retailer has a training program that
22facilitates compliance with minimum-age tobacco laws, the
23Department shall suspend for 3 days the license of that
24retailer for a fourth or subsequent violation of the
25Prevention of Tobacco Use by Persons under 21 Years of Age and
26Sale and Distribution of Tobacco Products Act, as provided in

 

 

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1subsection (a) of Section 2 of that Act. For the purposes of
2this Section, any violation of subsection (a) of Section 2 of
3the Prevention of Tobacco Use by Persons under 21 Years of Age
4and Sale and Distribution of Tobacco Products Act occurring at
5the retailer's licensed location, during a 24-month period,
6shall be counted as a violation against the retailer.
7    If the retailer does not have a training program that
8facilitates compliance with minimum-age tobacco laws, the
9Department shall suspend for 3 days the license of that
10retailer for a second violation of the Prevention of Tobacco
11Use by Persons under 21 Years of Age and Sale and Distribution
12of Tobacco Products Act, as provided in subsection (a-5) of
13Section 2 of that Act.
14    If the retailer does not have a training program that
15facilitates compliance with minimum-age tobacco laws, the
16Department shall suspend for 7 days the license of that
17retailer for a third violation of the Prevention of Tobacco
18Use by Persons under 21 Years of Age and Sale and Distribution
19of Tobacco Products Act, as provided in subsection (a-5) of
20Section 2 of that Act.
21    If the retailer does not have a training program that
22facilitates compliance with minimum-age tobacco laws, the
23Department shall suspend for 30 days the license of a retailer
24for a fourth or subsequent violation of the Prevention of
25Tobacco Use by Persons under 21 Years of Age and Sale and
26Distribution of Tobacco Products Act, as provided in

 

 

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1subsection (a-5) of Section 2 of that Act.
2    A training program that facilitates compliance with
3minimum-age tobacco laws must include at least the following
4elements: (i) it must explain that only individuals displaying
5valid identification demonstrating that they are 21 years of
6age or older shall be eligible to purchase cigarettes or
7tobacco products and (ii) it must explain where a clerk can
8check identification for a date of birth. The training may be
9conducted electronically. Each retailer that has a training
10program shall require each employee who completes the training
11program to sign a form attesting that the employee has
12received and completed tobacco training. The form shall be
13kept in the employee's file and may be used to provide proof of
14training.
15    (d) The Department may, by application to any circuit
16court, obtain an injunction restraining any person who engages
17in business as a distributor or remote retailer of tobacco
18products without a license (either because the his or her
19license has been revoked, canceled, or suspended or because of
20a failure to obtain a license in the first instance) from
21engaging in that business until that person, as if that person
22were a new applicant for a license, complies with all of the
23conditions, restrictions, and requirements of Section 10-20 or
24Section 10-24 of this Act and qualifies for and obtains a
25license. Refusal or neglect to obey the order of the court may
26result in punishment for contempt.

 

 

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1(Source: P.A. 100-940, eff. 8-17-18; 101-2, eff. 7-1-19.)
 
2    (35 ILCS 143/10-30)
3    Sec. 10-30. Returns.
4    (a) Every distributor shall, on or before the 15th day of
5each month, file a return with the Department covering the
6preceding calendar month. The return shall disclose the
7wholesale price, or beginning on January 1, 2025, the actual
8cost or actual cost list price for all tobacco products other
9than electronic cigarettes, little cigars or moist snuff and
10the quantity in ounces of moist snuff sold or otherwise
11disposed of and other information that the Department may
12reasonably require. The return shall be filed upon a form
13prescribed and furnished by the Department.
14    (a-5) Beginning February 1, 2025, every remote retail
15seller shall, on or before the 15th day of each month, file a
16return with the Department covering the preceding calendar
17month. The remote retail seller's return must report all
18cigars or pipe tobacco brought in or caused to be brought in
19from outside the State or shipped or transported to consumers
20within the State during the preceding calendar month. The
21return must include further information as the Department may
22prescribe and must show the total actual cost or actual cost
23list price paid by a remote retail seller for a stock keeping
24unit for the previous calendar month. The return must show the
25amount of tax due for all remote retail sales made from outside

 

 

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1the State, to a consumer within the State during the preceding
2calendar month. It is the intent and purpose of this
3amendatory Act of the 103rd General Assembly that the remote
4retail seller remit the tax at the time the return is filed. It
5is further the intent and purpose of this amendatory Act of the
6103rd General Assembly to impose the tax under this Act only
7once on all tobacco products, including cigars and pipe
8tobacco, sold in the State.
9    (b) In addition to the information required under
10subsection (a), on or before the 15th day of each month,
11covering the preceding calendar month, each stamping
12distributor shall, on forms prescribed and furnished by the
13Department, report the quantity of little cigars sold or
14otherwise disposed of, including the number of packages of
15little cigars sold or disposed of during the month containing
1620 or 25 little cigars.
17    (c) At the time when any return of any distributor or
18remote retail seller is due to be filed with the Department,
19the distributor shall also remit to the Department the tax
20liability that the distributor or remote retail seller has
21incurred for transactions occurring in the preceding calendar
22month. Starting January 1, 2025, the distributor or remote
23remote retail seller shall remit the tax liability, less a
24discount of 1.75%, not to exceed $1,000 per month, which is
25allowed to reimburse the distributor or remote retail seller
26for the expenses incurred in keeping records, preparing and

 

 

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1filing returns, remitting the tax, and supplying data to the
2Department on request. No discount may be claimed by a
3taxpayer on returns not timely filed and for taxes not timely
4remitted. No discount may be claimed by a taxpayer for any
5return that is not filed electronically.
6    (d) The Department may adopt rules to require the
7electronic filing of any return or document required to be
8filed under this Act. Those rules may provide for exceptions
9from the filing requirement set forth in this paragraph for
10persons who demonstrate that they do not have access to the
11Internet and petition the Department to waive the electronic
12filing requirement.
13    (e) If any payment provided for in this Section exceeds
14the distributor's liabilities under this Act, as shown on an
15original return, the distributor may credit such excess
16payment against liability subsequently to be remitted to the
17Department under this Act, in accordance with reasonable rules
18adopted by the Department.
19(Source: P.A. 100-1171, eff. 1-4-19.)
 
20    (35 ILCS 143/10-35)
21    Sec. 10-35. Record keeping.
22    (a) Every distributor, as defined in Section 10-5, shall
23keep complete and accurate records of tobacco products held,
24purchased, manufactured, brought in or caused to be brought in
25from without the State, and tobacco products sold, or

 

 

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1otherwise disposed of, and shall preserve and keep all
2invoices, bills of lading, sales records, and copies of bills
3of sale, the wholesale price, and beginning January 1, 2025
4the actual cost or actual cost list price for tobacco products
5sold or otherwise disposed of, an inventory of tobacco
6products prepared as of December 31 of each year or as of the
7last day of the distributor's fiscal year if the distributor
8he or she files federal income tax returns on the basis of a
9fiscal year, and other pertinent papers and documents relating
10to the manufacture, purchase, sale, or disposition of tobacco
11products. Every sales invoice issued by a licensed distributor
12to a retailer in this State shall contain the distributor's
13Tobacco Products License number unless the distributor has
14been granted a waiver by the Department in response to a
15written request in cases where (i) the distributor sells
16little cigars or other tobacco products only to licensed
17retailers that are wholly-owned by the distributor or owned by
18a wholly-owned subsidiary of the distributor; (ii) the
19licensed retailer obtains little cigars or other tobacco
20products only from the distributor requesting the waiver; and
21(iii) the distributor affixes the tax stamps to the original
22packages of little cigars or has or will pay the tax on the
23other tobacco products sold to the licensed retailer. The
24distributor shall file a written request with the Department,
25and, if the Department determines that the distributor meets
26the conditions for a waiver, the Department shall grant the

 

 

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1waiver.
2    (b) Every retailer, as defined in Section 10-5, whether or
3not the retailer has obtained a retailer's license pursuant to
4Section 4g, shall keep complete and accurate records of
5tobacco products held, purchased, sold, or otherwise disposed
6of, and shall preserve and keep all invoices, bills of lading,
7sales records, and copies of bills of sale, returns and other
8pertinent papers and documents relating to the purchase, sale,
9or disposition of tobacco products. Such records need not be
10maintained on the licensed premises, but must be maintained in
11the State of Illinois; however, if access is available
12electronically, the records may be maintained out of state.
13However, all original invoices or copies thereof covering
14purchases of tobacco products must be retained on the licensed
15premises for a period of 90 days after such purchase, unless
16the Department has granted a waiver in response to a written
17request in cases where records are kept at a central business
18location within the State of Illinois or in cases where
19records that are available electronically are maintained out
20of state. The Department shall adopt rules regarding the
21eligibility for a waiver, revocation of a waiver, and
22requirements and standards for maintenance and accessibility
23of records located at a central location out-of-State pursuant
24to a waiver provided under this Section.
25    (b-5) Every remote retail seller, as defined in Section
2610-5 shall keep complete and accurate records of tobacco

 

 

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1products held, purchased, sold, or otherwise disposed of and
2shall preserve and keep all invoices, bills of lading, sales
3records, and copies of bills of sale, returns and other
4pertinent papers and documents relating to the purchase, sale,
5or disposition of tobacco products. Such records must be on
6the remote retail seller's premises but need not be maintained
7in the State of Illinois; however, remote retail sellers shall
8also provide access electronically. However, all original
9invoices or copies thereof covering purchases of tobacco
10products must be retained on the remote retail seller's
11premises until the expiration of the period with respect to
12which the Department is authorized to issue a notice of tax
13liability.
14    (c) Books, records, papers, and documents that are
15required by this Act to be kept shall, at all times during the
16usual business hours of the day, be subject to inspection by
17the Department or its duly authorized agents and employees.
18The books, records, papers, and documents for any period with
19respect to which the Department is authorized to issue a
20notice of tax liability shall be preserved until the
21expiration of that period.
22(Source: P.A. 99-192, eff. 1-1-16; 100-940, eff. 8-17-18.)
 
23    (35 ILCS 143/10-37)
24    Sec. 10-37. Proof of payment of tax imposed by this Act.
25Every licensed distributor of tobacco products in this State

 

 

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1is required to show proof of the tax having been paid as
2required by this Act by displaying its Tobacco Products
3License number on every sales invoice issued to a retailer in
4this State. Every licensed remote retail seller of tobacco
5products in this State is required to show proof of the tax
6having been paid as required by this Act by displaying its
7Tobacco Products License number on every sales invoice issued
8to a consumer in this State. No retailer shall possess tobacco
9products without either a proper invoice indicating that the
10tobacco products tax was paid by a distributor for the tobacco
11products in the retailer's possession or other proof that the
12tax was paid by the retailer if it has purchased tobacco
13products on which tax has not been paid as required by this
14Act. Failure to comply with the provisions of this paragraph
15may be grounds for revocation of a distributor's, remote
16retail seller's, or retailer's license in accordance with
17Section 10-25 of this Act or Section 6 of the Cigarette Tax
18Act. In addition, the Department may impose a civil penalty
19not to exceed $1,000 for the first violation and $3,000 for
20each subsequent violation, which shall be deposited into the
21Tax Compliance and Administration Fund.
22(Source: P.A. 100-940, eff. 8-17-18.)
 
23    (35 ILCS 143/10-38)
24    Sec. 10-38. Presumption for unlicensed distributors,
25remote retail sellers, or persons. Whenever any person obtains

 

 

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1tobacco products from an unlicensed in-state or out-of-state
2distributor, remote retail seller, or person, a prima facie
3presumption shall arise that the tax imposed by this Act on
4such tobacco products has not been paid in violation of this
5Act. Invoices or other documents kept in the normal course of
6business in the possession of a person reflecting purchases of
7tobacco products from an unlicensed in-state or out-of-state
8distributor, remote retail seller, or person or invoices or
9other documents kept in the normal course of business obtained
10by the Department from in-state or out-of-state distributors,
11remote retail sellers, or persons, are sufficient to raise the
12presumption that the tax imposed by this Act has not been paid.
13If a presumption is raised, the Department may assess tax,
14penalty, and interest on the tobacco products. In addition,
15any person who violates this Section is liable to pay to the
16Department, for deposit in the Tax Compliance and
17Administration Fund, a penalty of $1,000 for the first
18violation and $3,000 for any subsequent violation. The
19Department may adopt rules to administer the penalties under
20this Section.
21(Source: P.A. 100-940, eff. 8-17-18.)
 
22    (35 ILCS 143/10-45)
23    Sec. 10-45. Incorporation by reference. All of the
24provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h,
255i, 5j, 6, 6a, 6b, 6c, 8, 9, 10, 11, 11a, and 12 of the

 

 

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1Retailers' Occupation Tax Act, and all applicable provisions
2of the Uniform Penalty and Interest Act that are not
3inconsistent with this Act, apply to distributors and remote
4retail sellers of tobacco products to the same extent as if
5those provisions were included in this Act. References in the
6incorporated Sections of the Retailers' Occupation Tax Act to
7retailers, to sellers, or to persons engaged in the business
8of selling tangible personal property mean distributors or
9remote retail sellers when used in this Act. References in the
10incorporated Sections to sales of tangible personal property
11mean sales of tobacco products when used in this Act.
12    All of the provisions of Sections 7, 8, 8a, 16, 18a, 18b,
1318c, 22, 23, 24, 26, 27, and 28a of the Cigarette Tax Act which
14are not inconsistent with this Act shall apply, as far as
15practicable, to the subject matter of this Act to the same
16extent as if those provisions were included in this Act.
17References in the incorporated Sections to sales of cigarettes
18mean sales of little cigars in packages of 20 or 25 little
19cigars.
20(Source: P.A. 98-273, eff. 8-9-13.)
 
21    (35 ILCS 143/10-50)
22    Sec. 10-50. Violations and penalties. When the amount due
23is under $300, any distributor or remote retail seller who
24fails to file a return, willfully fails or refuses to make any
25payment to the Department of the tax imposed by this Act, or

 

 

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1files a fraudulent return, or any officer or agent of a
2corporation engaged in the business of distributing or
3engaging in remote retail sales of tobacco products to
4retailers or and consumers located in this State who signs a
5fraudulent return filed on behalf of the corporation, or any
6accountant or other agent who knowingly enters false
7information on the return of any taxpayer under this Act is
8guilty of a Class 4 felony.
9    Any person who violates any provision of Section 10-20,
1010-21, or 10-22, or 10-24 of this Act, fails to keep books and
11records as required under this Act, or willfully violates a
12rule or regulation of the Department for the administration
13and enforcement of this Act is guilty of a Class 4 felony. A
14person commits a separate offense on each day that he or she
15engages in business in violation of Section 10-20, 10-21, or
1610-22, or 10-24 of this Act. If a person fails to produce the
17books and records for inspection by the Department upon
18request, a prima facie presumption shall arise that the person
19has failed to keep books and records as required under this
20Act. A person who is unable to rebut this presumption is in
21violation of this Act and is subject to the penalties provided
22in this Section.
23    When the amount due is under $300, any person who accepts
24money that is due to the Department under this Act from a
25taxpayer for the purpose of acting as the taxpayer's agent to
26make the payment to the Department, but who fails to remit the

 

 

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1payment to the Department when due, is guilty of a Class 4
2felony.
3    Any person who violates any provision of Sections 10-20,
410-21 and 10-22 of this Act, fails to keep books and records as
5required under this Act, or willfully violates a rule or
6regulation of the Department for the administration and
7enforcement of this Act is guilty of a business offense and may
8be fined up to $5,000. If a person fails to produce books and
9records for inspection by the Department upon request, a prima
10facie presumption shall arise that the person has failed to
11keep books and records as required under this Act. A person who
12is unable to rebut this presumption is in violation of this Act
13and is subject to the penalties provided in this Section. A
14person commits a separate offense on each day that he or she
15engages in business in violation of Sections 10-20, 10-21 and
1610-22 of this Act.
17    When the amount due is $300 or more, any distributor or
18remote retail seller who files, or causes to be filed, a
19fraudulent return, or any officer or agent of a corporation
20engaged in the business of distributing or engaging in remote
21retail sales of tobacco products to retailers or and consumers
22located in this State who files or causes to be filed or signs
23or causes to be signed a fraudulent return filed on behalf of
24the corporation, or any accountant or other agent who
25knowingly enters false information on the return of any
26taxpayer under this Act is guilty of a Class 3 felony.

 

 

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1    When the amount due is $300 or more, any person engaged in
2the business of distributing or engaging in remote retail
3sales of tobacco products to retailers or and consumers
4located in this State who fails to file a return, willfully
5fails or refuses to make any payment to the Department of the
6tax imposed by this Act, or accepts money that is due to the
7Department under this Act from a taxpayer for the purpose of
8acting as the taxpayer's agent to make payment to the
9Department but fails to remit such payment to the Department
10when due is guilty of a Class 3 felony.
11    When the amount due is under $300, any retailer who fails
12to file a return, willfully fails or refuses to make any
13payment to the Department of the tax imposed by this Act, or
14files a fraudulent return, or any officer or agent of a
15corporation engaged in the retail business of selling tobacco
16products to purchasers of tobacco products for use and
17consumption located in this State who signs a fraudulent
18return filed on behalf of the corporation, or any accountant
19or other agent who knowingly enters false information on the
20return of any taxpayer under this Act is guilty of a Class A
21misdemeanor for a first offense and a Class 4 felony for each
22subsequent offense.
23    When the amount due is $300 or more, any retailer who fails
24to file a return, willfully fails or refuses to make any
25payment to the Department of the tax imposed by this Act, or
26files a fraudulent return, or any officer or agent of a

 

 

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1corporation engaged in the retail business of selling tobacco
2products to purchasers of tobacco products for use and
3consumption located in this State who signs a fraudulent
4return filed on behalf of the corporation, or any accountant
5or other agent who knowingly enters false information on the
6return of any taxpayer under this Act is guilty of a Class 4
7felony.
8    Any person whose principal place of business is in this
9State and who is charged with a violation under this Section
10shall be tried in the county where his or her principal place
11of business is located unless he or she asserts a right to be
12tried in another venue. If the taxpayer does not have his or
13her principal place of business in this State, however, the
14hearing must be held in Sangamon County unless the taxpayer
15asserts a right to be tried in another venue.
16    Any taxpayer or agent of a taxpayer who with the intent to
17defraud purports to make a payment due to the Department by
18issuing or delivering a check or other order upon a real or
19fictitious depository for the payment of money, knowing that
20it will not be paid by the depository, is guilty of a deceptive
21practice in violation of Section 17-1 of the Criminal Code of
222012.
23    A prosecution for a violation described in this Section
24may be commenced within 3 years after the commission of the act
25constituting the violation.
26(Source: P.A. 100-201, eff. 8-18-17; 100-940, eff. 8-17-18.)
 

 

 

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1    Section 99. Effective date. This Act takes effect upon
2becoming law.".