103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1850

 

Introduced 2/9/2023, by Sen. Elgie R. Sims, Jr.

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 130/2  from Ch. 120, par. 453.2

    Amends the Cigarette Tax Act. Makes changes concerning the distribution of moneys collected pursuant to (i) the Cigarette Tax Act, (ii) the Cigarette Use Tax Act, and (iii) the tax imposed on little cigars under the Tobacco Products Tax Act of 1995. Effective immediately.


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A BILL FOR

 

SB1850LRB103 27454 HLH 53826 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 Cigarette Tax Act is amended by changing
5Section 2 as follows:
 
6    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
7    Sec. 2. Tax imposed; rate; collection, payment, and
8distribution; discount.
9    (a) Beginning on July 1, 2019, in place of the aggregate
10tax rate of 99 mills previously imposed by this Act, a tax is
11imposed upon any person engaged in business as a retailer of
12cigarettes at the rate of 149 mills per cigarette sold or
13otherwise disposed of in the course of such business in this
14State.
15    (b) The payment of such taxes shall be evidenced by a stamp
16affixed to each original package of cigarettes, or an
17authorized substitute for such stamp imprinted on each
18original package of such cigarettes underneath the sealed
19transparent outside wrapper of such original package, as
20hereinafter provided. However, such taxes are not imposed upon
21any activity in such business in interstate commerce or
22otherwise, which activity may not under the Constitution and
23statutes of the United States be made the subject of taxation

 

 

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1by this State.
2    Out of the 149 mills per cigarette tax imposed by
3subsection (a), until July 1, 2023, the revenues received from
44 mills shall be paid into the Common School Fund each month,
5not to exceed $9,000,000 per month. Out of the 149 mills per
6cigarette tax imposed by subsection (a), until July 1, 2023,
7all of the revenues received from 7 mills shall be paid into
8the Common School Fund each month. Out of the 149 mills per
9cigarette tax imposed by subsection (a), until July 1, 2023,
1050 mills per cigarette each month shall be paid into the
11Healthcare Provider Relief Fund.
12    Beginning on July 1, 2006 and until July 1, 2023, all of
13the moneys received by the Department of Revenue pursuant to
14this Act and the Cigarette Use Tax Act, other than the moneys
15that are dedicated to the Common School Fund and, beginning on
16the effective date of this amendatory Act of the 97th General
17Assembly, other than the moneys from the additional taxes
18imposed by this amendatory Act of the 97th General Assembly
19that must be paid each month into the Healthcare Provider
20Relief Fund, and other than the moneys from the additional
21taxes imposed by this amendatory Act of the 101st General
22Assembly that must be paid each month under subsection (c),
23shall be distributed each month as follows: first, there shall
24be paid into the General Revenue Fund an amount that, when
25added to the amount paid into the Common School Fund for that
26month, equals $29,200,000; then, from the moneys remaining, if

 

 

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1any amounts required to be paid into the General Revenue Fund
2in previous months remain unpaid, those amounts shall be paid
3into the General Revenue Fund; then from the moneys remaining,
4$5,000,000 per month shall be paid into the School
5Infrastructure Fund; then, if any amounts required to be paid
6into the School Infrastructure Fund in previous months remain
7unpaid, those amounts shall be paid into the School
8Infrastructure Fund; then the moneys remaining, if any, shall
9be paid into the Long-Term Care Provider Fund. Any amounts
10required to be paid into the General Revenue Fund, the School
11Infrastructure Fund, the Long-Term Care Provider Fund, the
12Common School Fund, the Capital Projects Fund, or the
13Healthcare Provider Relief Fund under this subsection that
14remain unpaid as of July 1, 2023 shall be deemed satisfied on
15that date, eliminating any deficiency accrued through that
16date.
17    (c) Beginning on July 1, 2019 and until July 1, 2023, all
18of the moneys from the additional taxes imposed by Public Act
19101-31, except for moneys received from the tax on electronic
20cigarettes, received by the Department of Revenue pursuant to
21this Act, the Cigarette Use Tax Act, and the Tobacco Products
22Tax Act of 1995 shall be distributed each month into the
23Capital Projects Fund.
24    (c-5) Beginning on July 1, 2023, all of the moneys
25received by the Department of Revenue pursuant to (i) this
26Act, (ii) the Cigarette Use Tax Act, and (iii) the tax imposed

 

 

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1on little cigars under Section 10-10 of the Tobacco Products
2Tax Act of 1995 shall be paid each month as follows:
3        (1) 7% into the Common School Fund;
4        (2) 34% into the Healthcare Provider Relief Fund;
5        (3) 34% into the Capital Projects Fund; and
6        (4) 25% into the General Revenue Fund.
7    (d) Until July 1, 2023, except Except for moneys received
8from the additional taxes imposed by Public Act 101-31, moneys
9collected from the tax imposed on little cigars under Section
1010-10 of the Tobacco Products Tax Act of 1995 shall be included
11with the moneys collected under the Cigarette Tax Act and the
12Cigarette Use Tax Act when making distributions to the Common
13School Fund, the Healthcare Provider Relief Fund, the General
14Revenue Fund, the School Infrastructure Fund, and the
15Long-Term Care Provider Fund under this Section. Any amounts,
16including moneys collected from the tax imposed on little
17cigars under Section 10-10 of the Tobacco Products Tax Act of
181995, that are required to be paid into the General Revenue
19Fund, the School Infrastructure Fund, the Long-Term Care
20Provider Fund, the Common School Fund, the Capital Projects
21Fund, or the Healthcare Provider Relief Fund under subsection
22(b) that remain unpaid as of July 1, 2023 shall be deemed
23satisfied on that date, eliminating any deficiency accrued
24through that date. Beginning on July 1, 2023, moneys collected
25from the tax imposed on little cigars under Section 10-10 of
26the Tobacco Products Tax Act of 1995 shall be included with the

 

 

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1moneys collected under the Cigarette Tax Act and the Cigarette
2Use Tax Act when making distributions under subsections (c-5).
3    (e) If the tax imposed herein terminates or has
4terminated, distributors who have bought stamps while such tax
5was in effect and who therefore paid such tax, but who can
6show, to the Department's satisfaction, that they sold the
7cigarettes to which they affixed such stamps after such tax
8had terminated and did not recover the tax or its equivalent
9from purchasers, shall be allowed by the Department to take
10credit for such absorbed tax against subsequent tax stamp
11purchases from the Department by such distributor.
12    (f) The impact of the tax levied by this Act is imposed
13upon the retailer and shall be prepaid or pre-collected by the
14distributor for the purpose of convenience and facility only,
15and the amount of the tax shall be added to the price of the
16cigarettes sold by such distributor. Collection of the tax
17shall be evidenced by a stamp or stamps affixed to each
18original package of cigarettes, as hereinafter provided. Any
19distributor who purchases stamps may credit any excess
20payments verified by the Department against amounts
21subsequently due for the purchase of additional stamps, until
22such time as no excess payment remains.
23    (g) Each distributor shall collect the tax from the
24retailer at or before the time of the sale, shall affix the
25stamps as hereinafter required, and shall remit the tax
26collected from retailers to the Department, as hereinafter

 

 

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1provided. Any distributor who fails to properly collect and
2pay the tax imposed by this Act shall be liable for the tax.
3    (h) Any distributor having cigarettes in his or her
4possession on July 1, 2019 to which tax stamps have been
5affixed, and any distributor having stamps in his or her
6possession on July 1, 2019 that have not been affixed to
7packages of cigarettes before July 1, 2019, is required to pay
8the additional tax that begins on July 1, 2019 imposed by this
9amendatory Act of the 101st General Assembly to the extent
10that the volume of affixed and unaffixed stamps in the
11distributor's possession on July 1, 2019 exceeds the average
12monthly volume of cigarette stamps purchased by the
13distributor in calendar year 2018. This payment, less the
14discount provided in subsection (l), is due when the
15distributor first makes a purchase of cigarette stamps on or
16after July 1, 2019 or on the first due date of a return under
17this Act occurring on or after July 1, 2019, whichever occurs
18first. Those distributors may elect to pay the additional tax
19on packages of cigarettes to which stamps have been affixed
20and on any stamps in the distributor's possession that have
21not been affixed to packages of cigarettes in their possession
22on July 1, 2019 over a period not to exceed 12 months from the
23due date of the additional tax by notifying the Department in
24writing. The first payment for distributors making such
25election is due when the distributor first makes a purchase of
26cigarette tax stamps on or after July 1, 2019 or on the first

 

 

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1due date of a return under this Act occurring on or after July
21, 2019, whichever occurs first. Distributors making such an
3election are not entitled to take the discount provided in
4subsection (l) on such payments.
5    (i) Any retailer having cigarettes in its possession on
6July 1, 2019 to which tax stamps have been affixed is not
7required to pay the additional tax that begins on July 1, 2019
8imposed by this amendatory Act of the 101st General Assembly
9on those stamped cigarettes.
10    (j) Distributors making sales of cigarettes to secondary
11distributors shall add the amount of the tax to the price of
12the cigarettes sold by the distributors. Secondary
13distributors making sales of cigarettes to retailers shall
14include the amount of the tax in the price of the cigarettes
15sold to retailers. The amount of tax shall not be less than the
16amount of taxes imposed by the State and all local
17jurisdictions. The amount of local taxes shall be calculated
18based on the location of the retailer's place of business
19shown on the retailer's certificate of registration or
20sub-registration issued to the retailer pursuant to Section 2a
21of the Retailers' Occupation Tax Act. The original packages of
22cigarettes sold to the retailer shall bear all the required
23stamps, or other indicia, for the taxes included in the price
24of cigarettes.
25    (k) The amount of the Cigarette Tax imposed by this Act
26shall be separately stated, apart from the price of the goods,

 

 

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1by distributors, manufacturer representatives, secondary
2distributors, and retailers, in all bills and sales invoices.
3    (l) The distributor shall be required to collect the tax
4provided under paragraph (a) hereof, and, to cover the costs
5of such collection, shall be allowed a discount during any
6year commencing July 1st and ending the following June 30th in
7accordance with the schedule set out hereinbelow, which
8discount shall be allowed at the time of purchase of the stamps
9when purchase is required by this Act, or at the time when the
10tax is remitted to the Department without the purchase of
11stamps from the Department when that method of paying the tax
12is required or authorized by this Act.
13    On and after December 1, 1985, a discount equal to 1.75% of
14the amount of the tax payable under this Act up to and
15including the first $3,000,000 paid hereunder by such
16distributor to the Department during any such year and 1.5% of
17the amount of any additional tax paid hereunder by such
18distributor to the Department during any such year shall
19apply.
20    Two or more distributors that use a common means of
21affixing revenue tax stamps or that are owned or controlled by
22the same interests shall be treated as a single distributor
23for the purpose of computing the discount.
24    (m) The taxes herein imposed are in addition to all other
25occupation or privilege taxes imposed by the State of
26Illinois, or by any political subdivision thereof, or by any

 

 

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1municipal corporation.
2(Source: P.A. 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19;
3101-604, eff. 12-13-19.)
 
4    Section 99. Effective date. This Act takes effect upon
5becoming law.