Rep. William B. Black

Filed: 7/14/2009

 

 


 

 


 
09600SB0044ham001 LRB096 03720 HLH 28232 a

1
AMENDMENT TO SENATE BILL 44

2     AMENDMENT NO. ______. Amend Senate Bill 44 by replacing
3 everything from line 8 on page 2 through line 11 on page 22
4 with the following:
 
5     "Section 10. The Cigarette Tax Act is amended by changing
6 Sections 1 and 2 as follows:
 
7     (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
8     (Text of Section before amendment by P.A. 95-1053)
9     Sec. 1. For the purposes of this Act:
10     "Cigarette", when used in this Act, shall be construed to
11 mean: Any roll for smoking made wholly or in part of tobacco
12 irrespective of size or shape and whether or not such tobacco
13 is flavored, adulterated or mixed with any other ingredient,
14 and the wrapper or cover of which is made of paper or any other
15 substance or material except tobacco.
16     "Cigarette" when used in this Act, shall also be construed

 

 

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1 to mean: any roll for smoking made wholly or in part of tobacco
2 labeled as anything other than a cigarette or not bearing a
3 label, if it meets 2 or more of the following criteria:
4     (a) the product is sold in packs similar to cigarettes;
5     (b) the product is available for sale in cartons of 10
6 packs;
7     (c) the product is sold in soft packs, hard packs, flip-top
8 boxes, clam shells, or other cigarette-type boxes;
9     (d) the product is of a length and diameter found in
10 commercially-manufactured cigarettes;
11     (e) the product has a cellulose acetate or other integrated
12 filter;
13     (f) the product weighs less than 3 pounds per thousand
14 sticks;
15     (g) the product is marketed or advertised to consumers as a
16 cigarette or cigarette substitute; or
17     (h) there is other evidence that the product fits within
18 the definition of cigarette.
19     "Person" means any natural individual, firm, partnership,
20 association, joint stock company, joint adventure, public or
21 private corporation, however formed, limited liability
22 company, or a receiver, executor, administrator, trustee,
23 guardian or other representative appointed by order of any
24 court.
25     "Prior Continuous Compliance Taxpayer" means any person
26 who is licensed under this Act and who, having been a licensee

 

 

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1 for a continuous period of 5 years, is determined by the
2 Department not to have been either delinquent or deficient in
3 the payment of tax liability during that period or otherwise in
4 violation of this Act. Also, any taxpayer who has, as verified
5 by the Department, continuously complied with the condition of
6 his bond or other security under provisions of this Act for a
7 period of 5 consecutive years shall be considered to be a
8 "Prior continuous compliance taxpayer". In calculating the
9 consecutive period of time described herein for qualification
10 as a "prior continuous compliance taxpayer", a consecutive
11 period of time of qualifying compliance immediately prior to
12 the effective date of this amendatory Act of 1987 shall be
13 credited to any licensee who became licensed on or before the
14 effective date of this amendatory Act of 1987.
15     "Department" means the Department of Revenue.
16     "Sale" means any transfer, exchange or barter in any manner
17 or by any means whatsoever for a consideration, and includes
18 and means all sales made by any person.
19     "Original Package" means the individual packet, box or
20 other container whatsoever used to contain and to convey
21 cigarettes to the consumer.
22     "Distributor" means any and each of the following:
23         (1) Any person engaged in the business of selling
24     cigarettes in this State who brings or causes to be brought
25     into this State from without this State any original
26     packages of cigarettes, on which original packages there is

 

 

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1     no authorized evidence underneath a sealed transparent
2     wrapper showing that the tax liability imposed by this Act
3     has been paid or assumed by the out-of-State seller of such
4     cigarettes, for sale or other disposition in the course of
5     such business.
6         (2) Any person who makes, manufactures or fabricates
7     cigarettes in this State for sale in this State, except a
8     person who makes, manufactures or fabricates cigarettes as
9     a part of a correctional industries program for sale to
10     residents incarcerated in penal institutions or resident
11     patients of a State-operated mental health facility.
12         (3) Any person who makes, manufactures or fabricates
13     cigarettes outside this State, which cigarettes are placed
14     in original packages contained in sealed transparent
15     wrappers, for delivery or shipment into this State, and who
16     elects to qualify and is accepted by the Department as a
17     distributor under Section 4b of this Act.
18     "Place of business" shall mean and include any place where
19 cigarettes are sold or where cigarettes are manufactured,
20 stored or kept for the purpose of sale or consumption,
21 including any vessel, vehicle, airplane, train or vending
22 machine.
23     "Business" means any trade, occupation, activity or
24 enterprise engaged in for the purpose of selling cigarettes in
25 this State.
26     "Retailer" means any person who engages in the making of

 

 

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1 transfers of the ownership of, or title to, cigarettes to a
2 purchaser for use or consumption and not for resale in any
3 form, for a valuable consideration. "Retailer" does not include
4 a person:
5         (1) who transfers to residents incarcerated in penal
6     institutions or resident patients of a State-operated
7     mental health facility ownership of cigarettes made,
8     manufactured, or fabricated as part of a correctional
9     industries program; or
10         (2) who transfers cigarettes to a not-for-profit
11     research institution that conducts tests concerning the
12     health effects of tobacco products and who does not offer
13     the cigarettes for resale.
14     "Retailer" shall be construed to include any person who
15 engages in the making of transfers of the ownership of, or
16 title to, cigarettes to a purchaser, for use or consumption by
17 any other person to whom such purchaser may transfer the
18 cigarettes without a valuable consideration, except a person
19 who transfers to residents incarcerated in penal institutions
20 or resident patients of a State-operated mental health facility
21 ownership of cigarettes made, manufactured or fabricated as
22 part of a correctional industries program.
23 (Source: P.A. 95-462, eff. 8-27-07.)
 
24     (Text of Section after amendment by P.A. 95-1053)
25     Sec. 1. For the purposes of this Act:

 

 

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1     "Brand Style" means a variety of cigarettes distinguished
2 by the tobacco used, tar and nicotine content, flavoring used,
3 size of the cigarette, filtration on the cigarette or
4 packaging.
5     "Cigarette", means any roll for smoking made wholly or in
6 part of tobacco irrespective of size or shape and whether or
7 not such tobacco is flavored, adulterated or mixed with any
8 other ingredient, and the wrapper or cover of which is made of
9 paper or any other substance or material except tobacco.
10     "Cigarette" when used in this Act, shall also be construed
11 to mean: any roll for smoking made wholly or in part of tobacco
12 labeled as anything other than a cigarette or not bearing a
13 label, if it meets 2 or more of the following criteria:
14     (a) the product is sold in packs similar to cigarettes;
15     (b) the product is available for sale in cartons of 10
16 packs;
17     (c) the product is sold in soft packs, hard packs, flip-top
18 boxes, clam shells, or other cigarette-type boxes;
19     (d) the product is of a length and diameter found in
20 commercially-manufactured cigarettes;
21     (e) the product has a cellulose acetate or other integrated
22 filter;
23     (f) the product weighs less than 3 pounds per thousand
24 sticks;
25     (g) the product is marketed or advertised to consumers as a
26 cigarette or cigarette substitute; or

 

 

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1     (h) there is other evidence that the product fits within
2 the definition of cigarette.
3     "Contraband cigarettes" means:
4         (a) cigarettes that do not bear a required tax stamp
5     under this Act;
6         (b) cigarettes for which any required federal taxes
7     have not been paid;
8         (c) cigarettes that bear a counterfeit tax stamp;
9         (d) cigarettes that are manufactured, fabricated,
10     assembled, processed, packaged, or labeled by any person
11     other than (i) the owner of the trademark rights in the
12     cigarette brand or (ii) a person that is directly or
13     indirectly authorized by such owner;
14         (e) cigarettes imported into the United States, or
15     otherwise distributed, in violation of the federal
16     Imported Cigarette Compliance Act of 2000 (Title IV of
17     Public Law 106-476); or
18         (f) cigarettes that have false manufacturing labels.
19     "Person" means any natural individual, firm, partnership,
20 association, joint stock company, joint adventure, public or
21 private corporation, however formed, limited liability
22 company, or a receiver, executor, administrator, trustee,
23 guardian or other representative appointed by order of any
24 court.
25     "Prior Continuous Compliance Taxpayer" means any person
26 who is licensed under this Act and who, having been a licensee

 

 

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1 for a continuous period of 5 years, is determined by the
2 Department not to have been either delinquent or deficient in
3 the payment of tax liability during that period or otherwise in
4 violation of this Act. Also, any taxpayer who has, as verified
5 by the Department, continuously complied with the condition of
6 his bond or other security under provisions of this Act for a
7 period of 5 consecutive years shall be considered to be a
8 "Prior continuous compliance taxpayer". In calculating the
9 consecutive period of time described herein for qualification
10 as a "prior continuous compliance taxpayer", a consecutive
11 period of time of qualifying compliance immediately prior to
12 the effective date of this amendatory Act of 1987 shall be
13 credited to any licensee who became licensed on or before the
14 effective date of this amendatory Act of 1987.
15     "Department" means the Department of Revenue.
16     "Sale" means any transfer, exchange or barter in any manner
17 or by any means whatsoever for a consideration, and includes
18 and means all sales made by any person.
19     "Original Package" means the individual packet, box or
20 other container whatsoever used to contain and to convey
21 cigarettes to the consumer.
22     "Distributor" means any and each of the following:
23     (1) Any person engaged in the business of selling
24 cigarettes in this State who brings or causes to be brought
25 into this State from without this State any original packages
26 of cigarettes, on which original packages there is no

 

 

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1 authorized evidence underneath a sealed transparent wrapper
2 showing that the tax liability imposed by this Act has been
3 paid or assumed by the out-of-State seller of such cigarettes,
4 for sale or other disposition in the course of such business.
5     (2) Any person who makes, manufactures or fabricates
6 cigarettes in this State for sale in this State, except a
7 person who makes, manufactures or fabricates cigarettes as a
8 part of a correctional industries program for sale to residents
9 incarcerated in penal institutions or resident patients of a
10 State-operated mental health facility.
11     (3) Any person who makes, manufactures or fabricates
12 cigarettes outside this State, which cigarettes are placed in
13 original packages contained in sealed transparent wrappers,
14 for delivery or shipment into this State, and who elects to
15 qualify and is accepted by the Department as a distributor
16 under Section 4b of this Act.
17     "Place of business" shall mean and include any place where
18 cigarettes are sold or where cigarettes are manufactured,
19 stored or kept for the purpose of sale or consumption,
20 including any vessel, vehicle, airplane, train or vending
21 machine.
22     "Business" means any trade, occupation, activity or
23 enterprise engaged in for the purpose of selling cigarettes in
24 this State.
25     "Retailer" means any person who engages in the making of
26 transfers of the ownership of, or title to, cigarettes to a

 

 

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1 purchaser for use or consumption and not for resale in any
2 form, for a valuable consideration. "Retailer" does not include
3 a person:
4         (1) who transfers to residents incarcerated in penal
5     institutions or resident patients of a State-operated
6     mental health facility ownership of cigarettes made,
7     manufactured, or fabricated as part of a correctional
8     industries program; or
9         (2) who transfers cigarettes to a not-for-profit
10     research institution that conducts tests concerning the
11     health effects of tobacco products and who does not offer
12     the cigarettes for resale.
13     "Retailer" shall be construed to include any person who
14 engages in the making of transfers of the ownership of, or
15 title to, cigarettes to a purchaser, for use or consumption by
16 any other person to whom such purchaser may transfer the
17 cigarettes without a valuable consideration, except a person
18 who transfers to residents incarcerated in penal institutions
19 or resident patients of a State-operated mental health facility
20 ownership of cigarettes made, manufactured or fabricated as
21 part of a correctional industries program.
22     "Stamp" or "stamps" mean the indicia required to be affixed
23 on a pack of cigarettes that evidence payment of the tax on
24 cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
25 indicia used to indicate that the cigarettes are intended for a
26 sale or distribution within this State that is exempt from

 

 

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1 State tax under any applicable provision of law.
2     "Within this State" means within the exterior limits of the
3 State of Illinois and includes all territory within these
4 limits owned by or ceded to the United States of America.
5     "Related party" means any person that is associated with
6 any other person because he or she:
7         (a) is an officer or director of a business;
8         (b) is legally recognized as a partner in business; or
9         (c) is directly or indirectly controlled by another.
10 (Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
11     (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
12     Sec. 2. Tax imposed; rate; collection, payment, and
13 distribution; discount.
14     (a) A tax is imposed upon any person engaged in business as
15 a retailer of cigarettes in this State at the rate of 5 1/2
16 mills per cigarette sold, or otherwise disposed of in the
17 course of such business in this State. In addition to any other
18 tax imposed by this Act, a tax is imposed upon any person
19 engaged in business as a retailer of cigarettes in this State
20 at a rate of 1/2 mill per cigarette sold or otherwise disposed
21 of in the course of such business in this State on and after
22 January 1, 1947, and shall be paid into the Metropolitan Fair
23 and Exposition Authority Reconstruction Fund or as otherwise
24 provided in Section 29. On and after December 1, 1985, in
25 addition to any other tax imposed by this Act, a tax is imposed

 

 

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1 upon any person engaged in business as a retailer of cigarettes
2 in this State at a rate of 4 mills per cigarette sold or
3 otherwise disposed of in the course of such business in this
4 State. Of the additional tax imposed by this amendatory Act of
5 1985, $9,000,000 of the moneys received by the Department of
6 Revenue pursuant to this Act shall be paid each month into the
7 Common School Fund. On and after the effective date of this
8 amendatory Act of 1989, in addition to any other tax imposed by
9 this Act, a tax is imposed upon any person engaged in business
10 as a retailer of cigarettes at the rate of 5 mills per
11 cigarette sold or otherwise disposed of in the course of such
12 business in this State. On and after the effective date of this
13 amendatory Act of 1993, in addition to any other tax imposed by
14 this Act, a tax is imposed upon any person engaged in business
15 as a retailer of cigarettes at the rate of 7 mills per
16 cigarette sold or otherwise disposed of in the course of such
17 business in this State. On and after December 15, 1997, in
18 addition to any other tax imposed by this Act, a tax is imposed
19 upon any person engaged in business as a retailer of cigarettes
20 at the rate of 7 mills per cigarette sold or otherwise disposed
21 of in the course of such business of this State. All of the
22 moneys received by the Department of Revenue pursuant to this
23 Act and the Cigarette Use Tax Act from the additional taxes
24 imposed by this amendatory Act of 1997, shall be paid each
25 month into the Common School Fund. On and after July 1, 2002,
26 in addition to any other tax imposed by this Act, a tax is

 

 

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1 imposed upon any person engaged in business as a retailer of
2 cigarettes at the rate of 20.0 mills per cigarette sold or
3 otherwise disposed of in the course of such business in this
4 State. Beginning on September 1, 2009, in addition to any other
5 tax imposed by this Act, a tax is imposed upon any person
6 engaged in business as a retailer of cigarettes at the rate of
7 25 mills per cigarette sold or otherwise disposed of in the
8 course of such business in this State. Beginning on September
9 1, 2010, in addition to any other tax imposed by this Act, a
10 tax is imposed upon any person engaged in business as a
11 retailer of cigarettes at the rate of 12.5 mills per cigarette
12 sold or otherwise disposed of in the course of such business in
13 this State. Beginning on September 1, 2011, in addition to any
14 other tax imposed by this Act, a tax is imposed upon any person
15 engaged in business as a retailer of cigarettes at the rate of
16 12.5 mills per cigarette sold or otherwise disposed of in the
17 course of such business in this State. Of the moneys received
18 by the Department of Revenue under this Act and the Cigarette
19 Use Tax Act from the additional taxes imposed by this
20 amendatory Act of the 96th General Assembly: (i) $54,167 must
21 be paid each month into the Tax Compliance and Administration
22 Fund for the purpose of cigarette and tobacco related
23 enforcement, retail inspections, and prevention of internet
24 and interstate trafficking of contraband cigarettes, and (ii)
25 the balance must be paid each month into the Healthcare
26 Provider Relief Fund. The payment of such taxes shall be

 

 

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1 evidenced by a stamp affixed to each original package of
2 cigarettes, or an authorized substitute for such stamp
3 imprinted on each original package of such cigarettes
4 underneath the sealed transparent outside wrapper of such
5 original package, as hereinafter provided. However, such taxes
6 are not imposed upon any activity in such business in
7 interstate commerce or otherwise, which activity may not under
8 the Constitution and statutes of the United States be made the
9 subject of taxation by this State.
10     Beginning on the effective date of this amendatory Act of
11 the 92nd General Assembly and through June 30, 2006, all of the
12 moneys received by the Department of Revenue pursuant to this
13 Act and the Cigarette Use Tax Act, other than the moneys that
14 are dedicated to the Common School Fund, shall be distributed
15 each month as follows: first, there shall be paid into the
16 General Revenue Fund an amount which, when added to the amount
17 paid into the Common School Fund for that month, equals
18 $33,300,000, except that in the month of August of 2004, this
19 amount shall equal $83,300,000; then, from the moneys
20 remaining, if any amounts required to be paid into the General
21 Revenue Fund in previous months remain unpaid, those amounts
22 shall be paid into the General Revenue Fund; then, beginning on
23 April 1, 2003, from the moneys remaining, $5,000,000 per month
24 shall be paid into the School Infrastructure Fund; then, if any
25 amounts required to be paid into the School Infrastructure Fund
26 in previous months remain unpaid, those amounts shall be paid

 

 

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1 into the School Infrastructure Fund; then the moneys remaining,
2 if any, shall be paid into the Long-Term Care Provider Fund. To
3 the extent that more than $25,000,000 has been paid into the
4 General Revenue Fund and Common School Fund per month for the
5 period of July 1, 1993 through the effective date of this
6 amendatory Act of 1994 from combined receipts of the Cigarette
7 Tax Act and the Cigarette Use Tax Act, notwithstanding the
8 distribution provided in this Section, the Department of
9 Revenue is hereby directed to adjust the distribution provided
10 in this Section to increase the next monthly payments to the
11 Long Term Care Provider Fund by the amount paid to the General
12 Revenue Fund and Common School Fund in excess of $25,000,000
13 per month and to decrease the next monthly payments to the
14 General Revenue Fund and Common School Fund by that same excess
15 amount.
16     Beginning on July 1, 2006, all of the moneys received by
17 the Department of Revenue pursuant to this Act and the
18 Cigarette Use Tax Act, other than the moneys that are dedicated
19 to the Common School Fund and, beginning on the effective date
20 of this amendatory Act of the 96th General Assembly, other than
21 the moneys from the additional taxes imposed by this amendatory
22 Act of the 96th General Assembly that must be paid each month
23 into the Tax Compliance and Administration Fund and the
24 Healthcare Provider Relief Fund, shall be distributed each
25 month as follows: first, there shall be paid into the General
26 Revenue Fund an amount that, when added to the amount paid into

 

 

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1 the Common School Fund for that month, equals $29,200,000;
2 then, from the moneys remaining, if any amounts required to be
3 paid into the General Revenue Fund in previous months remain
4 unpaid, those amounts shall be paid into the General Revenue
5 Fund; then from the moneys remaining, $5,000,000 per month
6 shall be paid into the School Infrastructure Fund; then, if any
7 amounts required to be paid into the School Infrastructure Fund
8 in previous months remain unpaid, those amounts shall be paid
9 into the School Infrastructure Fund; then the moneys remaining,
10 if any, shall be paid into the Long-Term Care Provider Fund.
11     When any tax imposed herein terminates or has terminated,
12 distributors who have bought stamps while such tax was in
13 effect and who therefore paid such tax, but who can show, to
14 the Department's satisfaction, that they sold the cigarettes to
15 which they affixed such stamps after such tax had terminated
16 and did not recover the tax or its equivalent from purchasers,
17 shall be allowed by the Department to take credit for such
18 absorbed tax against subsequent tax stamp purchases from the
19 Department by such distributor.
20     The impact of the tax levied by this Act is imposed upon
21 the retailer and shall be prepaid or pre-collected by the
22 distributor for the purpose of convenience and facility only,
23 and the amount of the tax shall be added to the price of the
24 cigarettes sold by such distributor. Collection of the tax
25 shall be evidenced by a stamp or stamps affixed to each
26 original package of cigarettes, as hereinafter provided.

 

 

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1     Each distributor shall collect the tax from the retailer at
2 or before the time of the sale, shall affix the stamps as
3 hereinafter required, and shall remit the tax collected from
4 retailers to the Department, as hereinafter provided. Any
5 distributor who fails to properly collect and pay the tax
6 imposed by this Act shall be liable for the tax. Any
7 distributor having cigarettes to which stamps have been affixed
8 in his possession for sale on the effective date of this
9 amendatory Act of 1989 shall not be required to pay the
10 additional tax imposed by this amendatory Act of 1989 on such
11 stamped cigarettes. Any distributor having cigarettes to which
12 stamps have been affixed in his or her possession for sale at
13 12:01 a.m. on the effective date of this amendatory Act of
14 1993, is required to pay the additional tax imposed by this
15 amendatory Act of 1993 on such stamped cigarettes. This
16 payment, less the discount provided in subsection (b), shall be
17 due when the distributor first makes a purchase of cigarette
18 tax stamps after the effective date of this amendatory Act of
19 1993, or on the first due date of a return under this Act after
20 the effective date of this amendatory Act of 1993, whichever
21 occurs first. Any distributor having cigarettes to which stamps
22 have been affixed in his possession for sale on December 15,
23 1997 shall not be required to pay the additional tax imposed by
24 this amendatory Act of 1997 on such stamped cigarettes.
25     Any distributor having cigarettes to which stamps have been
26 affixed in his or her possession for sale on July 1, 2002 shall

 

 

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1 not be required to pay the additional tax imposed by this
2 amendatory Act of the 92nd General Assembly on those stamped
3 cigarettes. Any retailer having cigarettes in his or her
4 possession on September 1, 2009 to which tax stamps have been
5 affixed is not required to pay the additional tax that begins
6 of September 1, 2009 imposed by an amendatory Act of the 96th
7 General Assembly on those stamped cigarettes. Any distributor
8 having cigarettes in his or her possession on September 1, 2009
9 to which tax stamps have been affixed is required to pay the
10 additional tax that begins on September 1, 2009 imposed by an
11 amendatory Act of the 96th General Assembly to the extent the
12 calendar year 2009 average monthly volume of cigarette stamps
13 in the distributor's possession exceeds the average monthly
14 volume of cigarette stamps purchased by the distributor in
15 calendar year 2008. This payment, less the discount provided in
16 subsection (b), is due when the distributor first makes a
17 purchase of cigarette stamps on or after September 1, 2009 or
18 on the first due date of a return under this Act occurring on
19 or after September 1, 2009, whichever occurs first.
20     Any retailer having cigarettes in his or her possession on
21 September 1, 2010 to which tax stamps have been affixed is not
22 required to pay the additional tax that begins on September 1,
23 2010 imposed by an amendatory Act of the 96th General Assembly
24 on those stamped cigarettes. Any distributor having cigarettes
25 in his or her possession on September 1, 2010 to which tax
26 stamps have been affixed is required to pay the additional tax

 

 

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1 that begins on September 1, 2010 imposed by an amendatory Act
2 of the 96th General Assembly to the extent the calendar year
3 2010 average monthly volume of cigarette stamps in the
4 distributor's possession exceeds the average monthly volume of
5 cigarette stamps purchased by the distributor in calendar year
6 2009. This payment, less the discount provided in subsection
7 (b), is due when the distributor first makes a purchase of
8 cigarette stamps on or after September 1, 2010 or on the first
9 due date of a return under this Act occurring on or after
10 September 1, 2010, whichever occurs first.
11     Any retailer having cigarettes in his or her possession on
12 September 1, 2011 to which tax stamps have been affixed is not
13 required to pay the additional tax that begins of September 1,
14 2011 imposed by an amendatory Act of the 96th General Assembly
15 on those stamped cigarettes. Any distributor having cigarettes
16 in his or her possession on September 1, 2011 to which tax
17 stamps have been affixed is required to pay the additional tax
18 that begins on September 1, 2011 imposed by an amendatory Act
19 of the 96th General Assembly to the extent the calendar year
20 2011 average monthly volume of cigarette stamps in the
21 distributor's possession exceeds the average monthly volume of
22 cigarette stamps purchased by the distributor in calendar year
23 2010. This payment, less the discount provided in subsection
24 (b), is due when the distributor first makes a purchase of
25 cigarette stamps on or after September 1, 2011 or on the first
26 due date of a return under this Act occurring on or after

 

 

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1 September 1, 2011, whichever occurs first.
2     The amount of the Cigarette Tax imposed by this Act shall
3 be separately stated, apart from the price of the goods, by
4 both distributors and retailers, in all advertisements, bills
5 and sales invoices.
6     (b) The distributor shall be required to collect the taxes
7 provided under paragraph (a) hereof, and, to cover the costs of
8 such collection, shall be allowed a discount during any year
9 commencing July 1st and ending the following June 30th in
10 accordance with the schedule set out hereinbelow, which
11 discount shall be allowed at the time of purchase of the stamps
12 when purchase is required by this Act, or at the time when the
13 tax is remitted to the Department without the purchase of
14 stamps from the Department when that method of paying the tax
15 is required or authorized by this Act. Prior to December 1,
16 1985, a discount equal to 1 2/3% of the amount of the tax up to
17 and including the first $700,000 paid hereunder by such
18 distributor to the Department during any such year; 1 1/3% of
19 the next $700,000 of tax or any part thereof, paid hereunder by
20 such distributor to the Department during any such year; 1% of
21 the next $700,000 of tax, or any part thereof, paid hereunder
22 by such distributor to the Department during any such year, and
23 2/3 of 1% of the amount of any additional tax paid hereunder by
24 such distributor to the Department during any such year shall
25 apply. On and after December 1, 1985, a discount equal to 1.75%
26 of the amount of the tax payable under this Act up to and

 

 

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1 including the first $3,000,000 paid hereunder by such
2 distributor to the Department during any such year and 1.5% of
3 the amount of any additional tax paid hereunder by such
4 distributor to the Department during any such year shall apply.
5     Two or more distributors that use a common means of
6 affixing revenue tax stamps or that are owned or controlled by
7 the same interests shall be treated as a single distributor for
8 the purpose of computing the discount.
9     (c) The taxes herein imposed are in addition to all other
10 occupation or privilege taxes imposed by the State of Illinois,
11 or by any political subdivision thereof, or by any municipal
12 corporation.
13 (Source: P.A. 93-839, eff. 7-30-04; 94-91, eff. 7-1-05; 94-839,
14 eff. 6-6-06.)
 
15     Section 15. The Cigarette Use Tax Act is amended by
16 changing Sections 1, 2, and 12 as follows:
 
17     (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
18     (Text of Section before amendment by P.A. 95-1053)
19     Sec. 1. For the purpose of this Act, unless otherwise
20 required by the context:
21     "Use" means the exercise by any person of any right or
22 power over cigarettes incident to the ownership or possession
23 thereof, other than the making of a sale thereof in the course
24 of engaging in a business of selling cigarettes and shall

 

 

09600SB0044ham001 - 22 - LRB096 03720 HLH 28232 a

1 include the keeping or retention of cigarettes for use. For the
2 purpose of this Act, "use" does not include the use of
3 cigarettes by a not-for-profit research institution for the
4 purpose of conducting tests concerning the health effects of
5 tobacco products, provided the cigarettes are not offered for
6 resale.
7     "Cigarette" means any roll for smoking made wholly or in
8 part of tobacco irrespective of size or shape and whether or
9 not such tobacco is flavored, adulterated or mixed with any
10 other ingredient, and the wrapper or cover of which is made of
11 paper or any other substance or material except tobacco.
12     "Cigarette" when used in this Act, shall also be construed
13 to mean: any roll for smoking made wholly or in part of tobacco
14 labeled as anything other than a cigarette or not bearing a
15 label, if it meets 2 or more of the following criteria:
16     (a) the product is sold in packs similar to cigarettes;
17     (b) the product is available for sale in cartons of 10
18 packs;
19     (c) the product is sold in soft packs, hard packs, flip-top
20 boxes, clam shells, or other cigarette-type boxes;
21     (d) the product is of a length and diameter found in
22 commercially-manufactured cigarettes;
23     (e) the product has a cellulose acetate or other integrated
24 filter;
25     (f) the product weighs less than 3 pounds per thousand
26 sticks;

 

 

09600SB0044ham001 - 23 - LRB096 03720 HLH 28232 a

1     (g) the product is marketed or advertised to consumers as a
2 cigarette or cigarette substitute; or
3     (h) there is other evidence that the product fits within
4 the definition of cigarette.
5     "Person" means any natural individual, firm, partnership,
6 association, joint stock company, joint adventure, public or
7 private corporation, however formed, limited liability
8 company, or a receiver, executor, administrator, trustee,
9 guardian or other representative appointed by order of any
10 court.
11     "Department" means the Department of Revenue.
12     "Sale" means any transfer, exchange or barter in any manner
13 or by any means whatsoever for a consideration, and includes
14 and means all sales made by any person.
15     "Original Package" means the individual packet, box or
16 other container whatsoever used to contain and to convey
17 cigarettes to the consumer.
18     "Distributor" means any and each of the following:
19         a. Any person engaged in the business of selling
20     cigarettes in this State who brings or causes to be brought
21     into this State from without this State any original
22     packages of cigarettes, on which original packages there is
23     no authorized evidence underneath a sealed transparent
24     wrapper showing that the tax liability imposed by this Act
25     has been paid or assumed by the out-of-State seller of such
26     cigarettes, for sale in the course of such business.

 

 

09600SB0044ham001 - 24 - LRB096 03720 HLH 28232 a

1         b. Any person who makes, manufactures or fabricates
2     cigarettes in this State for sale, except a person who
3     makes, manufactures or fabricates cigarettes for sale to
4     residents incarcerated in penal institutions or resident
5     patients or a State-operated mental health facility.
6         c. Any person who makes, manufactures or fabricates
7     cigarettes outside this State, which cigarettes are placed
8     in original packages contained in sealed transparent
9     wrappers, for delivery or shipment into this State, and who
10     elects to qualify and is accepted by the Department as a
11     distributor under Section 7 of this Act.
12     "Distributor" does not include any person who transfers
13 cigarettes to a not-for-profit research institution that
14 conducts tests concerning the health effects of tobacco
15 products and who does not offer the cigarettes for resale.
16     "Distributor maintaining a place of business in this
17 State", or any like term, means any distributor having or
18 maintaining within this State, directly or by a subsidiary, an
19 office, distribution house, sales house, warehouse or other
20 place of business, or any agent operating within this State
21 under the authority of the distributor or its subsidiary,
22 irrespective of whether such place of business or agent is
23 located here permanently or temporarily, or whether such
24 distributor or subsidiary is licensed to transact business
25 within this State.
26     "Business" means any trade, occupation, activity or

 

 

09600SB0044ham001 - 25 - LRB096 03720 HLH 28232 a

1 enterprise engaged in or conducted in this State for the
2 purpose of selling cigarettes.
3     "Prior Continuous Compliance Taxpayer" means any person
4 who is licensed under this Act and who, having been a licensee
5 for a continuous period of 5 years, is determined by the
6 Department not to have been either delinquent or deficient in
7 the payment of tax liability during that period or otherwise in
8 violation of this Act. Also, any taxpayer who has, as verified
9 by the Department, continuously complied with the condition of
10 his bond or other security under provisions of this Act of a
11 period of 5 consecutive years shall be considered to be a
12 "prior continuous compliance taxpayer". In calculating the
13 consecutive period of time described herein for qualification
14 as a "prior continuous compliance taxpayer", a consecutive
15 period of time of qualifying compliance immediately prior to
16 the effective date of this amendatory Act of 1987 shall be
17 credited to any licensee who became licensed on or before the
18 effective date of this amendatory Act of 1987.
19 (Source: P.A. 95-462, eff. 8-27-07.)
 
20     (Text of Section after amendment by P.A. 95-1053)
21     Sec. 1. For the purpose of this Act, unless otherwise
22 required by the context:
23     "Use" means the exercise by any person of any right or
24 power over cigarettes incident to the ownership or possession
25 thereof, other than the making of a sale thereof in the course

 

 

09600SB0044ham001 - 26 - LRB096 03720 HLH 28232 a

1 of engaging in a business of selling cigarettes and shall
2 include the keeping or retention of cigarettes for use. For the
3 purpose of this Act, "use" does not include the use of
4 cigarettes by a not-for-profit research institution for the
5 purpose of conducting tests concerning the health effects of
6 tobacco products, provided the cigarettes are not offered for
7 resale.
8     "Brand Style" means a variety of cigarettes distinguished
9 by the tobacco used, tar and nicotine content, flavoring used,
10 size of the cigarette, filtration on the cigarette or
11 packaging.
12     "Cigarette" means any roll for smoking made wholly or in
13 part of tobacco irrespective of size or shape and whether or
14 not such tobacco is flavored, adulterated or mixed with any
15 other ingredient, and the wrapper or cover of which is made of
16 paper or any other substance or material except tobacco.
17     "Cigarette" when used in this Act, shall also be construed
18 to mean: any roll for smoking made wholly or in part of tobacco
19 labeled as anything other than a cigarette or not bearing a
20 label, if it meets 2 or more of the following criteria:
21     (a) the product is sold in packs similar to cigarettes;
22     (b) the product is available for sale in cartons of 10
23 packs;
24     (c) the product is sold in soft packs, hard packs, flip-top
25 boxes, clam shells, or other cigarette-type boxes;
26     (d) the product is of a length and diameter found in

 

 

09600SB0044ham001 - 27 - LRB096 03720 HLH 28232 a

1 commercially-manufactured cigarettes;
2     (e) the product has a cellulose acetate or other integrated
3 filter;
4     (f) the product weighs less than 3 pounds per thousand
5 sticks;
6     (g) the product is marketed or advertised to consumers as a
7 cigarette or cigarette substitute; or
8     (h) there is other evidence that the product fits within
9 the definition of cigarette.
10     "Contraband cigarettes" means:
11         (a) cigarettes that do not bear a required tax stamp
12     under this Act;
13         (b) cigarettes for which any required federal taxes
14     have not been paid;
15         (c) cigarettes that bear a counterfeit tax stamp;
16         (d) cigarettes that are manufactured, fabricated,
17     assembled, processed, packaged, or labeled by any person
18     other than (i) the owner of the trademark rights in the
19     cigarette brand or (ii) a person that is directly or
20     indirectly authorized by such owner;
21         (e) cigarettes imported into the United States, or
22     otherwise distributed, in violation of the federal
23     Imported Cigarette Compliance Act of 2000 (Title IV of
24     Public Law 106-476); or
25         (f) cigarettes that have false manufacturing labels.
26     "Person" means any natural individual, firm, partnership,

 

 

09600SB0044ham001 - 28 - LRB096 03720 HLH 28232 a

1 association, joint stock company, joint adventure, public or
2 private corporation, however formed, limited liability
3 company, or a receiver, executor, administrator, trustee,
4 guardian or other representative appointed by order of any
5 court.
6     "Department" means the Department of Revenue.
7     "Sale" means any transfer, exchange or barter in any manner
8 or by any means whatsoever for a consideration, and includes
9 and means all sales made by any person.
10     "Original Package" means the individual packet, box or
11 other container whatsoever used to contain and to convey
12 cigarettes to the consumer.
13     "Distributor" means any and each of the following:
14         a. Any person engaged in the business of selling
15     cigarettes in this State who brings or causes to be brought
16     into this State from without this State any original
17     packages of cigarettes, on which original packages there is
18     no authorized evidence underneath a sealed transparent
19     wrapper showing that the tax liability imposed by this Act
20     has been paid or assumed by the out-of-State seller of such
21     cigarettes, for sale in the course of such business.
22         b. Any person who makes, manufactures or fabricates
23     cigarettes in this State for sale, except a person who
24     makes, manufactures or fabricates cigarettes for sale to
25     residents incarcerated in penal institutions or resident
26     patients or a State-operated mental health facility.

 

 

09600SB0044ham001 - 29 - LRB096 03720 HLH 28232 a

1         c. Any person who makes, manufactures or fabricates
2     cigarettes outside this State, which cigarettes are placed
3     in original packages contained in sealed transparent
4     wrappers, for delivery or shipment into this State, and who
5     elects to qualify and is accepted by the Department as a
6     distributor under Section 7 of this Act.
7     "Distributor" does not include any person who transfers
8 cigarettes to a not-for-profit research institution that
9 conducts tests concerning the health effects of tobacco
10 products and who does not offer the cigarettes for resale.
11     "Distributor maintaining a place of business in this
12 State", or any like term, means any distributor having or
13 maintaining within this State, directly or by a subsidiary, an
14 office, distribution house, sales house, warehouse or other
15 place of business, or any agent operating within this State
16 under the authority of the distributor or its subsidiary,
17 irrespective of whether such place of business or agent is
18 located here permanently or temporarily, or whether such
19 distributor or subsidiary is licensed to transact business
20 within this State.
21     "Business" means any trade, occupation, activity or
22 enterprise engaged in or conducted in this State for the
23 purpose of selling cigarettes.
24     "Prior Continuous Compliance Taxpayer" means any person
25 who is licensed under this Act and who, having been a licensee
26 for a continuous period of 5 years, is determined by the

 

 

09600SB0044ham001 - 30 - LRB096 03720 HLH 28232 a

1 Department not to have been either delinquent or deficient in
2 the payment of tax liability during that period or otherwise in
3 violation of this Act. Also, any taxpayer who has, as verified
4 by the Department, continuously complied with the condition of
5 his bond or other security under provisions of this Act of a
6 period of 5 consecutive years shall be considered to be a
7 "prior continuous compliance taxpayer". In calculating the
8 consecutive period of time described herein for qualification
9 as a "prior continuous compliance taxpayer", a consecutive
10 period of time of qualifying compliance immediately prior to
11 the effective date of this amendatory Act of 1987 shall be
12 credited to any licensee who became licensed on or before the
13 effective date of this amendatory Act of 1987.
14     "Stamp" or "stamps" mean the indicia required to be affixed
15 on a pack of cigarettes that evidence payment of the tax on
16 cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
17 indicia used to indicate that the cigarettes are intended for a
18 sale or distribution within this State that is exempt from
19 State tax under any applicable provision of law.
20     "Within this State" means within the exterior limits of the
21 State of Illinois and includes all territory within these
22 limits owned by or ceded to the United States of America.
23     "Related party" means any person that is associated with
24 any other person because he or she:
25         (a) is an officer or director of a business;
26         (b) is legally recognized as a partner in business; or

 

 

09600SB0044ham001 - 31 - LRB096 03720 HLH 28232 a

1         (c) is directly or indirectly controlled by another.
2 (Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
3     (35 ILCS 135/2)  (from Ch. 120, par. 453.32)
4     Sec. 2. A tax is imposed upon the privilege of using
5 cigarettes in this State, at the rate of 6 mills per cigarette
6 so used. On and after December 1, 1985, in addition to any
7 other tax imposed by this Act, a tax is imposed upon the
8 privilege of using cigarettes in this State at a rate of 4
9 mills per cigarette so used. On and after the effective date of
10 this amendatory Act of 1989, in addition to any other tax
11 imposed by this Act, a tax is imposed upon the privilege of
12 using cigarettes in this State at the rate of 5 mills per
13 cigarette so used. On and after the effective date of this
14 amendatory Act of 1993, in addition to any other tax imposed by
15 this Act, a tax is imposed upon the privilege of using
16 cigarettes in this State at a rate of 7 mills per cigarette so
17 used. On and after December 15, 1997, in addition to any other
18 tax imposed by this Act, a tax is imposed upon the privilege of
19 using cigarettes in this State at a rate of 7 mills per
20 cigarette so used. On and after July 1, 2002, in addition to
21 any other tax imposed by this Act, a tax is imposed upon the
22 privilege of using cigarettes in this State at a rate of 20.0
23 mills per cigarette so used. Beginning on September 1, 2009, in
24 addition to any other tax imposed by this Act, a tax is imposed
25 upon the privilege of using cigarettes in this State at a rate

 

 

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1 of 25 mills per cigarette so used. Beginning on September 1,
2 2010, in addition to any other tax imposed by this Act, a tax
3 is imposed upon the privilege of using cigarettes in this State
4 at the rate of 12.5 mills per cigarette so used. Beginning on
5 September 1, 2011, in addition to any other tax imposed by this
6 Act, a tax is imposed upon the privilege of using cigarettes in
7 this State at the rate of 12.5 mills per cigarette so used. The
8 taxes herein imposed shall be in addition to all other
9 occupation or privilege taxes imposed by the State of Illinois
10 or by any political subdivision thereof or by any municipal
11 corporation.
12     When any tax imposed herein terminates or has terminated,
13 distributors who have bought stamps while such tax was in
14 effect and who therefore paid such tax, but who can show, to
15 the Department's satisfaction, that they sold the cigarettes to
16 which they affixed such stamps after such tax had terminated
17 and did not recover the tax or its equivalent from purchasers,
18 shall be allowed by the Department to take credit for such
19 absorbed tax against subsequent tax stamp purchases from the
20 Department by such distributors.
21     When the word "tax" is used in this Act, it shall include
22 any tax or tax rate imposed by this Act and shall mean the
23 singular of "tax" or the plural "taxes" as the context may
24 require.
25     Any distributor having cigarettes to which stamps have been
26 affixed in his possession for sale on the effective date of

 

 

09600SB0044ham001 - 33 - LRB096 03720 HLH 28232 a

1 this amendatory Act of 1989 shall not be required to pay the
2 additional tax imposed by this amendatory Act of 1989 on such
3 stamped cigarettes. Any distributor having cigarettes to which
4 stamps have been affixed in his or her possession for sale at
5 12:01 a.m. on the effective date of this amendatory Act of
6 1993, is required to pay the additional tax imposed by this
7 amendatory Act of 1993 on such stamped cigarettes. This payment
8 shall be due when the distributor first makes a purchase of
9 cigarette tax stamps after the effective date of this
10 amendatory Act of 1993, or on the first due date of a return
11 under this Act after the effective date of this amendatory Act
12 of 1993, whichever occurs first. Once a distributor tenders
13 payment of the additional tax to the Department, the
14 distributor may purchase stamps from the Department. Any
15 distributor having cigarettes to which stamps have been affixed
16 in his possession for sale on December 15, 1997 shall not be
17 required to pay the additional tax imposed by this amendatory
18 Act of 1997 on such stamped cigarettes.
19     Any distributor having cigarettes to which stamps have been
20 affixed in his or her possession for sale on July 1, 2002 shall
21 not be required to pay the additional tax imposed by this
22 amendatory Act of the 92nd General Assembly on those stamped
23 cigarettes. Any retailer having cigarettes in his or her
24 possession on September 1, 2009 to which tax stamps have been
25 affixed is not required to pay the additional tax that begins
26 of September 1, 2009 imposed by an amendatory Act of the 96th

 

 

09600SB0044ham001 - 34 - LRB096 03720 HLH 28232 a

1 General Assembly on those stamped cigarettes. Any distributor
2 having cigarettes in his or her possession on September 1, 2009
3 to which tax stamps have been affixed is required to pay the
4 additional tax that begins on September 1, 2009 imposed by an
5 amendatory Act of the 96th General Assembly to the extent the
6 calendar year 2009 average monthly volume of cigarette stamps
7 in the distributor's possession exceeds the average monthly
8 volume of cigarette stamps purchased by the distributor in
9 calendar year 2008. This payment, less the discount provided in
10 Section 3, is due when the distributor first makes a purchase
11 of cigarette stamps on or after September 1, 2009 or on the
12 first due date of a return under this Act occurring on or after
13 September 1, 2009, whichever occurs first.
14     Any retailer having cigarettes in his or her possession on
15 September 1, 2010 to which tax stamps have been affixed is not
16 required to pay the additional tax that begins on September 1,
17 2010 imposed by an amendatory Act of the 96th General Assembly
18 on those stamped cigarettes. Any distributor having cigarettes
19 in his or her possession on September 1, 2010 to which tax
20 stamps have been affixed is required to pay the additional tax
21 that begins on September 1, 2010 imposed by an amendatory Act
22 of the 96th General Assembly to the extent the calendar year
23 2010 average monthly volume of cigarette stamps in the
24 distributor's possession exceeds the average monthly volume of
25 cigarette stamps purchased by the distributor in calendar year
26 2009. This payment, less the discount provided in Section 3, is

 

 

09600SB0044ham001 - 35 - LRB096 03720 HLH 28232 a

1 due when the distributor first makes a purchase of cigarette
2 stamps on or after September 1, 2010 or on the first due date
3 of a return under this Act occurring on or after September 1,
4 2010, whichever occurs first.
5     Any retailer having cigarettes in his or her possession on
6 September 1, 2011 to which tax stamps have been affixed is not
7 required to pay the additional tax that begins of September 1,
8 2011 imposed by an amendatory Act of the 96th General Assembly
9 on those stamped cigarettes. Any distributor having cigarettes
10 in his or her possession on September 1, 2011 to which tax
11 stamps have been affixed is required to pay the additional tax
12 that begins on September 1, 2011 imposed by an amendatory Act
13 of the 96th General Assembly to the extent the calendar year
14 2011 average monthly volume of cigarette stamps in the
15 distributor's possession exceeds the average monthly volume of
16 cigarette stamps purchased by the distributor in calendar year
17 2010. This payment, less the discount provided in Section 3, is
18 due when the distributor first makes a purchase of cigarette
19 stamps on or after September 1, 2011 or on the first due date
20 of a return under this Act occurring on or after September 1,
21 2011, whichever occurs first.
22 (Source: P.A. 92-536, eff. 6-6-02.)
 
23     (35 ILCS 135/12)  (from Ch. 120, par. 453.42)
24     Sec. 12. Declaration of possession of cigarettes on which
25 tax not paid.

 

 

09600SB0044ham001 - 36 - LRB096 03720 HLH 28232 a

1     (a) When cigarettes are acquired for use in this State by a
2 person (including a distributor as well as any other person),
3 who did not pay the tax herein imposed to a distributor, the
4 person, within 30 days after acquiring the cigarettes, shall
5 file with the Department a return declaring the possession of
6 the cigarettes and shall transmit with the return to the
7 Department the tax imposed by this Act.
8     (b) On receipt of the return and payment of the tax as
9 required by paragraph (a), the Department may furnish the
10 person with a suitable tax stamp to be affixed to the package
11 of cigarettes upon which the tax has been paid if the
12 Department determines that the cigarettes still exist.
13     (c) The return referred to in paragraph (a) shall contain
14 the name and address of the person possessing the cigarettes
15 involved, the location of the cigarettes and the quantity,
16 brand name, place, and date of the acquisition of the
17 cigarettes.
18     (d) The provisions of this Section are not subject to the
19 Uniform Penalty and Interest Act.
20 (Source: P.A. 92-322, eff. 1-1-02.)
 
21     Section 95. No acceleration or delay. Where this Act makes
22 changes in a statute that is represented in this Act by text
23 that is not yet or no longer in effect (for example, a Section
24 represented by multiple versions), the use of that text does
25 not accelerate or delay the taking effect of (i) the changes

 

 

09600SB0044ham001 - 37 - LRB096 03720 HLH 28232 a

1 made by this Act or (ii) provisions derived from any other
2 Public Act.".