HB1731 EngrossedLRB097 10208 PJG 50404 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 1 as follows:
 
6    (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
7    Sec. 1. For the purposes of this Act:
8    "Brand Style" means a variety of cigarettes distinguished
9by the tobacco used, tar and nicotine content, flavoring used,
10size of the cigarette, filtration on the cigarette or
11packaging.
12    "Cigarette", means any roll for smoking made wholly or in
13part of tobacco irrespective of size or shape and whether or
14not such tobacco is flavored, adulterated or mixed with any
15other ingredient, and the wrapper or cover of which is made of
16paper or any other substance or material except tobacco.
17"Cigarette" also includes little cigars.
18    "Little cigar" means any roll for smoking, made wholly or
19in part of tobacco, if such product uses an integrated
20cellulose acetate or other similar filter and is wrapped in any
21substance containing tobacco, other than natural leaf tobacco.
22    "Contraband cigarettes" means:
23        (a) cigarettes that do not bear a required tax stamp

 

 

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

 

 

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

 

 

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

 

 

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1transfers of the ownership of, or title to, cigarettes to a
2purchaser for use or consumption and not for resale in any
3form, for a valuable consideration. "Retailer" does not include
4a 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
15engages in the making of transfers of the ownership of, or
16title to, cigarettes to a purchaser, for use or consumption by
17any other person to whom such purchaser may transfer the
18cigarettes without a valuable consideration, except a person
19who transfers to residents incarcerated in penal institutions
20or resident patients of a State-operated mental health facility
21ownership of cigarettes made, manufactured or fabricated as
22part of a correctional industries program.
23    "Secondary distributor" means any person engaged in the
24business of selling cigarettes who purchases stamped original
25packages of cigarettes from a licensed distributor under this
26Act or the Cigarette Use Tax Act, sells 75% or more of those

 

 

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1cigarettes to retailers for resale, and maintains an
2established business where a substantial stock of cigarettes is
3available to retailers for resale.
4    "Stamp" or "stamps" mean the indicia required to be affixed
5on a pack of cigarettes that evidence payment of the tax on
6cigarettes under Section 2 of this Act.
7    "Related party" means any person that is associated with
8any other person because he or she:
9        (a) is an officer or director of a business; or
10        (b) is legally recognized as a partner in business.
11(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
1296-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
13    Section 10. The Cigarette Use Tax Act is amended by
14changing Section 1 as follows:
 
15    (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
16    Sec. 1. For the purpose of this Act, unless otherwise
17required by the context:
18    "Use" means the exercise by any person of any right or
19power over cigarettes incident to the ownership or possession
20thereof, other than the making of a sale thereof in the course
21of engaging in a business of selling cigarettes and shall
22include the keeping or retention of cigarettes for use, except
23that "use" does not include the use of cigarettes by a
24not-for-profit research institution conducting tests

 

 

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1concerning the health effects of tobacco products, provided the
2cigarettes are not offered for resale.
3    "Brand Style" means a variety of cigarettes distinguished
4by the tobacco used, tar and nicotine content, flavoring used,
5size of the cigarette, filtration on the cigarette or
6packaging.
7    "Cigarette" means any roll for smoking made wholly or in
8part of tobacco irrespective of size or shape and whether or
9not such tobacco is flavored, adulterated or mixed with any
10other ingredient, and the wrapper or cover of which is made of
11paper or any other substance or material except tobacco.
12"Cigarette" also includes little cigars.
13    "Little cigar" means any roll for smoking, made wholly or
14in part of tobacco, if such product uses an integrated
15cellulose acetate or other similar filter and is wrapped in any
16substance containing tobacco, other than natural leaf tobacco.
17    "Contraband cigarettes" means:
18        (a) cigarettes that do not bear a required tax stamp
19    under this Act;
20        (b) cigarettes for which any required federal taxes
21    have not been paid;
22        (c) cigarettes that bear a counterfeit tax stamp;
23        (d) cigarettes that are manufactured, fabricated,
24    assembled, processed, packaged, or labeled by any person
25    other than (i) the owner of the trademark rights in the
26    cigarette brand or (ii) a person that is directly or

 

 

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1    indirectly authorized by such owner;
2        (e) cigarettes imported into the United States, or
3    otherwise distributed, in violation of the federal
4    Imported Cigarette Compliance Act of 2000 (Title IV of
5    Public Law 106-476);
6        (f) cigarettes that have false manufacturing labels;
7        (g) cigarettes identified in Section 3-10(a)(1) of
8    this Act; or
9        (h) cigarettes that are improperly tax stamped,
10    including cigarettes that bear a tax stamp of another state
11    or taxing jurisdiction.
12    "Person" means any natural individual, firm, partnership,
13association, joint stock company, joint adventure, public or
14private corporation, however formed, limited liability
15company, or a receiver, executor, administrator, trustee,
16guardian or other representative appointed by order of any
17court.
18    "Department" means the Department of Revenue.
19    "Sale" means any transfer, exchange or barter in any manner
20or by any means whatsoever for a consideration, and includes
21and means all sales made by any person.
22    "Original Package" means the individual packet, box or
23other container whatsoever used to contain and to convey
24cigarettes to the consumer.
25    "Distributor" means any and each of the following:
26        a. Any person engaged in the business of selling

 

 

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1    cigarettes in this State who brings or causes to be brought
2    into this State from without this State any original
3    packages of cigarettes, on which original packages there is
4    no authorized evidence underneath a sealed transparent
5    wrapper showing that the tax liability imposed by this Act
6    has been paid or assumed by the out-of-State seller of such
7    cigarettes, for sale in the course of such business.
8        b. Any person who makes, manufactures or fabricates
9    cigarettes in this State for sale, except a person who
10    makes, manufactures or fabricates cigarettes for sale to
11    residents incarcerated in penal institutions or resident
12    patients or a State-operated mental health facility.
13        c. Any person who makes, manufactures or fabricates
14    cigarettes outside this State, which cigarettes are placed
15    in original packages contained in sealed transparent
16    wrappers, for delivery or shipment into this State, and who
17    elects to qualify and is accepted by the Department as a
18    distributor under Section 7 of this Act.
19    "Distributor" does not include any person who transfers
20cigarettes to a not-for-profit research institution that
21conducts tests concerning the health effects of tobacco
22products and who does not offer the cigarettes for resale.
23    "Distributor maintaining a place of business in this
24State", or any like term, means any distributor having or
25maintaining within this State, directly or by a subsidiary, an
26office, distribution house, sales house, warehouse or other

 

 

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1place of business, or any agent operating within this State
2under the authority of the distributor or its subsidiary,
3irrespective of whether such place of business or agent is
4located here permanently or temporarily, or whether such
5distributor or subsidiary is licensed to transact business
6within this State.
7    "Business" means any trade, occupation, activity or
8enterprise engaged in or conducted in this State for the
9purpose of selling cigarettes.
10    "Prior Continuous Compliance Taxpayer" means any person
11who is licensed under this Act and who, having been a licensee
12for a continuous period of 5 years, is determined by the
13Department not to have been either delinquent or deficient in
14the payment of tax liability during that period or otherwise in
15violation of this Act. Also, any taxpayer who has, as verified
16by the Department, continuously complied with the condition of
17his bond or other security under provisions of this Act of a
18period of 5 consecutive years shall be considered to be a
19"prior continuous compliance taxpayer". In calculating the
20consecutive period of time described herein for qualification
21as a "prior continuous compliance taxpayer", a consecutive
22period of time of qualifying compliance immediately prior to
23the effective date of this amendatory Act of 1987 shall be
24credited to any licensee who became licensed on or before the
25effective date of this amendatory Act of 1987.
26    "Secondary distributor" means any person engaged in the

 

 

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1business of selling cigarettes who purchases stamped original
2packages of cigarettes from a licensed distributor under this
3Act or the Cigarette Tax Act, sells 75% or more of those
4cigarettes to retailers for resale, and maintains an
5established business where a substantial stock of cigarettes is
6available to retailers for resale.
7    "Secondary distributor maintaining a place of business in
8this State", or any like term, means any secondary distributor
9having or maintaining within this State, directly or by a
10subsidiary, an office, distribution house, sales house,
11warehouse, or other place of business, or any agent operating
12within this State under the authority of the secondary
13distributor or its subsidiary, irrespective of whether such
14place of business or agent is located here permanently or
15temporarily, or whether such secondary distributor or
16subsidiary is licensed to transact business within this State.
17    "Stamp" or "stamps" mean the indicia required to be affixed
18on a pack of cigarettes that evidence payment of the tax on
19cigarettes under Section 2 of this Act.
20    "Related party" means any person that is associated with
21any other person because he or she:
22        (a) is an officer or director of a business; or
23        (b) is legally recognized as a partner in business.
24(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
2596-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)