Rep. Karen A. Yarbrough

Filed: 3/3/2011

 

 


 

 


 
09700HB1731ham001LRB097 10208 HLH 51916 a

1
AMENDMENT TO HOUSE BILL 1731

2    AMENDMENT NO. ______. Amend House Bill 1731 by replacing
3everything after the enacting clause with the following:
 
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.

 

 

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1"Cigarette" also includes little cigars.
2    "Little cigar" means any roll for smoking, made wholly or
3in part of tobacco, if such product uses an integrated
4cellulose acetate or other similar filter and is wrapped in any
5substance containing tobacco, other than natural leaf tobacco.
6    "Contraband cigarettes" means:
7        (a) cigarettes that do not bear a required tax stamp
8    under this Act;
9        (b) cigarettes for which any required federal taxes
10    have not been paid;
11        (c) cigarettes that bear a counterfeit tax stamp;
12        (d) cigarettes that are manufactured, fabricated,
13    assembled, processed, packaged, or labeled by any person
14    other than (i) the owner of the trademark rights in the
15    cigarette brand or (ii) a person that is directly or
16    indirectly authorized by such owner;
17        (e) cigarettes imported into the United States, or
18    otherwise distributed, in violation of the federal
19    Imported Cigarette Compliance Act of 2000 (Title IV of
20    Public Law 106-476);
21        (f) cigarettes that have false manufacturing labels;
22        (g) cigarettes identified in Section 3-10(a)(1) of
23    this Act; or
24        (h) cigarettes that are improperly tax stamped,
25    including cigarettes that bear a tax stamp of another state
26    or taxing jurisdiction.

 

 

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1    "Person" means any natural individual, firm, partnership,
2association, joint stock company, joint adventure, public or
3private corporation, however formed, limited liability
4company, or a receiver, executor, administrator, trustee,
5guardian or other representative appointed by order of any
6court.
7    "Prior Continuous Compliance Taxpayer" means any person
8who is licensed under this Act and who, having been a licensee
9for a continuous period of 5 years, is determined by the
10Department not to have been either delinquent or deficient in
11the payment of tax liability during that period or otherwise in
12violation of this Act. Also, any taxpayer who has, as verified
13by the Department, continuously complied with the condition of
14his bond or other security under provisions of this Act for a
15period of 5 consecutive years shall be considered to be a
16"Prior continuous compliance taxpayer". In calculating the
17consecutive period of time described herein for qualification
18as a "prior continuous compliance taxpayer", a consecutive
19period of time of qualifying compliance immediately prior to
20the effective date of this amendatory Act of 1987 shall be
21credited to any licensee who became licensed on or before the
22effective date of this amendatory Act of 1987.
23    "Department" means the Department of Revenue.
24    "Sale" means any transfer, exchange or barter in any manner
25or by any means whatsoever for a consideration, and includes
26and means all sales made by any person.

 

 

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1    "Original Package" means the individual packet, box or
2other container whatsoever used to contain and to convey
3cigarettes to the consumer.
4    "Distributor" means any and each of the following:
5    (1) Any person engaged in the business of selling
6cigarettes in this State who brings or causes to be brought
7into this State from without this State any original packages
8of cigarettes, on which original packages there is no
9authorized evidence underneath a sealed transparent wrapper
10showing that the tax liability imposed by this Act has been
11paid or assumed by the out-of-State seller of such cigarettes,
12for sale or other disposition in the course of such business.
13    (2) Any person who makes, manufactures or fabricates
14cigarettes in this State for sale in this State, except a
15person who makes, manufactures or fabricates cigarettes as a
16part of a correctional industries program for sale to residents
17incarcerated in penal institutions or resident patients of a
18State-operated mental health facility.
19    (3) Any person who makes, manufactures or fabricates
20cigarettes outside this State, which cigarettes are placed in
21original packages contained in sealed transparent wrappers,
22for delivery or shipment into this State, and who elects to
23qualify and is accepted by the Department as a distributor
24under Section 4b of this Act.
25    "Place of business" shall mean and include any place where
26cigarettes are sold or where cigarettes are manufactured,

 

 

09700HB1731ham001- 5 -LRB097 10208 HLH 51916 a

1stored or kept for the purpose of sale or consumption,
2including any vessel, vehicle, airplane, train or vending
3machine.
4    "Business" means any trade, occupation, activity or
5enterprise engaged in for the purpose of selling cigarettes in
6this State.
7    "Retailer" means any person who engages in the making of
8transfers of the ownership of, or title to, cigarettes to a
9purchaser for use or consumption and not for resale in any
10form, for a valuable consideration. "Retailer" does not include
11a person:
12        (1) who transfers to residents incarcerated in penal
13    institutions or resident patients of a State-operated
14    mental health facility ownership of cigarettes made,
15    manufactured, or fabricated as part of a correctional
16    industries program; or
17        (2) who transfers cigarettes to a not-for-profit
18    research institution that conducts tests concerning the
19    health effects of tobacco products and who does not offer
20    the cigarettes for resale.
21    "Retailer" shall be construed to include any person who
22engages in the making of transfers of the ownership of, or
23title to, cigarettes to a purchaser, for use or consumption by
24any other person to whom such purchaser may transfer the
25cigarettes without a valuable consideration, except a person
26who transfers to residents incarcerated in penal institutions

 

 

09700HB1731ham001- 6 -LRB097 10208 HLH 51916 a

1or resident patients of a State-operated mental health facility
2ownership of cigarettes made, manufactured or fabricated as
3part of a correctional industries program.
4    "Secondary distributor" means any person engaged in the
5business of selling cigarettes who purchases stamped original
6packages of cigarettes from a licensed distributor under this
7Act or the Cigarette Use Tax Act, sells 75% or more of those
8cigarettes to retailers for resale, and maintains an
9established business where a substantial stock of cigarettes is
10available to retailers for resale.
11    "Stamp" or "stamps" mean the indicia required to be affixed
12on a pack of cigarettes that evidence payment of the tax on
13cigarettes under Section 2 of this Act.
14    "Related party" means any person that is associated with
15any other person because he or she:
16        (a) is an officer or director of a business; or
17        (b) is legally recognized as a partner in business.
18(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
1996-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
 
20    Section 10. The Cigarette Use Tax Act is amended by
21changing Section 1 as follows:
 
22    (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
23    Sec. 1. For the purpose of this Act, unless otherwise
24required by the context:

 

 

09700HB1731ham001- 7 -LRB097 10208 HLH 51916 a

1    "Use" means the exercise by any person of any right or
2power over cigarettes incident to the ownership or possession
3thereof, other than the making of a sale thereof in the course
4of engaging in a business of selling cigarettes and shall
5include the keeping or retention of cigarettes for use, except
6that "use" does not include the use of cigarettes by a
7not-for-profit research institution conducting tests
8concerning the health effects of tobacco products, provided the
9cigarettes are not offered for resale.
10    "Brand Style" means a variety of cigarettes distinguished
11by the tobacco used, tar and nicotine content, flavoring used,
12size of the cigarette, filtration on the cigarette or
13packaging.
14    "Cigarette" means any roll for smoking made wholly or in
15part of tobacco irrespective of size or shape and whether or
16not such tobacco is flavored, adulterated or mixed with any
17other ingredient, and the wrapper or cover of which is made of
18paper or any other substance or material except tobacco.
19"Cigarette" also includes little cigars.
20    "Little cigar" means any roll for smoking, made wholly or
21in part of tobacco, if such product uses an integrated
22cellulose acetate or other similar filter and is wrapped in any
23substance containing tobacco, other than natural leaf tobacco.
24    "Contraband cigarettes" means:
25        (a) cigarettes that do not bear a required tax stamp
26    under this Act;

 

 

09700HB1731ham001- 8 -LRB097 10208 HLH 51916 a

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

 

 

09700HB1731ham001- 9 -LRB097 10208 HLH 51916 a

1or by any means whatsoever for a consideration, and includes
2and means all sales made by any person.
3    "Original Package" means the individual packet, box or
4other container whatsoever used to contain and to convey
5cigarettes to the consumer.
6    "Distributor" means any and each of the following:
7        a. Any person engaged in the business of selling
8    cigarettes in this State who brings or causes to be brought
9    into this State from without this State any original
10    packages of cigarettes, on which original packages there is
11    no authorized evidence underneath a sealed transparent
12    wrapper showing that the tax liability imposed by this Act
13    has been paid or assumed by the out-of-State seller of such
14    cigarettes, for sale in the course of such business.
15        b. Any person who makes, manufactures or fabricates
16    cigarettes in this State for sale, except a person who
17    makes, manufactures or fabricates cigarettes for sale to
18    residents incarcerated in penal institutions or resident
19    patients or a State-operated mental health facility.
20        c. Any person who makes, manufactures or fabricates
21    cigarettes outside this State, which cigarettes are placed
22    in original packages contained in sealed transparent
23    wrappers, for delivery or shipment into this State, and who
24    elects to qualify and is accepted by the Department as a
25    distributor under Section 7 of this Act.
26    "Distributor" does not include any person who transfers

 

 

09700HB1731ham001- 10 -LRB097 10208 HLH 51916 a

1cigarettes to a not-for-profit research institution that
2conducts tests concerning the health effects of tobacco
3products and who does not offer the cigarettes for resale.
4    "Distributor maintaining a place of business in this
5State", or any like term, means any distributor having or
6maintaining within this State, directly or by a subsidiary, an
7office, distribution house, sales house, warehouse or other
8place of business, or any agent operating within this State
9under the authority of the distributor or its subsidiary,
10irrespective of whether such place of business or agent is
11located here permanently or temporarily, or whether such
12distributor or subsidiary is licensed to transact business
13within this State.
14    "Business" means any trade, occupation, activity or
15enterprise engaged in or conducted in this State for the
16purpose of selling cigarettes.
17    "Prior Continuous Compliance Taxpayer" means any person
18who is licensed under this Act and who, having been a licensee
19for a continuous period of 5 years, is determined by the
20Department not to have been either delinquent or deficient in
21the payment of tax liability during that period or otherwise in
22violation of this Act. Also, any taxpayer who has, as verified
23by the Department, continuously complied with the condition of
24his bond or other security under provisions of this Act of a
25period of 5 consecutive years shall be considered to be a
26"prior continuous compliance taxpayer". In calculating the

 

 

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1consecutive period of time described herein for qualification
2as a "prior continuous compliance taxpayer", a consecutive
3period of time of qualifying compliance immediately prior to
4the effective date of this amendatory Act of 1987 shall be
5credited to any licensee who became licensed on or before the
6effective date of this amendatory Act of 1987.
7    "Secondary distributor" means any person engaged in the
8business of selling cigarettes who purchases stamped original
9packages of cigarettes from a licensed distributor under this
10Act or the Cigarette Tax Act, sells 75% or more of those
11cigarettes to retailers for resale, and maintains an
12established business where a substantial stock of cigarettes is
13available to retailers for resale.
14    "Secondary distributor maintaining a place of business in
15this State", or any like term, means any secondary distributor
16having or maintaining within this State, directly or by a
17subsidiary, an office, distribution house, sales house,
18warehouse, or other place of business, or any agent operating
19within this State under the authority of the secondary
20distributor or its subsidiary, irrespective of whether such
21place of business or agent is located here permanently or
22temporarily, or whether such secondary distributor or
23subsidiary is licensed to transact business within this State.
24    "Stamp" or "stamps" mean the indicia required to be affixed
25on a pack of cigarettes that evidence payment of the tax on
26cigarettes under Section 2 of this Act.

 

 

09700HB1731ham001- 12 -LRB097 10208 HLH 51916 a

1    "Related party" means any person that is associated with
2any other person because he or she:
3        (a) is an officer or director of a business; or
4        (b) is legally recognized as a partner in business.
5(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
696-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)".