Sen. Terry Link

Filed: 4/25/2012

 

 


 

 


 
09700SB2900sam003LRB097 15550 HLH 68891 a

1
AMENDMENT TO SENATE BILL 2900

2    AMENDMENT NO. ______. Amend Senate Bill 2900, AS AMENDED,
3by replacing everything after the enacting clause with the
4following:
 
5    "Section 1. Short title. This Act may be cited as the
6Cigarette Machine Operators' Occupation Tax Act.
 
7    Section 5. Definitions. As used in this Act:
8    "Business" means any trade, occupation, activity or
9enterprise engaged in for the purpose of selling cigarettes in
10this State.
11    "Cigarette" means any roll for smoking made wholly or in
12part of tobacco, irrespective of size or shape and whether or
13not such tobacco is flavored, adulterated or mixed with any
14other ingredient, and the wrapper or cover of which is made of
15paper or any other substance or material except tobacco.
16    "Cigarette machine" means any machine, equipment or device

 

 

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1used to make or fabricate cigarettes.
2    "Cigarette machine" shall not include a handheld
3manually-operated device used by consumers to make
4roll-your-own cigarettes for personal consumption.
5    "Cigarette machine operator" means any person who is
6engaged in the business of operating a cigarette machine in
7this State and is licensed by the Department as a cigarette
8machine operator under Section 15 of this Act.
9    "Contraband cigarettes" means:
10        (1) cigarettes for which any required federal taxes
11    have not been paid;
12        (2) cigarettes that do not meet the requirements of
13    this Act;
14        (3) cigarettes that are made or fabricated by a person
15    holding a cigarette machine operator license under Section
16    15 of this Act and that are in the possession of
17    manufacturers, distributors, secondary distributors,
18    manufacturer representatives, or retailers, all as defined
19    by the Cigarette Tax Act, for the purpose of resale;
20        (4) cigarettes that are in the possession of a
21    cigarette machine operator and that are made or fabricated
22    with cigarette tubes that do not meet the requirements of
23    Section 30 of this Act;
24        (5) cigarettes that are in the possession of an
25    individual and that are made or fabricated with cigarette
26    tubes that do not meet the requirements of Section 30 of

 

 

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1    this Act, unless the cigarettes were made or fabricated by
2    an individual for the individual's own use and consumption
3    without the aid or use of a cigarette machine in the
4    possession of a cigarette machine operator holding a
5    license under Section 15 of this Act; or
6        (6) cigarettes that (i) are made or fabricated by a
7    person holding a cigarette machine operator license under
8    Section 15 of this Act, (ii) are in the possession of a
9    person, and (iii) contain tobacco of a brand family and
10    manufacturer that are not identified on the State of
11    Illinois Directory of Participating Manufacturers or the
12    Illinois Directory of Compliant Non-Participating
13    Manufacturers maintained by the Office of the Attorney
14    General.
15    "Department" means the Department of Revenue.
16    "Operate or operating a cigarette machine" means to possess
17a cigarette machine for the purpose of engaging in the business
18of making the cigarette machine available to individuals who
19use the cigarette machine to make or fabricate cigarettes for
20their own use or consumption, and not for resale. For purposes
21of this Act, the cigarette machine is operated by the person
22possessing the cigarette machine. For purposes of this Act,
23cigarettes made or fabricated by the use of a cigarette machine
24in the possession of a cigarette machine operator holding a
25license under Section 15 of this Act are considered to be made
26or fabricated by the person holding the cigarette machine

 

 

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1operator license and not the individual.
2    "Original package" means the individual packet, box, or
3other container used to contain and convey cigarettes to the
4consumer.
5    "Person" means any natural individual, firm, partnership,
6association, joint stock company, joint adventure, public or
7private corporation, however formed, limited liability
8company, or a receiver, executor, administrator, trustee,
9guardian, or other representative appointed by order of any
10court.
11    "Place of business" means any place where cigarettes are
12made or fabricated by a cigarette machine operator holding a
13license under Section 15 of this Act.
14    "Possess or possessing a cigarette machine" means to own,
15lease, rent or have on one's premises a cigarette machine for
16the purpose of engaging in the business of making the cigarette
17machine available to individuals who use the cigarette machine
18to make or fabricate cigarettes for their own use or
19consumption, and not for resale.
20    "Prior continuous compliance taxpayer" means any person
21who is licensed under this Act and who, having been a licensee
22for a continuous period of 5 years, is determined by the
23Department not to have been either delinquent or deficient in
24the payment of tax liability during that period or otherwise in
25violation of this Act. "Prior continuous compliance taxpayer"
26also means any taxpayer who has, as verified by the Department,

 

 

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1continuously complied with the condition of his bond or other
2security under provisions of this Act for a period of 5
3consecutive years.
4    "Retailer" means any person who engages in the making of
5transfers of the ownership of, or title to, tobacco or
6cigarettes to a purchaser for use or consumption and not for
7resale in any form, for a valuable consideration.
8    "Sale" means any transfer, exchange, or barter in any
9manner or by any means whatsoever for a consideration, and
10includes and means all sales made by any person.
 
11    Section 10. Tax imposed.
12    (a) A tax is imposed upon all persons engaged in the
13business of operating a cigarette machine. The tax is imposed
14at the rate of 49 mills per cigarette made or fabricated by a
15cigarette machine possessed by a cigarette machine operator.
16    (b) If, on or after the effective date of this amendatory
17Act of the 97th General Assembly, the General Assembly
18increases the rate of tax imposed under Section 2 of the
19Cigarette Tax Act, then the tax imposed under subsection (a) of
20this Section shall be increased by the same amount beginning on
21the effective date of the Cigarette Tax increase.
22    (c) The tax herein imposed shall be in addition to all
23other occupation or privilege taxes imposed by the State of
24Illinois or by any municipal corporation or political
25subdivision thereof.

 

 

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1    (d) Persons subject to the tax imposed by this Act may
2reimburse themselves for their tax liability under this Act by
3separately stating such tax, less any credit the machine
4operator claims under subsection (b) of Section 40 of this Act
5on tobacco sold to and used by users of a cigarette machine to
6make or fabricate cigarettes, as an additional charge to users
7of cigarette machines.
8    (e) If any cigarette machine operator collects an amount
9(however designated) which purports to reimburse such operator
10for his or her cigarette machine operators' occupation tax
11liability under this Act with respect to cigarettes that are
12not subject to cigarette machine operators' occupation tax
13under this Act, or if any cigarette machine operator, in
14collecting an amount (however designated) which purports to
15reimburse such operator for his or her cigarette machine
16operators' occupation tax liability measured by cigarettes
17made or fabricated by a cigarette machine that are subject to
18tax under this Act, collects more from the customer than the
19cigarette machine operators' cigarette machine operators'
20occupation tax liability in the transaction, the customer shall
21have a legal right to claim a refund of that amount from the
22cigarette machine operator. However, if such amount is not
23refunded to the customer for any reason, the cigarette machine
24operator is liable to pay such amount to the Department.
 
25    Section 15. Cigarette machine operator license. No person

 

 

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1may engage in the business of operating a cigarette machine in
2this State without first having obtained a license from the
3Department. Application for a license shall be made to the
4Department on a form furnished and prescribed by the
5Department. Each applicant for a license under this Section
6shall furnish the following information to the Department on a
7form signed and verified by the applicant under penalty of
8perjury:
9        (1) the name and address of the applicant;
10        (2) the address of the location at which the applicant
11    proposes to engage in the business of operating a cigarette
12    machine in this State; and
13        (3) any other additional information the Department
14    may reasonably require.
15    The annual license fee payable to the Department for each
16cigarette machine operator license is $250. Each applicant for
17a license shall pay that fee to the Department at the time of
18submitting an application for license to the Department.
19    Every applicant who is required to procure a cigarette
20machine operator license shall file with his or her application
21a joint and several bond. Such bond shall be executed to the
22Department of Revenue, with good and sufficient surety or
23sureties residing or licensed to do business within the State
24of Illinois, in the amount of $2,500, conditioned upon the true
25and faithful compliance by the licensee with all of the
26provisions of this Act. Such bond, or a reissue thereof, or a

 

 

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1substitute therefore, shall be kept in effect during the entire
2period covered by the license. A separate application for
3license shall be made, a separate annual license fee paid, and
4a separate bond filed, for each place of business at which a
5person who is required to procure a cigarette machine operator
6license under this Section proposes to engage in business as a
7cigarette machine operator in Illinois under this Act.
8    The following are ineligible to receive a cigarette machine
9operator license under this Act:
10        (1) a person who is not of good character and
11    reputation in the community in which he resides;
12        (2) a person who has been convicted of a felony under
13    any federal or State law, if the Department, after
14    investigation and a hearing, if requested by the applicant,
15    determines that such person has not been sufficiently
16    rehabilitated to warrant the public trust;
17        (3) a corporation, if any officer, manager, or director
18    thereof, or any stockholder or stockholders owning in the
19    aggregate more than 5% of the stock of such corporation,
20    would not be eligible to receive a license under this Act
21    for any reason; or
22        (4) a person, or any person who owns more than 15% of
23    the ownership interests in an entity or a related party
24    who:
25            (A) owes, at the time of application, any
26        delinquent cigarette taxes or tobacco taxes that have

 

 

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1        been determined by law to be due and unpaid, unless the
2        license applicant has entered into an agreement
3        approved by the Department to pay the amount due;
4            (B) has had a license under this Act, the Cigarette
5        Tax Act, the Cigarette Use Tax Act, or the Tobacco
6        Products Tax Act of 1995 revoked within the past 2
7        years by the Department for misconduct relating to
8        stolen or contraband cigarettes or has been convicted
9        of a State or federal crime, punishable by imprisonment
10        of one year or more, relating to stolen or contraband
11        cigarettes;
12            (C) has been found by the Department, after notice
13        and a hearing, to have imported or caused to be
14        imported into the United States for sale or
15        distribution any cigarette in violation of 19 U.S.C.
16        1681a;
17            (D) has been found by the Department, after notice
18        and a hearing, to have imported or caused to be
19        imported into the United States for sale or
20        distribution, or manufactured for sale or distribution
21        in the United States, any cigarette that does not fully
22        comply with the Federal Cigarette Labeling and
23        Advertising Act (15 U.S.C. 1331, et seq.); or
24            (E) has been found by the Department, after notice
25        and a hearing, to have made a material false statement
26        in the application or has failed to produce records

 

 

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1        required to be maintained by this Act.
2     The Department, upon receipt of an application, license
3fee, and bond in proper form from a person who is eligible to
4receive a cigarette machine operator license under this Act,
5shall issue to such applicant a license in a form as prescribed
6by the Department. That license shall permit the applicant to
7whom it is issued to engage in business as a cigarette machine
8operator at the place shown in his or her application. All
9licenses issued by the Department under this Section shall be
10valid for a period not to exceed one year after issuance unless
11sooner revoked, canceled, or suspended as provided in this Act.
12No license issued under this Section is transferable or
13assignable. Such license shall be conspicuously displayed in
14the place of business conducted by the licensee in Illinois
15under such license. No cigarette machine operator acquires any
16vested interest or compensable property right in a license
17issued under this Act.
18    A cigarette machine operator shall notify the Department of
19any change in the information contained on the application
20form, including any change in ownership, and shall do so within
2130 days after that change.
22    Every prior continuous compliance taxpayer shall be exempt
23from all requirements under this Section concerning the
24furnishing of bond as a condition precedent to his being
25authorized to engage in the business licensed under this Act.
26This exemption shall continue for each prior continuous

 

 

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1compliance taxpayer until such time as he may be determined by
2the Department to be delinquent in the filing of any returns,
3or is determined by the Department (either through the
4Department's issuance of a final assessment which has become
5final under the Act, or by the taxpayer's filing of a return
6which admits tax to be due that is not paid) to be delinquent
7or deficient in the paying of any tax under this Act, at which
8time that taxpayer shall become subject to the bond
9requirements of this Section and, as a condition of being
10allowed to continue to engage in the business licensed under
11this Act, shall be required to furnish bond to the Department
12in such form as provided in this Section. The taxpayer shall
13furnish such bond for a period of 2 years, after which, if the
14taxpayer has not been delinquent in the filing of any returns,
15or delinquent or deficient in the paying of any tax under this
16Act, the Department may reinstate that person as a prior
17continuance compliance taxpayer. Any taxpayer who fails to pay
18an admitted or established liability under this Act may also be
19required by the Department to post bond or other acceptable
20security with the Department guaranteeing the payment of that
21admitted or established liability.
22    The Department shall discharge any surety and shall release
23and return any bond or security deposited, assigned, pledged,
24or otherwise provided to it by a taxpayer under this Section
25within 30 days after:
26        (1) that taxpayer becomes a prior continuous

 

 

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1    compliance taxpayer; or
2        (2) that taxpayer has ceased to collect receipts on
3    which he is required to remit tax to the Department, has
4    filed a final tax return, and has paid to the Department an
5    amount sufficient to discharge his remaining tax liability
6    as determined by the Department under this Act. The
7    Department shall make a final determination of the
8    taxpayer's outstanding tax liability as expeditiously as
9    possible after his final tax return has been filed. If the
10    Department cannot make the final determination within 45
11    days after receiving the final tax return, it shall so
12    notify the taxpayer within that period, stating its reasons
13    therefore.
14    Any person aggrieved by any decision of the Department
15under this Section may, within 20 days after receiving notice
16of the decision, protest and request a hearing. Upon receiving
17a written request for a hearing, the Department shall give
18notice to the person requesting the hearing of the time and
19place fixed for the hearing and shall hold a hearing in
20conformity with the provisions of this Act and then issue its
21final administrative decision in the matter to that person. In
22the absence of a protest and request for a hearing within 20
23days, the Department's decision shall become final without any
24further determination being made or notice given.
 
25    Section 20. Revocation, cancellation, or suspension of

 

 

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1license. The Department may, after notice and hearing as
2provided for by this Act, revoke, cancel, or suspend the
3license of any cigarette machine operator for the violation of
4any provision of this Act, or for noncompliance with the
5provisions of this Act, or for any noncompliance with any
6lawful rule or regulation promulgated by the Department under
7this Act, or because the licensee is determined to be
8ineligible for a cigarette machine operator's license for any
9one or more of the reasons provided for in Section 15 of this
10Act.
11    Any cigarette machine operator aggrieved by any decision of
12the Department under this Section may, within 20 days after
13notice of the decision, protest and request a hearing. Upon
14receiving a written request for a hearing, the Department shall
15give notice in writing to the cigarette machine operator
16requesting the hearing that contains a statement of the charges
17preferred against the cigarette machine operator and that
18states the time and place fixed for the hearing. The Department
19shall hold the hearing in conformity with the provisions of
20this Act and then issue its final administrative decision in
21the matter to the cigarette machine operator. In the absence of
22a written protest and request for a hearing within 20 days, the
23Department's decision shall become final without any further
24determination being made or notice given.
25    No license so revoked shall be reissued to any cigarette
26machine operator for a period of 6 months after the date of the

 

 

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1final determination of such revocation. No license shall be
2reissued at all so long as the person who would receive the
3license is ineligible to receive a cigarette machine operator
4under this Act for any one or more of the reasons provided for
5in Section 15 of this Act.
6    The Department, upon complaint filed in the Circuit Court,
7may, by injunction, restrain any person who fails or refuses to
8comply with any of the provisions of this Act from acting as a
9cigarette machine operator in this State.
 
10    Section 25. Restriction on tobacco used in cigarette
11machines.
12    (a) Only roll-your-own tobacco products of a brand family
13and manufacturer identified on the State of Illinois Directory
14of Participating Manufacturers or the Illinois Directory of
15Compliant Non-Participating Manufacturers maintained by the
16Office of the Attorney General may be sold by cigarette machine
17operators to customers for use in cigarette machines possessed
18by the cigarette machine operator.
19    (b) Only roll-your-own tobacco products meeting the
20requirements of subsection (a) and purchased at the place of
21business of the cigarette machine operator may be used in a
22cigarette machine at that location.
 
23    Section 30. Cigarette tubes used in cigarette machines.
24    (a) All cigarette tubes used in cigarette machines in the

 

 

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1possession of cigarette machine operators licensed under
2Section 15 of this Act shall be constructed of paper of a type
3determined by the Attorney General, pursuant to rules
4promulgated by the Attorney General under the provisions of the
5Administrative Procedure Act, to reduce the likely ignition
6propensity of cigarettes made by those tubes.
7    (b) A cigarette machine operator is not required to comply
8with subsection (a) of this Section until the Attorney General
9has promulgated rules implementing subsection (a) and the rules
10have become effective. The effective date for such rules shall
11be no earlier than January 1, 2014.
 
12    Section 35. Cigarette machine operators; sale of
13cigarettes.
14    (a) The cigarette machine operator is responsible for
15complying with all State and federal laws and regulations
16regarding packaging and labeling of original packages of
17cigarettes.
18    (b) A person possessing a cigarette machine operator
19license may not purchase unstamped cigarettes from an in-State
20or out-of-State manufacturer or distributor of cigarettes.
21    (c) Cigarettes made or fabricated by a cigarette machine
22may not be sold or distributed to, or possessed by,
23manufacturers, distributors, secondary distributors,
24manufacturer representatives, or retailers, except the
25cigarette machine operator.

 

 

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1    (d) A cigarette machine possessed by a cigarette machine
2operator shall have a secure meter that counts the number of
3cigarettes made or fabricated by the cigarette machine and that
4cannot be accessed, altered, or reset by the machine operator,
5except for the sole purpose of taking meter readings.
 
6    Section 40. Returns.
7    (a) Cigarette machine operators shall file a return and
8remit the tax imposed by Section 10 by the 15th day of each
9month covering the preceding calendar month. Each such return
10shall show: the quantity of cigarettes made or fabricated
11during the period covered by the return; the beginning and
12ending meter reading for each cigarette machine for the period
13covered by the return; the quantity of such cigarettes sold or
14otherwise disposed of during the period covered by the return;
15the brand family and manufacturer and quantity of tobacco
16products used to make or fabricate cigarettes by use of a
17cigarette machine; the license number of each distributor from
18whom tobacco products are purchased; the type and quantity of
19cigarette tubes purchased for use in a cigarette machine; the
20type and quantity of cigarette tubes used in a cigarette
21machine; and such other information as the Department may
22require. Such returns shall be filed on forms prescribed and
23furnished by the Department. The Department may promulgate
24rules to require that the cigarette machine operator's return
25be accompanied by appropriate computer generated magnetic

 

 

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1media supporting schedule data in the format required by the
2Department, unless, as provided by rule, the Department grants
3an exception upon petition of a cigarette machine operator.
4    Cigarette machine operators shall send a copy of those
5returns, together with supporting schedule data, to the
6Attorney General's Office by the 15th day of each month for the
7period covering the preceding calendar month.
8    (b) Cigarette machine operators may take a credit against
9any tax due under Section 10 of this Act for taxes imposed and
10paid under the Tobacco Products Tax Act of 1995 on tobacco
11products sold to a customer and used in a rolling machine
12located at the cigarette machine operator's place of business.
13To be eligible for such credit, the tobacco product must meet
14the requirements of Section 25(a) of this Act. This subsection
15(c) is exempt from the provisions of Section 155 of this Act.
 
16    Section 45. Examination and correction of returns.
17    (a) As soon as practicable after any return is filed, the
18Department shall examine that return and shall correct the
19return according to its best judgment and information, which
20return so corrected by the Department shall be prima facie
21correct and shall be prima facie evidence of the correctness of
22the amount of tax due, as shown on the corrected return.
23Instead of requiring the cigarette machine operator to file an
24amended return, the Department may simply notify the cigarette
25machine operator of the correction or corrections it has made.

 

 

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1Proof of the correction by the Department may be made at any
2hearing before the Department or in any legal proceeding by a
3reproduced copy of the Department's record relating thereto in
4the name of the Department under the certificate of the
5Director of Revenue. Such reproduced copy shall, without
6further proof, be admitted into evidence before the Department
7or in any legal proceeding and shall be prima facie proof of
8the correctness of the amount of tax due, as shown on the
9reproduced copy. If the Department finds that any amount of tax
10is due from the cigarette machine operator, the Department
11shall issue the cigarette machine operator a notice of tax
12liability for the amount of tax claimed by the Department to be
13due, together with a penalty in an amount determined in
14accordance with Sections 3-3, 3-5 and 3-6 of the Uniform
15Penalty and Interest Act. If, in administering the provisions
16of this Act, comparison of a return or returns of a cigarette
17machine operator with the books, records, and inventories of
18such cigarette machine operator discloses a deficiency that
19cannot be allocated by the Department to a particular month or
20months, the Department shall issue the cigarette machine
21operator a notice of tax liability for the amount of tax
22claimed by the Department to be due for a given period, but
23without any obligation upon the Department to allocate that
24deficiency to any particular month or months, together with a
25penalty in an amount determined in accordance with Sections
263-3, 3-5, and 3-6 of the Uniform Penalty and Interest Act,

 

 

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1under which circumstances the aforesaid notice of tax liability
2shall be prima facie correct and shall be prima facie evidence
3of the correctness of the amount of tax due, as shown therein;
4and proof of such correctness may be made in accordance with,
5and the admissibility of a reproduced copy of such notice of
6tax liability shall be governed by, all the provisions of this
7Act applicable to corrected returns. If any cigarette machine
8operator filing any return dies or becomes a person under legal
9disability at any time before the Department issues its notice
10of tax liability, such notice shall be issued to the
11administrator, executor, or other legal representative of the
12cigarette machine operator.
13    (b) If, within 60 days after such notice of tax liability,
14the cigarette machine operator or his or her legal
15representative files a written protest to such notice of tax
16liability and requests a hearing thereon, the Department shall
17give notice to such cigarette machine operator or legal
18representative of the time and place fixed for such hearing,
19and shall hold a hearing in conformity with the provisions of
20this Act, and pursuant thereto shall issue a final assessment
21to such cigarette machine operator or legal representative for
22the amount found to be due as a result of such hearing. If a
23written protest to the notice of tax liability and a request
24for a hearing thereon is not filed within 60 days after such
25notice of tax liability, such notice of tax liability shall
26become final without the necessity of a final assessment being

 

 

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1issued and shall be deemed to be a final assessment.
2    (c) In case of failure to pay the tax, or any portion
3thereof, or any penalty provided for in this Act, when due, the
4Department may bring suit to recover the amount of such tax, or
5portion thereof, or penalty; or, if the taxpayer dies or
6becomes incompetent, by filing claim therefore against his or
7her estate; provided that no such action with respect to any
8tax, or portion thereof, or penalty, shall be instituted more
9than 2 years after the cause of action accrues, except with the
10consent of the person from whom such tax or penalty is due.
11    After the expiration of the period within which the person
12assessed may file an action for judicial review under the
13Administrative Review Law without such an action being filed, a
14certified copy of the final assessment or revised final
15assessment of the Department may be filed with the Circuit
16Court of the county in which the taxpayer has his or her
17principal place of business, or of Sangamon County in those
18cases in which the taxpayer does not have his or her principal
19place of business in this State. The certified copy of the
20final assessment or revised final assessment shall be
21accompanied by a certification which recites facts that are
22sufficient to show that the Department complied with the
23jurisdictional requirements of the Law in arriving at its final
24assessment or its revised final assessment and that the
25taxpayer had his or her opportunity for an administrative
26hearing and for judicial review, whether he or she availed

 

 

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1himself or herself of either or both of these opportunities or
2not. If the Court is satisfied that the Department complied
3with the jurisdictional requirements of the Law in arriving at
4its final assessment or its revised final assessment and that
5the taxpayer had his or her opportunity for an administrative
6hearing and for judicial review, whether he or she availed
7himself or herself of either or both of these opportunities or
8not, the court shall enter judgment in favor of the Department
9and against the taxpayer for the amount shown to be due by the
10final assessment or the revised final assessment, and such
11judgment shall be filed of record in the court. Such judgment
12shall bear the rate of interest set in the Uniform Penalty and
13Interest Act, but otherwise shall have the same effect as other
14judgments. The judgment may be enforced, and all laws
15applicable to sales for the enforcement of a judgment shall be
16applicable to sales made under such judgments. The Department
17shall file the certified copy of its assessment, as herein
18provided, with the Circuit Court within 2 years after such
19assessment becomes final except when the taxpayer consents in
20writing to an extension of such filing period.
21    If, when the cause of action for a proceeding in court
22accrues against a person, he or she is out of the State, the
23action may be commenced within the times herein limited, after
24his or her coming into or returning to the State; and if, after
25the cause of action accrues, he or she departs from and remains
26out of the State, the time of his or her absence is no part of

 

 

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1the time limited for the commencement of the action; but the
2foregoing provisions concerning absence from the State shall
3not apply to any case in which, at the time the cause of action
4accrues, the party against whom the cause of action accrues is
5not a resident of this State. The time within which a court
6action is to be commenced by the Department hereunder shall not
7run while the taxpayer is a debtor in any proceeding under the
8federal Bankruptcy Code nor thereafter until 90 days after the
9Department is notified by such debtor of being discharged in
10bankruptcy.
11    No claim shall be filed against the estate of any deceased
12person or a person under legal disability for any tax or
13penalty or part of either except in the manner prescribed and
14within the time limited by the Probate Act of 1975, as amended.
15    The remedies provided for herein shall not be exclusive,
16but all remedies available to creditors for the collection of
17debts shall be available for the collection of any tax or
18penalty due hereunder.
19    The collection of tax or penalty by any means provided for
20herein shall not be a bar to any prosecution under this Act.
21    The certificate of the Director of the Department to the
22effect that a tax or amount required to be paid by this Act has
23not been paid, that a return has not been filed, or that
24information has not been supplied pursuant to the provisions of
25this Act, shall be prima facie evidence thereof.
26    All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,

 

 

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15g, 5i and 5j of the Retailers' Occupation Tax Act, which are
2not inconsistent with this Act, shall apply, as far as
3practicable, to the subject matter of this Act to the same
4extent as if such provisions were included herein. References
5in such incorporated Sections of the "Retailers Occupation Tax
6Act" to retailers, to sellers, or to persons engaged in the
7business of selling tangible personal property shall mean
8cigarette machine operator when used in this Act.
 
9    Section 50. Failure to file return or pay tax; penalty;
10protest.
11    In case any person who is required to file a return under
12this Act fails to file a return, or files a return and fails to
13remit the correct amount of tax, the Department shall determine
14the amount of tax due from him according to its best judgment
15and information, which amount so fixed by the Department shall
16be prima facie correct and shall be prima facie evidence of the
17correctness of the amount of tax due, as shown in such
18determination. Proof of such determination by the Department
19may be made at any hearing before the Department or in any
20legal proceeding by a reproduced copy of the Department's
21record relating thereto in the name of the Department under the
22certificate of the Director of Revenue. Such reproduced copy
23shall, without further proof, be admitted into evidence before
24the Department or in any legal proceeding and shall be prima
25facie proof of the correctness of the amount of tax due, as

 

 

09700SB2900sam003- 24 -LRB097 15550 HLH 68891 a

1shown therein. The Department shall issue such person a notice
2of tax liability for the amount of tax claimed by the
3Department to be due, together with a penalty in an amount
4determined in accordance with Sections 3-3, 3-5 and 3-6 of the
5Uniform Penalty and Interest Act. If such person or the legal
6representative of such person, within 60 days after such
7notice, files a written protest to such notice of tax liability
8and requests a hearing thereon, the Department shall give
9notice to such person or the legal representative of such
10person of the time and place fixed for such hearing and shall
11hold a hearing in conformity with the provisions of this Act,
12and pursuant thereto shall issue a final assessment to such
13person or to the legal representative of such person for the
14amount found to be due as a result of such hearing. If a
15written protest to the notice of tax liability and a request
16for a hearing thereon is not filed within 60 days after such
17notice of tax liability, such notice of tax liability shall
18become final without the necessity of a final assessment being
19issued and shall be deemed to be a final assessment.
 
20    Section 55. Claims; credit memorandum or refunds. If it
21appears, after claim is filed with the Department, that an
22amount of tax or penalty has been paid which was not due under
23this Act, whether as the result of a mistake of fact or an
24error of law, except as hereinafter provided, then the
25Department shall issue a credit memorandum or refund to the

 

 

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1person who made the erroneous payment or, if that person has
2died or become a person under legal disability, to his or her
3legal representative.
4    If it is determined that the Department should issue a
5credit or refund under this Act, the Department may first apply
6the amount thereof against any amount of tax or penalty due
7under this Act, the Cigarette Tax Act, the Cigarette Use Tax
8Act, or the Tobacco Products Act of 1995 from the person
9entitled to that credit or refund. For this purpose, if
10proceedings are pending to determine whether or not any tax or
11penalty is due under this Act or under the Cigarette Tax Act,
12Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
13the person, the Department may withhold issuance of the credit
14or refund pending the final disposition of such proceedings and
15may apply such credit or refund against any amount found to be
16due to the Department under this Act, the Cigarette Tax Act,
17the Cigarette Use Tax Act, or the Tobacco Products Act of 1995
18as a result of such proceedings. The balance, if any, of the
19credit or refund shall be issued to the person entitled
20thereto.
21    If no tax or penalty is due and no proceeding is pending to
22determine whether such taxpayer is indebted to the Department
23for the payment of a tax or penalty, the credit memorandum or
24refund shall be issued to the claimant; or (in the case of a
25credit memorandum) the credit memorandum may be assigned and
26set over by the lawful holder thereof, subject to reasonable

 

 

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1rules of the Department, to any other person who is subject to
2this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or
3the Tobacco Products Act of 1995, and the amount thereof shall
4be applied by the Department against any tax or penalty due or
5to become due under this Act, the Cigarette Tax Act, the
6Cigarette Use Tax Act, or the Tobacco Products Act of 1995 from
7such assignee.
8    As to any claim filed hereunder with the Department on and
9after each January 1 and July 1, no amount of tax or penalty
10erroneously paid (either in total or partial liquidation of a
11tax or penalty under this Act) more than 3 years prior to such
12January 1 and July 1, respectively, shall be credited or
13refunded, except that, if both the Department and the taxpayer
14have agreed to an extension of time to issue a notice of tax
15liability under this Act, the claim may be filed at any time
16prior to the expiration of the period agreed upon.
17    Any credit or refund that is allowed under this Act shall
18bear interest at the rate and in the manner set forth in the
19Uniform Penalty and Interest Act.
20    In case the Department determines that the claimant is
21entitled to a refund, such refund shall be made only from
22appropriations available for that purpose. If it appears
23unlikely that the amount appropriated would permit everyone
24having a claim allowed during the period covered by such
25appropriation to elect to receive a cash refund, the
26Department, by rule or regulation, shall provide for the

 

 

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1payment of refunds in hardship cases and shall define what
2types of cases qualify as hardship cases.
3    The provisions of Sections 6a, 6b, and 6c of the Retailers'
4Occupation Tax Act which are not inconsistent with this Act,
5shall apply, as far as practicable, to the subject matter of
6this Act to the same extent as if such provisions were included
7herein.
 
8    Section 60. Investigations and hearings. The Department,
9or any officer or employee designated in writing by the
10Director thereof, for the purpose of administering and
11enforcing the provisions of this Act, may hold investigations
12and hearings concerning any matters covered by this Act, and
13may examine books, papers, records, or memoranda bearing upon
14the sale or other disposition of cigarettes or tobacco products
15by a cigarette machine operator, and may issue subpoenas
16requiring the attendance of a cigarette machine operator, or
17any officer or employee of a cigarette machine operator, or any
18person having knowledge of the facts, and may take testimony
19and require proof, and may issue subpoenas duces tecum to
20compel the production of relevant books, papers, records, and
21memoranda, for the information of the Department.
22    In the conduct of any investigation or hearing provided for
23by this Act, neither the Department, nor any officer or
24employee thereof, shall be bound by the technical rules of
25evidence, and no informality in the proceedings nor in the

 

 

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1manner of taking testimony shall invalidate any rule, order,
2decision, or regulation made, approved, or confirmed by the
3Department.
4    The Director of Revenue, or any duly authorized officer or
5employee of the Department, shall have the power to administer
6oaths to such persons required by this Act to give testimony
7before the Department.
8     The books, papers, records, and memoranda of the
9Department, or parts thereof, may be proved in any hearing,
10investigation or legal proceeding by a reproduced copy thereof
11under the certificate of the Director of Revenue. Such
12reproduced copy shall, without further proof, be admitted into
13evidence before the Department or in any legal proceeding.
 
14    Section 65. Testimony and production of documents;
15immunity. No person shall be excused from testifying or from
16producing any books, papers, records, or memoranda in any
17investigation or upon any hearing, when ordered to do so by the
18Department or any officer or employee thereof, upon the ground
19that the testimony or evidence, documentary or otherwise, may
20tend to incriminate him or subject him to a criminal penalty,
21but no person shall be prosecuted or subjected to any criminal
22penalty for or on account of the subject matter of his or her
23testimony or the evidence produced before the Department or an
24officer or employee of the Department; provided that such
25immunity shall extend only to a natural person who, in

 

 

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1obedience to a subpoena, gives testimony under oath or produces
2evidence under oath. No person so testifying shall be exempt
3from prosecution and punishment for perjury committed in so
4testifying.
 
5    Section 70. Confidentiality; official purposes. All
6information received by the Department from returns or reports
7filed under this Act, or from any investigation conducted under
8this Act, shall be confidential, except for official purposes,
9and any person who divulges any such information in any manner,
10except in accordance with a proper judicial order or as
11otherwise provided by law, shall be guilty of a Class A
12misdemeanor.
13    Nothing in this Act prevents the Director of Revenue from
14publishing or making available to the public the names and
15addresses of persons filing returns or reports under this Act,
16or reasonable statistics concerning the operation of the tax by
17grouping the contents of returns or reports so that the
18information in any individual return or report is not
19disclosed.
20    Nothing in this Act prevents the Director of Revenue from
21divulging to the United States Government or the government of
22any other state, or any officer or agency thereof, for
23exclusively official purposes, information received by the
24Department in administering this Act, provided that such other
25governmental agency agrees to divulge requested tax

 

 

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1information to the Department.
2    The furnishing upon request of the Auditor General, or his
3authorized agents, for official use, of returns or reports
4filed and information related thereto under this Act is deemed
5to be an official purpose within the meaning of this Section.
6    The furnishing of financial information to a home rule unit
7with a population in excess of 2,000,000 that has imposed a tax
8similar to that imposed by this Act under its home rule powers,
9upon request of the Chief Executive of the home rule unit, is
10an official purpose within the meaning of this Section,
11provided the home rule unit agrees in writing to the
12requirements of this Section. Information so provided is
13subject to all confidentiality provisions of this Section. The
14written agreement shall provide for reciprocity, limitations
15on access, disclosure, and procedures for requesting
16information.
17    The Director may make available to any State agency,
18including the Illinois Supreme Court, that licenses persons to
19engage in any occupation, information that a person licensed by
20such agency has failed to file returns under this Act or pay
21the tax, penalty, and interest shown therein, or has failed to
22pay any final assessment of tax, penalty, or interest due under
23this Act or has failed to file reports under this Act. An
24assessment is final when all proceedings in court for review of
25such assessment have terminated or the time for the taking
26thereof has expired without such proceedings being instituted.

 

 

09700SB2900sam003- 31 -LRB097 15550 HLH 68891 a

1    The Director shall make available for public inspection in
2the Department's principal office and for publication, at cost,
3administrative decisions issued on or after January 1, 2013.
4These decisions are to be made available in a manner so that
5the following taxpayer or licensee information is not
6disclosed:
7        (1) The names, addresses, and identification numbers
8    of the taxpayer or licensee, related entities, and
9    employees.
10        (2) At the sole discretion of the Director, trade
11    secrets or other confidential information identified as
12    such by the taxpayer or licensee no later than 30 days
13    after receipt of an administrative decision, by such means
14    as the Department shall provide by rule.
15    The Director shall determine the appropriate extent of the
16deletions allowed in paragraph (2). In the event the taxpayer
17or licensee does not submit deletions, the Director shall make
18only the deletions specified in paragraph (1).
19    The Director shall make available for public inspection and
20publication each administrative decision within 180 days after
21the issuance of the administrative decision. The term
22"administrative decision" has the same meaning as defined in
23Section 3-101 of Article III of the Code of Civil Procedure.
24Costs collected under this Section shall be paid into the Tax
25Compliance and Administration Fund.
26    Nothing contained in this Act shall prevent the Director

 

 

09700SB2900sam003- 32 -LRB097 15550 HLH 68891 a

1from divulging information to any person pursuant to a request
2or authorization made by the taxpayer or licensee or by an
3authorized representative of the taxpayer or licensee.
 
4    Section 75. Records. Every cigarette machine operator who
5is required to procure a license under this Act shall keep
6within Illinois, at his licensed address: complete and accurate
7records of the quantity of such cigarettes made or fabricated;
8meter readings for each cigarette machine; the quantity of such
9cigarettes sold or otherwise disposed of; the brand family and
10manufacturer and quantity of tobacco products purchased and the
11brand family and manufacturer and quantity of tobacco products
12used to make or fabricate cigarettes by use of a cigarette
13machine; the name, address, and license number of each
14distributor from whom the cigarette machine operator purchases
15tobacco products; the type and quantity of cigarette tubes
16purchased for use in a cigarette machine; the type and quantity
17of cigarette tubes used in a cigarette machine; and such other
18information as the Department may require, and shall preserve
19and keep within Illinois at his licensed address all invoices,
20bills of lading, sales records, copies of bills of sale,
21inventory at the close of each period for which a return is
22required of all cigarettes, tobacco products and cigarette
23tubes on hand, and other pertinent papers and documents
24relating to the manufacture, purchase, sale, or disposition of
25cigarettes and tobacco products. All books and records and

 

 

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1other papers and documents that are required by this Act to be
2kept shall be kept in the English language, and shall, at all
3times during the usual business hours of the day, be subject to
4inspection by the Department or its duly authorized agents and
5employees. The Department may adopt rules that establish
6requirements, including record forms and formats, for records
7required to be kept and maintained by taxpayers. For purposes
8of this Section, "records" means all data maintained by the
9taxpayer, including data on paper, microfilm, microfiche or any
10type of machine-sensible data compilation. Those books,
11records, papers and documents shall be preserved for a period
12of at least 3 years after the date of the documents, or the
13date of the entries appearing in the records, unless the
14Department, in writing, authorizes their destruction or
15disposal at an earlier date. At all times during the usual
16business hours of the day any duly authorized agent or employee
17of the Department may enter any place of business of the
18cigarette machine operator, without a search warrant, and
19inspect the premises and the stock or packages of cigarettes,
20tobacco products, cigarette tubes, and the cigarette machines
21therein contained, to determine whether any of the provisions
22of this Act are being violated. If such agent or employee is
23denied free access or is hindered or interfered with in making
24such examination as herein provided, the license of the
25cigarette machine operator at such premises shall be subject to
26revocation by the Department.
 

 

 

09700SB2900sam003- 34 -LRB097 15550 HLH 68891 a

1    Section 80. Subpoenas and witnesses; depositions. The
2Department, or any officer or employee of the Department
3designated in writing by the Director, shall, at its, his, or
4her own instance, or on the written request of any cigarette
5machine operator or other interested party to the proceeding,
6issue subpoenas requiring the attendance of and the giving of
7testimony by witnesses, and subpoenas duces tecum requiring the
8production of books, papers, records or memoranda. All
9subpoenas and subpoenas duces tecum issued under the terms of
10this Act may be served by any person of full age. The fees of
11witnesses for attendance and travel shall be the same as the
12fees of witnesses before the circuit court of this State; such
13fees to be paid when the witness is excused from further
14attendance. When the witness is subpoenaed at the instance of
15the Department or any officer or employee thereof, such fees
16shall be paid in the same manner as other expenses of the
17Department, and when the witness is subpoenaed at the instance
18of any other party to any such proceeding, the cost of service
19of the subpoena or subpoena duces tecum and the fee of the
20witness shall be borne by the party at whose instance the
21witness is summoned. In such case the Department, in its
22discretion, may require a deposit to cover the cost of such
23service and witness fees. A subpoena or subpoena duces tecum so
24issued shall be served in the same manner as a subpoena or
25subpoena duces tecum issued out of a court.

 

 

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1    Any circuit court of this State, upon the application of
2the Department or any officer or employee thereof, or upon the
3application of any other party to the proceeding, may, in its
4discretion, compel the attendance of witnesses, the production
5of books, papers, records or memoranda and the giving of
6testimony before the Department or any officer or employee
7thereof conducting an investigation or holding a hearing
8authorized by this Act, by an attachment for contempt, or
9otherwise, in the same manner as production of evidence may be
10compelled before the court.
11    The Department or any officer or employee thereof, or any
12other party in an investigation or hearing before the
13Department, may cause the depositions of witnesses within the
14State to be taken in the manner prescribed by law for like
15depositions, or depositions for discovery in civil actions in
16courts of this State, and to that end compel the attendance of
17witnesses and the production of books, papers, records or
18memoranda, in the same manner provided herein.
 
19    Section 85. Regulations and rules; notice; hearings. The
20Department may adopt and enforce such reasonable rules and
21regulations relating to the administration and enforcement of
22this Act as may be deemed expedient.
23    Whenever notice is required by this Act, such notice may be
24given by United States certified or registered mail, addressed
25to the person concerned at his last known address, and proof of

 

 

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1such mailing shall be sufficient for the purposes of this Act.
2Notice of any hearing provided for by this Act shall be so
3given not less than 7 days prior to the day fixed for the
4hearing.
5    Hearings provided for in this Act shall be held:
6        (1) in Cook County, if the taxpayer's or licensee's
7    principal place of business is in that county;
8        (2) at the Department's office nearest the taxpayer's
9    or licensee's principal place of business, if the
10    taxpayer's or licensee's principal place of business is in
11    Illinois but outside Cook County; or
12        (3) in Sangamon County, if the taxpayer's or licensee's
13    principal place of business is outside Illinois.
14    The Circuit Court of the County wherein the hearing is held
15has power to review all final administrative decisions of the
16Department in administering this Act. The provisions of the
17Administrative Review Law, and all amendments and
18modifications thereof, and the rules adopted pursuant thereto,
19shall apply to and govern all proceedings for the judicial
20review of final administrative decisions of the Department
21under this Act. The term "administrative decision" is defined
22as in Section 3-101 of the Code of Civil Procedure.
23    Service upon the Director of Revenue or Assistant Director
24of Revenue of summons issued in any action to review a final
25administrative decision shall be service upon the Department.
26The Department shall certify the record of its proceedings if

 

 

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1the cigarette machine operator pays to it the sum of 75¢ per
2page of testimony taken before the Department and 25¢ per page
3of all other matters contained in such record, except that
4these charges may be waived where the Department is satisfied
5that the aggrieved party is an indigent person who cannot
6afford to pay such charges. Before the delivery of such record
7to the person applying for it, payment of these charges must be
8made, and if the record is not paid for within 30 days after
9notice that such record is available, the complaint may be
10dismissed by the court upon motion of the Department.
11    No stay order shall be entered by the Circuit Court unless
12the cigarette machine operator files with the court a bond in
13an amount fixed and approved by the court, to indemnify the
14State against all loss and injury which may be sustained by it
15on account of the review proceedings and to secure all costs
16which may be occasioned by such proceedings.
17    Whenever any proceeding provided by this Act is begun
18before the Department, either by the Department or by a person
19subject to this Act, and such person thereafter dies or becomes
20a person under legal disability before such proceeding is
21concluded, the legal representative of the deceased person or
22of the person under legal disability shall notify the
23Department of such death or legal disability. Such legal
24representative, as such, shall then be substituted by the
25Department for such person. If the legal representative fails
26to notify the Department of his or her appointment as such

 

 

09700SB2900sam003- 38 -LRB097 15550 HLH 68891 a

1legal representative, the Department may, upon its own motion,
2substitute such legal representative in the proceeding pending
3before the Department for the person who died or became a
4person under legal disability.
 
5    Section 90. The Illinois Administrative Procedure Act. The
6Illinois Administrative Procedure Act is hereby expressly
7adopted and shall apply to all administrative rules and
8procedures of the Department of Revenue under this Act, except
9that: (1) paragraph (b) of Section 5-10 of the Illinois
10Administrative Procedure Act does not apply to final orders,
11decisions and opinions of the Department; (2) subparagraph
12(a)(ii) of Section 5-10 of the Illinois Administrative
13Procedure Act does not apply to forms established by the
14Department for use under this Act; and (3) the provisions of
15Section 10-45 of the Illinois Administrative Procedure Act
16regarding proposals for decision are excluded and not
17applicable to the Department under this Act.
 
18    Section 95. Legal proceedings. All legal proceedings under
19this Act, whether civil or criminal, shall be instituted and
20prosecuted by the Attorney General or by the State's Attorney
21for the county in which an offense under this Act is committed,
22and all civil actions may be brought in the name of the
23Department of Revenue.
 

 

 

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1    Section 100. Arrest and seizure. Any duly authorized
2employee of the Department may: arrest without warrant any
3person committing in his presence a violation of any of the
4provisions of this Act; may without a search warrant inspect
5all cigarettes and cigarette machines located in any place of
6business; and may seize any contraband cigarettes and any
7cigarette machines in which such contraband cigarettes may be
8found or may be made, and such packages or cigarette machines
9so seized shall be subject to confiscation and forfeiture as
10provided in Section 105 of this Act.
 
11    Section 105. Hearings regarding seized cigarettes and
12cigarette machines. After seizing any cigarettes or cigarette
13machines, as provided in Section 100 of this Act, the
14Department shall hold a hearing and shall determine whether
15such cigarettes, at the time of their seizure by the
16Department, were contraband cigarettes, or whether such
17cigarette machines, at the time of their seizure by the
18Department, contained or made contraband cigarettes. The
19Department shall give not less than 7 days notice of the time
20and place of such hearing to the owner of such property if he
21is known, and also to the person in whose possession the
22property so taken was found, if such person is known and if
23such person in possession is not the owner of said property. In
24case neither the owner nor the person in possession of such
25property is known, the Department shall cause publication of

 

 

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1the time and place of such hearing to be made at least once in
2each week for 3 weeks successively in a newspaper of general
3circulation in the county where such hearing is to be held.
4    If, as the result of such hearing, the Department
5determines that the cigarettes seized were, at the time of
6seizure, contraband cigarettes, or that any cigarette machine
7at the time of its seizure contained or made contraband
8cigarettes, the Department shall enter an order declaring such
9cigarettes or such cigarette machine confiscated and forfeited
10to the State, and to be held by the Department for disposal as
11provided in this Section. The Department shall give notice of
12such order to the owner of such property if he is known, and
13also to the person in whose possession the property so taken
14was found, if such person is known and if such person in
15possession is not the owner of said property. In case neither
16the owner nor the person in possession of such property is
17known, the Department shall cause publication of such order to
18be made at least once in each week for 3 weeks successively in
19a newspaper of general circulation in the county where such
20hearing was held.
21    When any cigarettes or any cigarette machine shall have
22been declared forfeited to the State by the Department, as
23provided hereunder, and when all proceedings for the judicial
24review of the Department's decision have terminated, the
25Department shall, to the extent that its decision is sustained
26on review, destroy or maintain and use such property in an

 

 

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1undercover capacity.
 
2    Section 110. Filing of a complaint.
3    Whenever any peace officer of the State or any duly
4authorized officer or employee of the Department shall have
5reason to believe that any violation of this Act has occurred
6and that the person so violating the Act has in that person's
7possession contraband cigarettes, or any cigarette machine
8containing or making contraband cigarettes, he or she may file
9or cause to be filed his complaint in writing, verified by
10affidavit, with any court within whose jurisdiction the
11premises to be searched are situated, stating the facts upon
12which such belief is founded, the premises to be searched, and
13the property to be seized, and procure a search warrant and
14execute the same. Upon the execution of such search warrant,
15the peace officer, or officer or employee of the Department,
16executing such search warrant shall make due return thereof to
17the court issuing the same, together with an inventory of the
18property taken thereunder. The court shall thereupon issue
19process against the owner of such property if he is known;
20otherwise, such process shall be issued against the person in
21whose possession the property so taken is found, if such person
22is known. In case of inability to serve such process upon the
23owner or the person in possession of the property at the time
24of its seizure, notice of the proceedings before the court
25shall be given as required by the statutes of the State

 

 

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1governing cases of Attachment. Upon the return of the process
2duly served or upon the posting or publishing of notice made,
3as herein provided, the court or jury, if a jury shall be
4demanded, shall proceed to determine whether or not such
5property so seized was held or possessed in violation of this
6Act, or whether, if a cigarette machine has been so seized, it
7contained or was making at the time of its seizure contraband
8cigarettes. In case of a finding that any cigarette machine so
9seized contained or was making at the time of its seizure
10contraband cigarettes, judgment shall be entered confiscating
11and forfeiting the property to the State and ordering its
12delivery to the Department, and, in addition thereto, the court
13shall have power to tax and assess the costs of the
14proceedings.
15    When any cigarettes or any cigarette machine is declared
16forfeited to the State by any court, and when such confiscated
17and forfeited property is delivered to the Department as
18provided in this Act, the Department shall destroy or maintain
19and use such property in an undercover capacity.
 
20    Section 115. False or fraudulent reports. Any person
21required by this Act to make, file, render, sign, or verify any
22report or return, or any officer, agent, or employee of that
23person, who makes any false or fraudulent report or return or
24files any false or fraudulent report or return, or who fails to
25make such report or return or file such report or return when

 

 

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1due, is guilty of a Class 4 felony.
 
2    Section 120. Possession of more than 200 contraband
3cigarettes; penalty. Any person possessing more than 200
4contraband cigarettes is liable to pay, to the Department, for
5deposit into the Tax Compliance and Administration Fund, a
6penalty of $1 for each such cigarette in excess of 200, unless
7reasonable cause can be established by the person upon whom the
8penalty is imposed. This penalty is in addition to the taxes
9imposed by this Act. Reasonable cause shall be determined in
10each situation in accordance with rules adopted by the
11Department. The provisions of the Uniform Penalty and Interest
12Act do not apply to this Section.
 
13    Section 125. Possession of not less than 20 and not more
14than 200 contraband cigarettes; penalty. Any person possessing
15not less than 20 and not more than 200 contraband cigarettes is
16liable to pay to the Department, for deposit into the Tax
17Compliance and Administration Fund, a penalty of $0.50 for each
18such cigarette, unless reasonable cause can be established by
19the person upon whom the penalty is imposed. Reasonable cause
20shall be determined in each situation in accordance with rules
21adopted by the Department. The provisions of the Uniform
22Penalty and Interest Act do not apply to this Section.
 
23    Section 130. Punishment for sale or possession of

 

 

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1contraband cigarettes.
2    (a) Possession or sale of 200 or less contraband
3cigarettes. Any person who has in his or her possession or
4sells 200 or less contraband cigarettes is guilty of a Class A
5misdemeanor.
6    (b) Possession or sale of more than 200 and not more 1000
7contraband cigarettes. Any person who has in his or her
8possession or sells more than 200 and not more than 1000
9contraband cigarettes is guilty of a Class A misdemeanor for a
10first offense and a Class 4 felony for each subsequent offense.
11    (c) Possession or sale of more than 1000 contraband
12cigarettes. Any person who has in his or her possession or
13sells more than 1000 contraband cigarettes is guilty of a Class
144 felony.
 
15    Section 135. Unlawful operation of cigarette machines.
16Whoever operates a cigarette machine without a license is
17guilty of a Class 4 felony. Notwithstanding this Section, and
18any other provisions of this Act, an individual may own a
19cigarette machine for that individual's own use, and not for
20the purpose of resale of cigarettes.
 
21    Section 140. Failure to keep records; penalty. Any person
22required by this Act to keep records of any kind, who fails to
23keep the required records or falsifies those records, is guilty
24of a Class 4 felony.
 

 

 

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1    Section 145. Failure to preserve records; penalty. Any
2person who fails to safely preserve the records required by
3Section 75 of this Act for the period of 3 years, as required
4by that Section, in such manner as to insure permanency and
5accessibility for inspection by the Department, shall be guilty
6of a business offense and may be fined up to $5,000.
 
7    Section 150. Forfeit of bond. If a cigarette machine
8operator is convicted of the violation of any of the provisions
9of this Act, or if his or her license is revoked and no review
10is had of the order or revocation, or if on review thereof the
11decision is adverse to the cigarette machine operator, or if a
12cigarette machine operator fails to pay an assessment as to
13which no judicial review is sought and which has become final,
14or pursuant to which, upon review thereof, the Circuit Court
15has entered a judgment that is in favor of the Department and
16that has become final, the bond filed pursuant to this Act
17shall thereupon be forfeited, and the Department may institute
18a suit upon such bond in its own name for the entire amount of
19such bond and costs. Such suit upon the bond shall be in
20addition to any other remedy provided for herein.
 
21    Section 155. Sunset of exemptions, credits, and
22deductions. The application of every exemption, credit, and
23deduction against tax imposed by this Act that becomes law

 

 

09700SB2900sam003- 46 -LRB097 15550 HLH 68891 a

1after the effective date of this Act shall be limited by a
2reasonable and appropriate sunset date. A taxpayer is not
3entitled to take the exemption, credit, or deduction beginning
4on the sunset date and thereafter. If a reasonable and
5appropriate sunset date is not specified in the Public Act that
6creates the exemption, credit, or deduction, a taxpayer shall
7not be entitled to take the exemption, credit, or deduction
8beginning 5 years after the effective date of the Public Act
9creating the exemption, credit, or deduction and thereafter.
 
10    Section 160. Distribution of receipts by the Department.
11All moneys received by the Department under this Act shall be
12distributed as provided in subsection (a) of Section 2 of the
13Cigarette Tax Act.
 
14    Section 165. Exemption. Persons who are not operating
15cigarette machines as defined in this Act and are engaged in
16the business of renting, leasing or selling cigarette machines
17to persons are exempt from the provisions of this Act.
 
18    Section 170. Notice. Any person who distributes or offers
19for sale or rent a cigarette machine in this State shall
20provide notice to any potential purchaser, lessee, or lessor of
21that cigarette machine or any retail space containing a
22cigarette machine. The notice shall contain information about
23this Act, including: (i) licensure requirements for cigarette

 

 

09700SB2900sam003- 47 -LRB097 15550 HLH 68891 a

1machine operators; (ii) tax collection and remittance duties of
2cigarette machine operators; (iii) any product limitations
3imposed on cigarette machines by this Act; and (iv) packaging
4and labeling requirements.
 
5    Section 180. The Cigarette Tax Act is amended by changing
6Sections 1 and 2 as follows:
 
7    (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
8    Sec. 1. For the purposes of this Act:
9    "Brand Style" means a variety of cigarettes distinguished
10by the tobacco used, tar and nicotine content, flavoring used,
11size of the cigarette, filtration on the cigarette or
12packaging.
13    "Cigarette", means any roll for smoking made wholly or in
14part of tobacco irrespective of size or shape and whether or
15not such tobacco is flavored, adulterated or mixed with any
16other ingredient, and the wrapper or cover of which is made of
17paper or any other substance or material except tobacco.
18    "Contraband cigarettes" means:
19        (a) cigarettes that do not bear a required tax stamp
20    under this Act;
21        (b) cigarettes for which any required federal taxes
22    have not been paid;
23        (c) cigarettes that bear a counterfeit tax stamp;
24        (d) cigarettes that are manufactured, fabricated,

 

 

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1    assembled, processed, packaged, or labeled by any person
2    other than (i) the owner of the trademark rights in the
3    cigarette brand or (ii) a person that is directly or
4    indirectly authorized by such owner;
5        (e) cigarettes imported into the United States, or
6    otherwise distributed, in violation of the federal
7    Imported Cigarette Compliance Act of 2000 (Title IV of
8    Public Law 106-476);
9        (f) cigarettes that have false manufacturing labels;
10        (g) cigarettes identified in Section 3-10(a)(1) of
11    this Act; or
12        (h) cigarettes that are improperly tax stamped,
13    including cigarettes that bear a tax stamp of another state
14    or taxing jurisdiction; or .
15        (i) cigarettes made or fabricated by a person holding a
16    cigarette machine operator license under Section 20 of the
17    Cigarette Machine Operators' Occupation Tax Act in the
18    possession of manufacturers, distributors, secondary
19    distributors, manufacturer representatives or other
20    retailers for the purpose of resale, regardless of whether
21    the tax has been paid on such cigarettes.
22    "Person" means any natural individual, firm, partnership,
23association, joint stock company, joint adventure, public or
24private corporation, however formed, limited liability
25company, or a receiver, executor, administrator, trustee,
26guardian or other representative appointed by order of any

 

 

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1court.
2    "Prior Continuous Compliance Taxpayer" means any person
3who is licensed under this Act and who, having been a licensee
4for a continuous period of 5 years, is determined by the
5Department not to have been either delinquent or deficient in
6the payment of tax liability during that period or otherwise in
7violation of this Act. Also, any taxpayer who has, as verified
8by the Department, continuously complied with the condition of
9his bond or other security under provisions of this Act for a
10period of 5 consecutive years shall be considered to be a
11"Prior continuous compliance taxpayer". In calculating the
12consecutive period of time described herein for qualification
13as a "prior continuous compliance taxpayer", a consecutive
14period of time of qualifying compliance immediately prior to
15the effective date of this amendatory Act of 1987 shall be
16credited to any licensee who became licensed on or before the
17effective date of this amendatory Act of 1987.
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        (1) 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 or other disposition in the course of
8    such business.
9        (2) Any person who makes, manufactures or fabricates
10    cigarettes in this State for sale in this State, except a
11    person who makes, manufactures or fabricates cigarettes as
12    a part of a correctional industries program for sale to
13    residents incarcerated in penal institutions or resident
14    patients of a State-operated mental health facility.
15        (3) Any person who makes, manufactures or fabricates
16    cigarettes outside this State, which cigarettes are placed
17    in original packages contained in sealed transparent
18    wrappers, for delivery or shipment into this State, and who
19    elects to qualify and is accepted by the Department as a
20    distributor under Section 4b of this Act.
21    "Place of business" shall mean and include any place where
22cigarettes are sold or where cigarettes are manufactured,
23stored or kept for the purpose of sale or consumption,
24including any vessel, vehicle, airplane, train or vending
25machine.
26    "Manufacturer representative" means a director, officer,

 

 

09700SB2900sam003- 51 -LRB097 15550 HLH 68891 a

1or employee of a manufacturer who has obtained authority from
2the Department under Section 4f to maintain representatives in
3Illinois that provide or sell original packages of cigarettes
4made, manufactured, or fabricated by the manufacturer to
5retailers in compliance with Section 4f of this Act to promote
6cigarettes made, manufactured, or fabricated by the
7manufacturer.
8    "Business" means any trade, occupation, activity or
9enterprise engaged in for the purpose of selling cigarettes in
10this State.
11    "Retailer" means any person who engages in the making of
12transfers of the ownership of, or title to, cigarettes to a
13purchaser for use or consumption and not for resale in any
14form, for a valuable consideration. "Retailer" does not include
15a person:
16        (1) who transfers to residents incarcerated in penal
17    institutions or resident patients of a State-operated
18    mental health facility ownership of cigarettes made,
19    manufactured, or fabricated as part of a correctional
20    industries program; or
21        (2) who transfers cigarettes to a not-for-profit
22    research institution that conducts tests concerning the
23    health effects of tobacco products and who does not offer
24    the cigarettes for resale.
25    "Retailer" shall be construed to include any person who
26engages in the making of transfers of the ownership of, or

 

 

09700SB2900sam003- 52 -LRB097 15550 HLH 68891 a

1title to, cigarettes to a purchaser, for use or consumption by
2any other person to whom such purchaser may transfer the
3cigarettes without a valuable consideration, except a person
4who transfers to residents incarcerated in penal institutions
5or resident patients of a State-operated mental health facility
6ownership of cigarettes made, manufactured or fabricated as
7part of a correctional industries program.
8    "Secondary distributor" means any person engaged in the
9business of selling cigarettes who purchases stamped original
10packages of cigarettes from a licensed distributor under this
11Act or the Cigarette Use Tax Act, sells 75% or more of those
12cigarettes to retailers for resale, and maintains an
13established business where a substantial stock of cigarettes is
14available to retailers for resale.
15    "Stamp" or "stamps" mean the indicia required to be affixed
16on a pack of cigarettes that evidence payment of the tax on
17cigarettes under Section 2 of this Act.
18    "Related party" means any person that is associated with
19any other person because he or she:
20        (a) is an officer or director of a business; or
21        (b) is legally recognized as a partner in business.
22(Source: P.A. 96-782, eff. 1-1-10; 96-1027, eff. 7-12-10;
2397-587, eff. 8-26-11.)
 
24    (35 ILCS 130/2)  (from Ch. 120, par. 453.2)
25    Sec. 2. Tax imposed; rate; collection, payment, and

 

 

09700SB2900sam003- 53 -LRB097 15550 HLH 68891 a

1distribution; discount.
2    (a) A tax is imposed upon any person engaged in business as
3a retailer of cigarettes in this State at the rate of 5 1/2
4mills per cigarette sold, or otherwise disposed of in the
5course of such business in this State. In addition to any other
6tax imposed by this Act, a tax is imposed upon any person
7engaged in business as a retailer of cigarettes in this State
8at a rate of 1/2 mill per cigarette sold or otherwise disposed
9of in the course of such business in this State on and after
10January 1, 1947, and shall be paid into the Metropolitan Fair
11and Exposition Authority Reconstruction Fund or as otherwise
12provided in Section 29. On and after December 1, 1985, in
13addition to any other tax imposed by this Act, a tax is imposed
14upon any person engaged in business as a retailer of cigarettes
15in this State at a rate of 4 mills per cigarette sold or
16otherwise disposed of in the course of such business in this
17State. Of the additional tax imposed by this amendatory Act of
181985, $9,000,000 of the moneys received by the Department of
19Revenue pursuant to this Act shall be paid each month into the
20Common School Fund. On and after the effective date of this
21amendatory Act of 1989, in addition to any other tax imposed by
22this Act, a tax is imposed upon any person engaged in business
23as a retailer of cigarettes at the rate of 5 mills per
24cigarette sold or otherwise disposed of in the course of such
25business in this State. On and after the effective date of this
26amendatory Act of 1993, in addition to any other tax imposed by

 

 

09700SB2900sam003- 54 -LRB097 15550 HLH 68891 a

1this Act, a tax is imposed upon any person engaged in business
2as a retailer of cigarettes at the rate of 7 mills per
3cigarette sold or otherwise disposed of in the course of such
4business in this State. On and after December 15, 1997, in
5addition to any other tax imposed by this Act, a tax is imposed
6upon any person engaged in business as a retailer of cigarettes
7at the rate of 7 mills per cigarette sold or otherwise disposed
8of in the course of such business of this State. All of the
9moneys received by the Department of Revenue pursuant to this
10Act and the Cigarette Use Tax Act from the additional taxes
11imposed by this amendatory Act of 1997, shall be paid each
12month into the Common School Fund. On and after July 1, 2002,
13in addition to any other tax imposed by this Act, a tax is
14imposed upon any person engaged in business as a retailer of
15cigarettes at the rate of 20.0 mills per cigarette sold or
16otherwise disposed of in the course of such business in this
17State. The payment of such taxes shall be evidenced by a stamp
18affixed to each original package of cigarettes, or an
19authorized substitute for such stamp imprinted on each original
20package of such cigarettes underneath the sealed transparent
21outside wrapper of such original package, as hereinafter
22provided. However, such taxes are not imposed upon any activity
23in such business in interstate commerce or otherwise, which
24activity may not under the Constitution and statutes of the
25United States be made the subject of taxation by this State.
26    Beginning on the effective date of this amendatory Act of

 

 

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1the 92nd General Assembly and through June 30, 2006, all of the
2moneys received by the Department of Revenue pursuant to this
3Act and the Cigarette Use Tax Act, other than the moneys that
4are dedicated to the Common School Fund, shall be distributed
5each month as follows: first, there shall be paid into the
6General Revenue Fund an amount which, when added to the amount
7paid into the Common School Fund for that month, equals
8$33,300,000, except that in the month of August of 2004, this
9amount shall equal $83,300,000; then, from the moneys
10remaining, if any amounts required to be paid into the General
11Revenue Fund in previous months remain unpaid, those amounts
12shall be paid into the General Revenue Fund; then, beginning on
13April 1, 2003, from the moneys remaining, $5,000,000 per month
14shall be paid into the School Infrastructure Fund; then, if any
15amounts required to be paid into the School Infrastructure Fund
16in previous months remain unpaid, those amounts shall be paid
17into the School Infrastructure Fund; then the moneys remaining,
18if any, shall be paid into the Long-Term Care Provider Fund. To
19the extent that more than $25,000,000 has been paid into the
20General Revenue Fund and Common School Fund per month for the
21period of July 1, 1993 through the effective date of this
22amendatory Act of 1994 from combined receipts of the Cigarette
23Tax Act and the Cigarette Use Tax Act, notwithstanding the
24distribution provided in this Section, the Department of
25Revenue is hereby directed to adjust the distribution provided
26in this Section to increase the next monthly payments to the

 

 

09700SB2900sam003- 56 -LRB097 15550 HLH 68891 a

1Long Term Care Provider Fund by the amount paid to the General
2Revenue Fund and Common School Fund in excess of $25,000,000
3per month and to decrease the next monthly payments to the
4General Revenue Fund and Common School Fund by that same excess
5amount.
6    Beginning on July 1, 2006, all of the moneys received by
7the Department of Revenue pursuant to this Act, and the
8Cigarette Use Tax Act, and the Cigarette Machine Operators'
9Occupation Tax Act, other than the moneys that are dedicated to
10the Common School Fund, shall be distributed each month as
11follows: first, there shall be paid into the General Revenue
12Fund an amount that, when added to the amount paid into the
13Common School Fund for that month, equals $29,200,000; then,
14from the moneys remaining, if any amounts required to be paid
15into the General Revenue Fund in previous months remain unpaid,
16those amounts shall be paid into the General Revenue Fund; then
17from the moneys remaining, $5,000,000 per month shall be paid
18into the School Infrastructure Fund; then, if any amounts
19required to be paid into the School Infrastructure Fund in
20previous months remain unpaid, those amounts shall be paid into
21the School Infrastructure Fund; then the moneys remaining, if
22any, shall be paid into the Long-Term Care Provider Fund.
23    When any tax imposed herein terminates or has terminated,
24distributors who have bought stamps while such tax was in
25effect and who therefore paid such tax, but who can show, to
26the Department's satisfaction, that they sold the cigarettes to

 

 

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1which they affixed such stamps after such tax had terminated
2and did not recover the tax or its equivalent from purchasers,
3shall be allowed by the Department to take credit for such
4absorbed tax against subsequent tax stamp purchases from the
5Department by such distributor.
6    The impact of the tax levied by this Act is imposed upon
7the retailer and shall be prepaid or pre-collected by the
8distributor for the purpose of convenience and facility only,
9and the amount of the tax shall be added to the price of the
10cigarettes sold by such distributor. Collection of the tax
11shall be evidenced by a stamp or stamps affixed to each
12original package of cigarettes, as hereinafter provided.
13    Each distributor shall collect the tax from the retailer at
14or before the time of the sale, shall affix the stamps as
15hereinafter required, and shall remit the tax collected from
16retailers to the Department, as hereinafter provided. Any
17distributor who fails to properly collect and pay the tax
18imposed by this Act shall be liable for the tax. Any
19distributor having cigarettes to which stamps have been affixed
20in his possession for sale on the effective date of this
21amendatory Act of 1989 shall not be required to pay the
22additional tax imposed by this amendatory Act of 1989 on such
23stamped cigarettes. Any distributor having cigarettes to which
24stamps have been affixed in his or her possession for sale at
2512:01 a.m. on the effective date of this amendatory Act of
261993, is required to pay the additional tax imposed by this

 

 

09700SB2900sam003- 58 -LRB097 15550 HLH 68891 a

1amendatory Act of 1993 on such stamped cigarettes. This
2payment, less the discount provided in subsection (b), shall be
3due when the distributor first makes a purchase of cigarette
4tax stamps after the effective date of this amendatory Act of
51993, or on the first due date of a return under this Act after
6the effective date of this amendatory Act of 1993, whichever
7occurs first. Any distributor having cigarettes to which stamps
8have been affixed in his possession for sale on December 15,
91997 shall not be required to pay the additional tax imposed by
10this amendatory Act of 1997 on such stamped cigarettes.
11    Any distributor having cigarettes to which stamps have been
12affixed in his or her possession for sale on July 1, 2002 shall
13not be required to pay the additional tax imposed by this
14amendatory Act of the 92nd General Assembly on those stamped
15cigarettes.
16    Distributors making sales of cigarettes to secondary
17distributors shall add the amount of the tax to the price of
18the cigarettes sold by the distributors. Secondary
19distributors making sales of cigarettes to retailers shall
20include the amount of the tax in the price of the cigarettes
21sold to retailers. The amount of tax shall not be less than the
22amount of taxes imposed by the State and all local
23jurisdictions. The amount of local taxes shall be calculated
24based on the location of the retailer's place of business shown
25on the retailer's certificate of registration or
26sub-registration issued to the retailer pursuant to Section 2a

 

 

09700SB2900sam003- 59 -LRB097 15550 HLH 68891 a

1of the Retailers' Occupation Tax Act. The original packages of
2cigarettes sold to the retailer shall bear all the required
3stamps, or other indicia, for the taxes included in the price
4of cigarettes.
5    The amount of the Cigarette Tax imposed by this Act shall
6be separately stated, apart from the price of the goods, by
7distributors, manufacturer representatives, secondary
8distributors, and retailers, in all bills and sales invoices.
9    (b) The distributor shall be required to collect the taxes
10provided under paragraph (a) hereof, and, to cover the costs of
11such collection, shall be allowed a discount during any year
12commencing July 1st and ending the following June 30th in
13accordance with the schedule set out hereinbelow, which
14discount shall be allowed at the time of purchase of the stamps
15when purchase is required by this Act, or at the time when the
16tax is remitted to the Department without the purchase of
17stamps from the Department when that method of paying the tax
18is required or authorized by this Act. Prior to December 1,
191985, a discount equal to 1 2/3% of the amount of the tax up to
20and including the first $700,000 paid hereunder by such
21distributor to the Department during any such year; 1 1/3% of
22the next $700,000 of tax or any part thereof, paid hereunder by
23such distributor to the Department during any such year; 1% of
24the next $700,000 of tax, or any part thereof, paid hereunder
25by such distributor to the Department during any such year, and
262/3 of 1% of the amount of any additional tax paid hereunder by

 

 

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1such distributor to the Department during any such year shall
2apply. On and after December 1, 1985, a discount equal to 1.75%
3of the amount of the tax payable under this Act up to and
4including the first $3,000,000 paid hereunder by such
5distributor to the Department during any such year and 1.5% of
6the amount of any additional tax paid hereunder by such
7distributor to the Department during any such year shall apply.
8    Two or more distributors that use a common means of
9affixing revenue tax stamps or that are owned or controlled by
10the same interests shall be treated as a single distributor for
11the purpose of computing the discount.
12    (c) The taxes herein imposed are in addition to all other
13occupation or privilege taxes imposed by the State of Illinois,
14or by any political subdivision thereof, or by any municipal
15corporation.
16(Source: P.A. 96-1027, eff. 7-12-10; 97-587, eff. 8-26-11.)
 
17    Section 185. The Cigarette Fire Safety Standard Act is
18amended by adding Section 65 as follows:
 
19    (425 ILCS 8/65 new)
20    Sec. 65. Cigarette Machine Operators. Cigarettes made or
21fabricated by cigarette machine operators possessing valid
22licenses under Section 20 of the Cigarette Machine Operators'
23Occupation Tax are exempt from the provisions of this Act.
 

 

 

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1    Section 999. Effective date. This Act takes effect January
21, 2013.".