Public Act 103-1001
SB3452 EnrolledLRB103 37528 HLH 67651 b SB3452 Enrolled LRB103 37528 HLH 67651 b
SB3452 Enrolled LRB103 37528 HLH 67651 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Cigarette Tax Act is amended by changing
Section 18a as follows:
(35 ILCS 130/18a) (from Ch. 120, par. 453.18a)
Sec. 18a. After seizing any original packages of
cigarettes, or cigarette vending devices, as provided in
Section 18 of this Act, the Department shall hold a hearing and
shall determine whether such original packages of cigarettes,
at the time of their seizure by the Department, were
contraband cigarettes, or whether such cigarette vending
devices, at the time of their seizure by the Department,
contained original packages of contraband cigarettes. The
Department is not required to hold such a hearing if a waiver
and consent to forfeiture has been executed by the owner of the
property, if the owner is known, and by the person in whose
possession the property so taken was found, if that person is
known and if that person is not the owner of the property. The
Department shall give not less than 7 days' notice of the time
and place of such hearing to the owner of such property if the
owner he is known, and also to the person in whose possession
the property so taken was found, if such person is known and if
SB3452 Enrolled LRB103 37528 HLH 67651 b
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
the time and place of such hearing to be made at least once in
each week for 3 weeks successively in a newspaper of general
circulation in the county where such hearing is to be held.
If, as the result of such hearing, the Department shall
determine that the original packages of cigarettes seized were
at the time of seizure contraband cigarettes, or that any
cigarette vending device at the time of its seizure contained
original packages of contraband cigarettes, or upon receipt of
a properly executed waiver and consent to forfeiture as
provided in this Section, the Department shall enter an order
declaring such original packages of cigarettes or such
cigarette vending devices confiscated and forfeited to the
State, and to be held by the Department for disposal by it as
provided in Section 21 of this Act. The Department shall give
notice of such order to the owner of such property if the owner
he is known, and also to the person in whose possession the
property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
such order to be made at least once in each week for 3 weeks
successively in a newspaper of general circulation in the
county where such hearing was held.
(Source: P.A. 96-782, eff. 1-1-10.)
Section 10. The Cigarette Use Tax Act is amended by
changing Section 25 as follows:
(35 ILCS 135/25) (from Ch. 120, par. 453.55)
Sec. 25. After seizing any original packages of
cigarettes, or cigarette vending devices, as provided in
Section 24 of this Act, the Department shall hold a hearing and
shall determine whether such original packages of cigarettes,
at the time of their seizure by the Department, were
contraband cigarettes or whether such cigarette vending
devices, at the time of their seizure by the Department,
contained original packages of contraband cigarettes. The
Department is not required to hold such a hearing if a waiver
and consent to forfeiture has been executed by the owner of the
property, if the owner is known, and by the person in whose
possession the property so taken was found, if that person is
known and if that person is not the owner of the property. The
Department shall give not less than 7 days' notice of the time
and place of such hearing to the owner of such property if the
owner he is known, and also to the person in whose possession
the property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
the time and place of such hearing to be made at least once in
each week for 3 weeks successively in a newspaper of general
circulation in the county where such hearing is to be held.
If, as the result of such hearing, the Department shall
determine that the original packages of cigarettes seized were
at the time of seizure contraband cigarettes, or that any
cigarette vending device at the time of its seizure contained
original packages of contraband cigarettes, or upon receipt of
a properly executed waiver and consent to forfeiture as
provided in this Section, the Department shall enter an order
declaring such original packages of cigarettes or such
cigarette vending devices confiscated and forfeited to the
State, and to be held by the Department for disposal by it as
provided in Section 27 of this Act. The Department shall give
notice of such order to the owner of such property if the owner
he is known, and also to the person in whose possession the
property so taken was found, if such person is known and if
such person in possession is not the owner of said property. In
case neither the owner nor the person in possession of such
property is known, the Department shall cause publication of
such order to be made at least once in each week for 3 weeks
successively in a newspaper of general circulation in the
county where such hearing was held.
(Source: P.A. 96-782, eff. 1-1-10.)
Section 15. The Tobacco Products Tax Act of 1995 is
amended by changing Section 10-5, 10-20, and 10-56 as follows:
(35 ILCS 143/10-5)
Sec. 10-5. Definitions. For purposes of this Act:
"Business" means any trade, occupation, activity, or
enterprise engaged in, at any location whatsoever, for the
purpose of selling tobacco products.
"Cigarette" has the meaning ascribed to the term in
Section 1 of the Cigarette Tax Act.
"Contraband little cigar" means:
(1) packages of little cigars containing 20 or 25
little cigars that do not bear a required tax stamp under
this Act;
(2) packages of little cigars containing 20 or 25
little cigars that bear a fraudulent, imitation, or
counterfeit tax stamp;
(3) packages of little cigars containing 20 or 25
little cigars that are improperly tax stamped, including
packages of little cigars that bear only a tax stamp of
another state or taxing jurisdiction; or
(4) packages of little cigars containing other than 20
or 25 little cigars in the possession of a distributor,
retailer or wholesaler, unless the distributor, retailer,
or wholesaler possesses, or produces within the time frame
provided in Section 10-27 or 10-28 of this Act, an invoice
from a stamping distributor, distributor, or wholesaler
showing that the tax on the packages has been or will be
paid.
"Correctional Industries program" means a program run by a
State penal institution in which residents of the penal
institution produce tobacco products for sale to persons
incarcerated in penal institutions or resident patients of a
State operated mental health facility.
"Department" means the Illinois Department of Revenue.
"Distributor" means any of the following:
(1) Any manufacturer or wholesaler in this State
engaged in the business of selling tobacco products who
sells, exchanges, or distributes tobacco products to
retailers or consumers in this State.
(2) Any manufacturer or wholesaler engaged in the
business of selling tobacco products from without this
State who sells, exchanges, distributes, ships, or
transports tobacco products to retailers or consumers
located in this State, so long as that manufacturer or
wholesaler has or maintains within this State, directly or
by subsidiary, an office, sales house, or other place of
business, or any agent or other representative operating
within this State under the authority of the person or
subsidiary, irrespective of whether the place of business
or agent or other representative is located here
permanently or temporarily.
(3) Any retailer who receives tobacco products on
which the tax has not been or will not be paid by another
distributor.
"Distributor" does not include any person, wherever
resident or located, who makes, manufactures, or fabricates
tobacco products as part of a Correctional Industries program
for sale to residents incarcerated in penal institutions or
resident patients of a State operated mental health facility.
"Electronic cigarette" means:
(1) any device that employs a battery or other
mechanism to heat a solution or substance to produce a
vapor or aerosol intended for inhalation, except for (A)
any device designed solely for use with cannabis that
contains a statement on the retail packaging that the
device is designed solely for use with cannabis and not
for use with tobacco or (B) any device that contains a
solution or substance that contains cannabis subject to
tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act;
(2) any cartridge or container of a solution or
substance intended to be used with or in the device or to
refill the device, except for any cartridge or container
of a solution or substance that contains cannabis subject
to tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act; or
(3) any solution or substance, whether or not it
contains nicotine, intended for use in the device, except
for any solution or substance that contains cannabis
subject to tax under the Compassionate Use of Medical
Cannabis Program Act or the Cannabis Regulation and Tax
Act.
The changes made to the definition of "electronic
cigarette" by this amendatory Act of the 102nd General
Assembly apply on and after June 28, 2019, but no claim for
credit or refund is allowed on or after the effective date of
this amendatory Act of the 102nd General Assembly for such
taxes paid during the period beginning June 28, 2019 and the
effective date of this amendatory Act of the 102nd General
Assembly.
"Electronic cigarette" includes, but is not limited to,
any electronic nicotine delivery system, electronic cigar,
electronic cigarillo, electronic pipe, electronic hookah, vape
pen, or similar product or device, and any component or part
that can be used to build the product or device. "Electronic
cigarette" does not include: cigarettes, as defined in Section
1 of the Cigarette Tax Act; any product approved by the United
States Food and Drug Administration for sale as a tobacco
cessation product, a tobacco dependence product, or for other
medical purposes that is marketed and sold solely for that
approved purpose; any asthma inhaler prescribed by a physician
for that condition that is marketed and sold solely for that
approved purpose; or any therapeutic product approved for use
under the Compassionate Use of Medical Cannabis Program Act.
"Little cigar" means and includes any roll, made wholly or
in part of tobacco, where such roll has an integrated
cellulose acetate filter and weighs less than 4 pounds per
thousand and the wrapper or cover of which is made in whole or
in part of tobacco.
"Manufacturer" means any person, wherever resident or
located, who manufactures and sells tobacco products, except a
person who makes, manufactures, or fabricates tobacco products
as a part of a Correctional Industries program for sale to
persons incarcerated in penal institutions or resident
patients of a State operated mental health facility.
Beginning on January 1, 2013, "moist snuff" means any
finely cut, ground, or powdered tobacco that is not intended
to be smoked, but shall not include any finely cut, ground, or
powdered tobacco that is intended to be placed in the nasal
cavity.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, limited
liability company, or public or private corporation, however
formed, or a receiver, executor, administrator, trustee,
conservator, or other representative appointed by order of any
court.
"Place of business" means and includes any place where
tobacco products are sold or where tobacco products are
manufactured, stored, or kept for the purpose of sale or
consumption, including any vessel, vehicle, airplane, train,
or vending machine.
"Prior continuous compliance taxpayer" means any person
who is licensed under this Act and who, having been a licensee
for a continuous period of 2 years, is determined by the
Department not to have been either delinquent or deficient in
the payment of tax liability during that period or otherwise
in violation of this Act. "Prior continuous compliance
taxpayer" also means any taxpayer who has, as verified by the
Department, continuously complied with the condition of his
bond or other security under provisions of this Act for a
period of 2 consecutive years. In calculating the consecutive
period of time described in this definition for qualification
as a prior continuous compliance taxpayer, a consecutive
period of time of qualifying compliance immediately prior to
the effective date of this amendatory Act of the 103rd General
Assembly shall be credited to any licensee who became licensed
on or before the effective date of this amendatory Act of the
103rd General Assembly. A distributor that is a prior
continuous compliance taxpayer and becomes a successor to a
distributor as the result of an acquisition, merger, or
consolidation of that distributor shall be deemed to be a
prior continuous compliance taxpayer with respect to the
acquired, merged, or consolidated entity.
"Retailer" means any person in this State engaged in the
business of selling tobacco products to consumers in this
State, regardless of quantity or number of sales.
"Sale" means any transfer, exchange, or barter in any
manner or by any means whatsoever for a consideration and
includes all sales made by persons.
"Stamp" or "stamps" mean the indicia required to be
affixed on a package of little cigars that evidence payment of
the tax on packages of little cigars containing 20 or 25 little
cigars under Section 10-10 of this Act. These stamps shall be
the same stamps used for cigarettes under the Cigarette Tax
Act.
"Stamping distributor" means a distributor licensed under
this Act and also licensed as a distributor under the
Cigarette Tax Act or Cigarette Use Tax Act.
"Tobacco products" means any cigars, including little
cigars; cheroots; stogies; periques; granulated, plug cut,
crimp cut, ready rubbed, and other smoking tobacco; snuff
(including moist snuff) or snuff flour; cavendish; plug and
twist tobacco; fine-cut and other chewing tobaccos; shorts;
refuse scraps, clippings, cuttings, and sweeping of tobacco;
and other kinds and forms of tobacco, prepared in such manner
as to be suitable for chewing or smoking in a pipe or
otherwise, or both for chewing and smoking; but does not
include cigarettes as defined in Section 1 of the Cigarette
Tax Act or tobacco purchased for the manufacture of cigarettes
by cigarette distributors and manufacturers defined in the
Cigarette Tax Act and persons who make, manufacture, or
fabricate cigarettes as a part of a Correctional Industries
program for sale to residents incarcerated in penal
institutions or resident patients of a State operated mental
health facility.
Beginning on July 1, 2019, "tobacco products" also
includes electronic cigarettes.
"Wholesale price" means the established list price for
which a manufacturer sells tobacco products to a distributor,
before the allowance of any discount, trade allowance, rebate,
or other reduction. In the absence of such an established list
price, the manufacturer's invoice price at which the
manufacturer sells the tobacco product to unaffiliated
distributors, before any discounts, trade allowances, rebates,
or other reductions, shall be presumed to be the wholesale
price.
"Wholesaler" means any person, wherever resident or
located, engaged in the business of selling tobacco products
to others for the purpose of resale. "Wholesaler", when used
in this Act, does not include a person licensed as a
distributor under Section 10-20 of this Act unless expressly
stated in this Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19;
102-40, eff. 6-25-21.)
(35 ILCS 143/10-20)
Sec. 10-20. Distributor's licenses. It shall be unlawful
for any person to engage in business as a distributor of
tobacco products within the meaning of this Act without first
having obtained a license to do so from the Department.
Application for that license shall be made to the Department
in a form prescribed and furnished by the Department. Each
applicant for a license shall furnish to the Department on a
form, signed and verified by the applicant, the following
information:
(1) The name of the applicant.
(2) The address of the location at which the applicant
proposes to engage in business as a distributor of tobacco
products.
(3) Other information the Department may reasonably
require.
Each distributor, except for a distributor who is applying
for a distributor's license under this Act for the first time
or a distributor who, in the preceding year, had less than
$50,000 of tax liability, shall also file with the Department
a bond in an amount not to exceed (i) 3 times the amount of the
distributor's average monthly tax liability or (ii) $50,000,
whichever amount is lower, on a form to be approved by the
Department. Except as otherwise provided in this Section, every
applicant who is required to procure a distributor's license
shall file with his or her application a joint and several
bond. The bond shall be executed to the Department of Revenue,
with good and sufficient surety or sureties residing or
licensed to do business within the State of Illinois,
conditioned upon the true and faithful compliance by the
licensee with all of the provisions of this Act. The
Department shall fix the amount of the bond for each
applicant, taking into consideration the amount of money
expected to become due from the applicant under this Act. The
amount of bond required by the Department shall be an amount
that, in its opinion, will protect the State of Illinois
against failure to pay the amount that may become due from the
applicant under this Act, but the amount of the security
required by the Department shall not exceed 3 times the amount
of the applicant's average monthly tax liability, or $50,000,
whichever amount is lower. Except as otherwise provided in
this Section, the The bond, a reissue, or a substitute shall be
kept in full force and effect during the entire period covered
by the license. A separate application for license shall be
made, and bond filed, for each place of business at which a
person who is required to procure a distributor's license
proposes to engage in business as a distributor under this
Act.
The Department, upon receipt of an application and bond in
proper form, shall issue to the applicant a license, in a form
prescribed by the Department, which shall permit the applicant
to whom it is issued to engage in business as a distributor at
the place shown on his or her application. The license shall be
issued by the Department without charge or cost to the
applicant. No license issued under this Act is transferable or
assignable. The license shall be conspicuously displayed in
the place of business conducted by the licensee under the
license.
The bonding requirement in this Section does not apply to
an applicant for a distributor's license who is already bonded
under the Cigarette Tax Act or the Cigarette Use Tax Act.
Licenses issued by the Department under this Act shall be
valid for a period not to exceed one year after issuance unless
sooner revoked, canceled, or suspended as provided in this
Act.
No license shall be issued to any person who is in default
to the State of Illinois for moneys due under this Act or any
other tax Act administered by the Department.
The Department shall discharge any surety and shall
release and return any bond provided to it by a taxpayer under
this Section within 90 days after:
(1) the taxpayer becomes a prior continuous compliance
taxpayer; or
(2) the taxpayer has ceased to collect receipts on
which the taxpayer is required to remit the tax under this
Act to the Department, has filed a final tax return, and
has paid to the Department an amount sufficient to
discharge his remaining tax liability as determined by the
Department under this Act.
For the purposes of item (2), the Department shall make a
final determination of the taxpayer's outstanding tax
liability as expeditiously as possible after the taxpayer's
final tax return under this Act has been filed. If the
Department will be unable to make such a final determination
within 45 days after receiving the taxpayer's final tax
return, then the Department shall notify the taxpayer within
that 45-day period stating the reasons why it is unable to make
the final determination within that 45-day period.
The Department may, in its discretion, upon application,
authorize the payment of the tax imposed under Section 10-10
by any distributor or manufacturer not otherwise subject to
the tax imposed under this Act who, to the satisfaction of the
Department, furnishes adequate security to ensure payment of
the tax. The distributor or manufacturer shall be issued,
without charge, a license to remit the tax. When so
authorized, it shall be the duty of the distributor or
manufacturer to remit the tax imposed upon the wholesale price
of tobacco products sold or otherwise disposed of to retailers
or consumers located in this State, in the same manner and
subject to the same requirements as any other distributor or
manufacturer licensed under this Act.
The Department may revoke, suspend, or cancel the license
of a distributor of roll-your-own tobacco (as that term is
used in Section 10 of the Tobacco Product Manufacturers'
Escrow Act) under this Act if the tobacco product
manufacturer, as defined in Section 10 of the Tobacco Product
Manufacturers' Escrow Act, that made or sold the roll-your-own
tobacco has failed to become a participating manufacturer, as
defined in subdivision (a)(1) of Section 15 of the Tobacco
Product Manufacturers' Escrow Act, or has failed to create a
qualified escrow fund for any roll-your-own tobacco
manufactured by the tobacco product manufacturer and sold in
this State or otherwise failed to bring itself into compliance
with subdivision (a)(2) of Section 15 of the Tobacco Product
Manufacturers' Escrow Act.
Any applicant applying for a distributor's license after
the applicant's distributor's license has been revoked by the
Department shall also file a bond with the Department in an
amount equal to 3 times the amount of the applicant's average
monthly tax liability under this Act, as that average monthly
tax liability was calculated immediately prior to the
revocation of the applicant's distributor's license.
Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of that
decision, protest and request a hearing, whereupon the
Department must give notice to that person of the time and
place fixed for the hearing and must hold a hearing in
conformity with the provisions of this Act and then issue its
final administrative decision in the matter to that person. In
the absence of such a protest within 20 days, the Department's
decision becomes final without any further determination being
made or notice given.
(Source: P.A. 98-1055, eff. 1-1-16.)
(35 ILCS 143/10-56)
Sec. 10-56. Seizure and forfeiture. After seizing any
tobacco products or vending devices, as provided in Section
10-55, the Department must hold a hearing and determine
whether the distributor or retailer was properly licensed to
sell the tobacco products at the time of their seizure by the
Department. The Department is not required to hold such a
hearing if a waiver and consent to forfeiture has been
executed by the owner of the property, if the owner is known,
and by the person in whose possession the property so taken was
found, if that person is known and if that person is not the
owner of the property. The Department shall give not less than
20 days' notice of the time and place of the hearing to the
owner of the property, if the owner is known, and also to the
person in whose possession the property was found, if that
person is known and if the person in possession is not the
owner of the property. If neither the owner nor the person in
possession of the property is known, the Department must cause
publication of the time and place of the hearing to be made at
least once in each week for 3 weeks successively in a newspaper
of general circulation in the county where the hearing is to be
held.
If, as the result of the hearing, the Department
determines that the distributor or retailer was not properly
licensed at the time the tobacco products were seized, or upon
receipt of a properly executed waiver and consent to
forfeiture as provided in this Section, the Department must
enter an order declaring the tobacco products or vending
devices confiscated and forfeited to the State, to be held by
the Department for disposal by it as provided in Section
10-58. The Department must give notice of the order to the
owner of the property, if the owner is known, and also to the
person in whose possession the property was found, if that
person is known and if the person in possession is not the
owner of the property. If neither the owner nor the person in
possession of the property is known, the Department must cause
publication of the order to be made at least once in each week
for 3 weeks successively in a newspaper of general circulation
in the county where the hearing was held.
(Source: P.A. 92-743, eff. 7-25-02.)
Section 20. The Cannabis Regulation and Tax Act is amended
by changing Section 65-42 as follows:
(410 ILCS 705/65-42)
Sec. 65-42. Seizure and forfeiture. After seizing any
cannabis as provided in Section 65-41, the Department must
hold a hearing and determine whether the retailer was properly
registered to sell the cannabis at the time of its seizure by
the Department. The Department is not required to hold such a
hearing if a waiver and consent to forfeiture has been
executed by the owner of the cannabis, if the owner is known,
and by the person in whose possession the cannabis so taken was
found, if that person is known and if that person is not the
owner of said cannabis. The Department shall give not less
than 20 days' notice of the time and place of the hearing to
the owner of the cannabis, if the owner is known, and also to
the person in whose possession the cannabis was found, if that
person is known and if the person in possession is not the
owner of the cannabis. If neither the owner nor the person in
possession of the cannabis is known, the Department must cause
publication of the time and place of the hearing to be made at
least once in each week for 3 weeks successively in a newspaper
of general circulation in the county where the hearing is to be
held.
If, as the result of the hearing, the Department
determines that the retailer was not properly registered at
the time the cannabis was seized, or upon receipt of a properly
executed waiver and consent to forfeiture as provided in this
Section, the Department must enter an order declaring the
cannabis confiscated and forfeited to the State, to be held by
the Department for disposal by it as provided in Section
65-43. The Department must give notice of the order to the
owner of the cannabis, if the owner is known, and also to the
person in whose possession the cannabis was found, if that
person is known and if the person in possession is not the
owner of the cannabis. If neither the owner nor the person in
possession of the cannabis is known, the Department must cause
publication of the order to be made at least once in each week
for 3 weeks successively in a newspaper of general circulation
in the county where the hearing was held.
(Source: P.A. 101-27, eff. 6-25-19.)