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| Public Act 095-1053 |
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AN ACT concerning revenue.
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Be it enacted by the People of the State of Illinois, | ||||
represented in the General Assembly:
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Section 3. The Retailers' Occupation Tax Act is amended by | ||||
changing Section 2a and by adding Section 13.7 as follows:
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(35 ILCS 120/2a) (from Ch. 120, par. 441a)
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Sec. 2a. It is unlawful for any person to engage in the | ||||
business of
selling tangible personal property at retail in | ||||
this State without a
certificate of registration from the | ||||
Department. Application
for a certificate of registration | ||||
shall be made to the Department upon
forms furnished by it. | ||||
Each such application shall be signed and verified
and shall | ||||
state: (1) the name and social security number of the
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applicant; (2) the address of his principal place
of business; | ||||
(3) the address of the principal place of business from which
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he engages in the business of selling tangible personal | ||||
property at retail
in this State and the addresses of all other | ||||
places of business, if any
(enumerating such addresses, if any, | ||||
in a separate list attached to and
made a part of the | ||||
application), from which he engages in the business of
selling | ||||
tangible personal property at retail in this State; (4)
the
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name and address of the person or persons who will be | ||||
responsible for
filing returns and payment of taxes due under | ||||
this Act; (5) in the
case of
a corporation, the name, title, | ||
and social security number of
each corporate officer; (6) in | ||
the case of a limited liability
company, the
name, social | ||
security number, and FEIN number of
each
manager and member; | ||
and (7) such other information
as the Department may reasonably | ||
require. The application shall contain
an acceptance of | ||
responsibility signed by the person or persons who will be
| ||
responsible for filing returns and payment of the taxes due | ||
under this
Act. If the applicant will sell tangible personal | ||
property at retail
through vending machines, his application to | ||
register shall indicate the
number of vending machines to be so | ||
operated; and thereafter, he shall
notify the Department by | ||
January 31 of the number of vending machines which
such person | ||
was using in his business of selling tangible personal property
| ||
at retail on the preceding December 31.
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The Department may deny a certificate of registration to | ||
any applicant
if the owner, any partner, any manager or member | ||
of a limited liability
company, or a corporate officer of the | ||
applicant, is or
has been the owner, a partner, a manager or | ||
member of a limited
liability company, or a corporate officer, | ||
of another retailer
that is in default for moneys due under | ||
this Act.
| ||
Every applicant for a certificate of registration | ||
hereunder shall, at
the time of filing such application, | ||
furnish a bond from a surety company
authorized to do business | ||
in the State of Illinois, or an irrevocable
bank letter of | ||
credit or a bond signed by 2
personal sureties who have filed, | ||
with the Department, sworn statements
disclosing net assets | ||
equal to at least 3 times the amount of the bond to
be required | ||
of such applicant, or a bond secured by an assignment of a bank
| ||
account or certificate of deposit, stocks or bonds, conditioned | ||
upon the
applicant paying to the State of Illinois all moneys | ||
becoming due under
this Act and under any other State tax law | ||
or municipal or county tax
ordinance or resolution under which | ||
the certificate of registration that is
issued to the applicant | ||
under this Act will permit the applicant to engage
in business | ||
without registering separately under such other law, ordinance
| ||
or resolution. The Department shall fix the amount of such | ||
security in each
case, taking into consideration the amount of | ||
money expected to become due
from the applicant under this Act | ||
and under any other State tax law or
municipal or county tax | ||
ordinance or resolution under which the certificate
of | ||
registration that is issued to the applicant under this Act | ||
will permit
the applicant to engage in business without | ||
registering separately under
such other law, ordinance or | ||
resolution. The amount of security required by
the Department | ||
shall be such as, in its opinion, will protect the State of
| ||
Illinois against failure to pay the amount which may become due | ||
from the
applicant under this Act and under any other State tax | ||
law or municipal or
county tax ordinance or resolution under | ||
which the certificate of
registration that is issued to the | ||
applicant under this Act will permit the
applicant to engage in | ||
business without registering separately under such
other law, | ||
ordinance or resolution, but the amount of the security | ||
required
by the Department shall not exceed three times the | ||
amount of the
applicant's average monthly tax liability, or | ||
$50,000.00, whichever amount
is lower.
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No certificate of registration under this Act shall be | ||
issued by the
Department until the applicant provides the | ||
Department with satisfactory
security as herein provided for.
| ||
Upon receipt of the application for certificate of | ||
registration in
proper form, and upon approval by the | ||
Department of the security furnished
by the applicant, the | ||
Department shall issue to such applicant a
certificate of | ||
registration which shall permit the person to whom it is
issued | ||
to engage in the business of selling tangible personal property | ||
at
retail in this State. The certificate of registration shall | ||
be
conspicuously displayed at the place of business which the | ||
person so
registered states in his application to be the | ||
principal place of business
from which he engages in the | ||
business of selling tangible personal property
at retail in | ||
this State.
| ||
No certificate of registration issued to a taxpayer who | ||
files returns
required by this Act on a monthly basis shall be | ||
valid after the expiration
of 5 years from the date of its | ||
issuance or last renewal. The expiration
date of a | ||
sub-certificate of registration shall be that of the | ||
certificate
of registration to which the sub-certificate | ||
relates. A certificate of
registration shall automatically be | ||
renewed, subject to revocation as
provided by this Act, for an | ||
additional 5 years from the date of its
expiration unless | ||
otherwise notified by the Department as provided by this
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paragraph. Where a taxpayer to whom a certificate of | ||
registration is
issued under this Act is in default to the | ||
State of Illinois for delinquent
returns or for moneys due
| ||
under this Act or any other State tax law or municipal or | ||
county ordinance
administered or enforced by the Department, | ||
the Department shall, not less
than 120 days before the | ||
expiration date of such certificate of
registration, give | ||
notice to the taxpayer to whom the certificate was
issued of | ||
the account period of the delinquent returns, the amount of
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tax,
penalty and interest due and owing from the
taxpayer, and | ||
that the certificate of registration shall not be
automatically | ||
renewed upon its expiration date unless the taxpayer, on or
| ||
before the date of expiration, has filed and paid the | ||
delinquent returns or
paid the defaulted amount in full. A
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taxpayer to whom such a notice is issued shall be deemed an | ||
applicant for
renewal. The Department shall promulgate | ||
regulations establishing
procedures for taxpayers who file | ||
returns on a monthly basis but desire and
qualify to change to | ||
a quarterly or yearly filing basis and will no longer
be | ||
subject to renewal under this Section, and for taxpayers who | ||
file
returns on a yearly or quarterly basis but who desire or | ||
are required to
change to a monthly filing basis and will be | ||
subject to renewal under
this Section.
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The Department may in its discretion approve renewal by an | ||
applicant
who is in default if, at the time of application for | ||
renewal, the applicant
files all of the delinquent returns or | ||
pays to the Department such
percentage of the defaulted amount | ||
as may be
determined by the Department and agrees in writing to | ||
waive all limitations
upon the Department for collection of the | ||
remaining defaulted amount to the
Department over a period not | ||
to exceed 5 years from the date of renewal of
the certificate; | ||
however, no renewal application submitted by an applicant
who | ||
is in default shall be approved if the immediately preceding | ||
renewal by
the applicant was conditioned upon the installment | ||
payment
agreement described in this Section. The payment | ||
agreement herein provided
for shall be in addition to and not | ||
in lieu of the security required by
this Section of a taxpayer | ||
who is no longer considered a prior continuous
compliance | ||
taxpayer. The execution of the payment agreement as provided in
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this Act shall not toll the accrual of interest at the | ||
statutory rate.
| ||
The Department may suspend a certificate of registration if | ||
the Department finds that the person to whom the certificate of | ||
registration has been issued knowingly sold contraband | ||
cigarettes. | ||
A certificate of registration issued under this Act more | ||
than 5 years
before the effective date of this amendatory Act | ||
of 1989 shall expire and
be subject to the renewal provisions | ||
of this Section on the next
anniversary of the date of issuance | ||
of such certificate which occurs more
than 6 months after the | ||
effective date of this amendatory Act of 1989. A
certificate of | ||
registration issued less than 5 years before the effective
date | ||
of this amendatory Act of 1989 shall expire and be subject to | ||
the
renewal provisions of this Section on the 5th anniversary | ||
of the issuance
of the certificate.
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If the person so registered states that he operates other | ||
places of
business from which he engages in the business of | ||
selling tangible personal
property at retail in this State, the | ||
Department shall furnish him with a
sub-certificate of | ||
registration for each such place of business, and the
applicant | ||
shall display the appropriate sub-certificate of registration | ||
at
each such place of business. All sub-certificates of | ||
registration shall
bear the same registration number as that | ||
appearing upon the certificate of
registration to which such | ||
sub-certificates relate.
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If the applicant will sell tangible personal property at | ||
retail through
vending machines, the Department shall furnish | ||
him with a sub-certificate
of registration for each such | ||
vending machine, and the applicant shall
display the | ||
appropriate sub-certificate of registration on each such
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vending machine by attaching the sub-certificate of | ||
registration to a
conspicuous part of such vending machine.
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Where the same person engages in 2 or more businesses of | ||
selling
tangible personal property at retail in this State, | ||
which businesses are
substantially different in character or | ||
engaged in under different trade
names or engaged in under | ||
other substantially dissimilar circumstances (so
that it is | ||
more practicable, from an accounting, auditing or bookkeeping
| ||
standpoint, for such businesses to be separately registered), | ||
the
Department may require or permit such person (subject to | ||
the same
requirements concerning the furnishing of security as | ||
those that are
provided for hereinbefore in this Section as to | ||
each application for a
certificate of registration) to apply | ||
for and obtain a separate certificate
of registration for each | ||
such business or for any of such businesses, under
a single | ||
certificate of registration supplemented by related
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sub-certificates of registration.
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Any person who is registered under the "Retailers' | ||
Occupation Tax Act"
as of March 8, 1963, and who, during the | ||
3-year period immediately prior to
March 8, 1963, or during a | ||
continuous 3-year period part of which passed
immediately | ||
before and the remainder of which passes immediately after
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March 8, 1963, has been so registered continuously and who is | ||
determined by
the Department not to have been either delinquent | ||
or deficient in the
payment of tax liability during that period | ||
under this Act or under any
other State tax law or municipal or | ||
county tax ordinance or resolution
under which the certificate | ||
of registration that is issued to the
registrant under this Act | ||
will permit the registrant to engage in business
without | ||
registering separately under such other law, ordinance or
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resolution, shall be considered to be a Prior Continuous | ||
Compliance
taxpayer. Also any taxpayer who has, as verified by | ||
the Department,
faithfully and continuously complied with the | ||
condition of his bond or
other security under the provisions of | ||
this Act for a period of 3
consecutive years shall be | ||
considered to be a Prior Continuous Compliance
taxpayer.
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Every Prior Continuous Compliance taxpayer shall be exempt | ||
from all
requirements under this Act concerning the furnishing | ||
of security as a
condition precedent to his being authorized to | ||
engage in the business of
selling tangible personal property at | ||
retail in this State. This exemption
shall continue for each | ||
such taxpayer until such time as he may be
determined by the | ||
Department to be delinquent in the filing of any returns,
or is | ||
determined by the Department (either through the Department's
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issuance of a final assessment which has become final under the | ||
Act, or by
the taxpayer's filing of a return which admits tax | ||
that is not paid to be
due) to be delinquent or deficient in | ||
the paying of any tax under this Act
or under any other State | ||
tax law or municipal or county tax ordinance or
resolution | ||
under which the certificate of registration that is issued to
| ||
the registrant under this Act will permit the registrant to | ||
engage in
business without registering separately under such | ||
other law, ordinance or
resolution, at which time that taxpayer | ||
shall become subject to all the
financial responsibility | ||
requirements of this Act and, as a condition of
being allowed | ||
to continue to engage in the business of selling tangible
| ||
personal property at retail, shall be required to post bond or | ||
other
acceptable security with the Department covering | ||
liability which such
taxpayer may thereafter incur. Any | ||
taxpayer who fails to pay an admitted or
established liability | ||
under this Act may also be required to post bond or
other | ||
acceptable security with this Department guaranteeing the | ||
payment of
such admitted or established liability.
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No certificate of registration shall be issued to any | ||
person who is in
default to the State of Illinois for moneys | ||
due under this Act or under any
other State tax law or | ||
municipal or county tax ordinance or resolution
under which the | ||
certificate of registration that is issued to the applicant
| ||
under this Act will permit the applicant to engage in business | ||
without
registering separately under such other law, ordinance | ||
or resolution.
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Any person aggrieved by any decision of the Department | ||
under this
Section may, within 20 days after notice of such | ||
decision, protest and
request a hearing, whereupon the | ||
Department shall give notice to such
person of the time and | ||
place fixed for such hearing and shall hold a
hearing in | ||
conformity with the provisions of this Act and then issue its
| ||
final administrative decision in the matter to such person. In | ||
the absence
of such a protest within 20 days, the Department's | ||
decision shall become
final without any further determination | ||
being made or notice given.
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With respect to security other than bonds (upon which the | ||
Department may
sue in the event of a forfeiture), if the | ||
taxpayer fails to pay, when due,
any amount whose payment such | ||
security guarantees, the Department shall,
after such | ||
liability is admitted by the taxpayer or established by the
| ||
Department through the issuance of a final assessment that has | ||
become final
under the law, convert the security which that | ||
taxpayer has furnished into
money for the State, after first | ||
giving the taxpayer at least 10 days'
written notice, by | ||
registered or certified mail, to pay the liability or
forfeit | ||
such security to the Department. If the security consists of | ||
stocks
or bonds or other securities which are listed on a | ||
public exchange, the
Department shall sell such securities | ||
through such public exchange. If
the security consists of an | ||
irrevocable bank letter of credit, the
Department shall convert | ||
the security in the manner provided for in the
Uniform | ||
Commercial Code. If the security consists of a bank certificate | ||
of
deposit, the Department shall convert the security into | ||
money by demanding
and collecting the amount of such bank | ||
certificate of deposit from the bank
which issued such | ||
certificate. If the security consists of a type of stocks
or | ||
other securities which are not listed on a public exchange, the
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Department shall sell such security to the highest and best | ||
bidder after
giving at least 10 days' notice of the date, time | ||
and place of the intended
sale by publication in the "State | ||
Official Newspaper". If the Department
realizes more than the | ||
amount of such liability from the security, plus the
expenses | ||
incurred by the Department in converting the security into | ||
money,
the Department shall pay such excess to the taxpayer who | ||
furnished such
security, and the balance shall be paid into the | ||
State Treasury.
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The Department shall discharge any surety and shall release | ||
and return
any security deposited, assigned, pledged or | ||
otherwise provided to it by
a taxpayer under this Section | ||
within 30 days after:
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(1) such taxpayer becomes a Prior Continuous | ||
Compliance taxpayer; or
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(2) such taxpayer has ceased to collect receipts on | ||
which he is required
to remit tax 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 | ||
and under every
other State tax law or municipal or county | ||
tax ordinance or resolution
under which the certificate of | ||
registration issued under this Act permits
the registrant | ||
to engage in business without registering separately under
| ||
such other law, ordinance or resolution. The Department | ||
shall make a final
determination of the taxpayer's | ||
outstanding tax liability as expeditiously
as possible | ||
after his final tax return has been filed; if the | ||
Department
cannot make such final determination within 45 | ||
days after receiving the
final tax return, within such | ||
period it shall so notify the taxpayer,
stating its reasons | ||
therefor.
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(Source: P.A. 90-491, eff. 1-1-98; 91-357, eff. 7-29-99.)
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(35 ILCS 120/13.7 new)
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Sec. 13.7. Rulemaking. Rulemaking authority to implement | ||
this amendatory Act of the 95th General Assembly, if any, is | ||
conditioned on the rules being adopted in accordance with all | ||
provisions of the Illinois Administrative Procedure Act and all | ||
rules and procedures of the Joint Committee on Administrative | ||
Rules; any purported rule not so adopted, for whatever reason, | ||
is unauthorized. | ||
Section 5. The Cigarette Tax Act is amended by changing | ||
Sections 1, 3, 3-10, 4, 20, and 21 and by adding Sections 3-15, | ||
4d, and 29.5 as follows:
| ||
(35 ILCS 130/1) (from Ch. 120, par. 453.1)
| ||
Sec. 1. For the purposes of this Act:
| ||
"Brand Style" means a variety of cigarettes distinguished | ||
by the tobacco used, tar and nicotine content, flavoring used, | ||
size of the cigarette, filtration on the cigarette or | ||
packaging. | ||
"Cigarette", means any when used in this Act, shall be | ||
construed to mean: Any
roll for smoking made wholly or in part | ||
of tobacco irrespective of size
or shape and whether or not | ||
such tobacco is flavored, adulterated or
mixed with any other | ||
ingredient, and the wrapper or cover of which is
made of paper | ||
or any other substance or material except tobacco.
| ||
"Contraband cigarettes" means: | ||
(a) cigarettes that do not bear a required tax stamp | ||
under this Act; | ||
(b) cigarettes for which any required federal taxes | ||
have not been paid; | ||
(c) cigarettes that bear a counterfeit tax stamp; | ||
(d) cigarettes that are manufactured, fabricated, | ||
assembled, processed, packaged, or labeled by any person | ||
other than (i) the owner of the trademark rights in the | ||
cigarette brand or (ii) a person that is directly or | ||
indirectly authorized by such owner; | ||
(e) cigarettes imported into the United States, or | ||
otherwise distributed, in violation of the federal | ||
Imported Cigarette Compliance Act of 2000 (Title IV of | ||
Public Law 106-476); or | ||
(f) cigarettes that have false manufacturing labels. | ||
"Person" means any natural individual, firm, partnership, | ||
association, joint
stock company, joint adventure, public or | ||
private corporation, however formed,
limited liability | ||
company, or a receiver, executor, administrator, trustee,
| ||
guardian or other representative appointed by order of any | ||
court.
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"Prior Continuous Compliance Taxpayer" means any person | ||
who is licensed
under this Act and who, having been a licensee | ||
for a continuous period of 5
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. Also, 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 5
consecutive years shall be considered to be a | ||
"Prior continuous compliance
taxpayer". In calculating the | ||
consecutive period of time described herein
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 1987 shall be | ||
credited to any
licensee who became licensed on or before the | ||
effective date of this
amendatory Act of 1987.
| ||
"Department" means the Department of Revenue.
| ||
"Sale" means any transfer, exchange or barter in any manner | ||
or by any
means whatsoever for a consideration, and includes | ||
and means all sales
made by any person.
| ||
"Original Package" means the individual packet, box or | ||
other container
whatsoever used to contain and to convey | ||
cigarettes to the consumer.
| ||
"Distributor" means any and each of the following:
| ||
(1) Any person engaged in the business of selling | ||
cigarettes in this
State who brings or causes to be brought | ||
into this State from without
this State any original packages | ||
of cigarettes, on which original
packages there is no | ||
authorized evidence underneath a sealed transparent
wrapper | ||
showing that the tax liability imposed by this Act has been | ||
paid
or assumed by the out-of-State seller of such cigarettes, | ||
for sale or
other disposition in the course of such business.
| ||
(2) Any person who makes, manufactures or fabricates | ||
cigarettes in this
State for sale in this State, except a | ||
person who makes, manufactures
or fabricates 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.
| ||
(3) Any person who makes, manufactures or fabricates | ||
cigarettes
outside this State, which cigarettes are placed in | ||
original packages
contained in sealed transparent wrappers, | ||
for delivery or shipment into
this State, and who elects to | ||
qualify and is accepted by the Department
as a distributor | ||
under Section 4b of this Act.
| ||
"Place of business" shall mean and include any place where | ||
cigarettes
are sold or where cigarettes are manufactured, | ||
stored or kept for the
purpose of sale or consumption, | ||
including any vessel, vehicle, airplane,
train or vending | ||
machine.
| ||
"Business" means any trade, occupation, activity or | ||
enterprise
engaged in for the purpose of selling cigarettes in | ||
this State.
| ||
"Retailer" means any person who engages in the making of | ||
transfers of
the ownership of, or title to, cigarettes to a | ||
purchaser for use or
consumption and not for resale in any | ||
form, for a valuable consideration. "Retailer" does not include | ||
a person:
| ||
(1) who transfers to residents incarcerated in penal | ||
institutions
or resident patients of a State-operated | ||
mental health facility ownership
of cigarettes made, | ||
manufactured, or fabricated as part of a correctional
| ||
industries program; or | ||
(2) who transfers cigarettes to a not-for-profit | ||
research institution that conducts tests concerning the | ||
health effects of tobacco products and who does not offer | ||
the cigarettes for resale.
| ||
"Retailer" shall be construed to include any person who | ||
engages in
the making of transfers of the ownership of, or | ||
title to, cigarettes to
a purchaser, for use or consumption by | ||
any other person to whom such
purchaser may transfer the | ||
cigarettes without a valuable consideration,
except a person | ||
who transfers to residents incarcerated in penal institutions
| ||
or resident patients of a State-operated mental health facility | ||
ownership
of cigarettes made, manufactured or fabricated as | ||
part of a correctional
industries program.
| ||
"Stamp" or "stamps" mean the indicia required to be affixed | ||
on a pack of cigarettes that evidence payment of the tax on | ||
cigarettes under Section 2 of this Act (35 ILCS 130/2), or the | ||
indicia used to indicate that the cigarettes are intended for a | ||
sale or distribution within this State that is exempt from | ||
State tax under any applicable provision of law. | ||
"Within this State" means within the exterior limits of the | ||
State of Illinois and includes all territory within these | ||
limits owned by or ceded to the United States of America. | ||
"Related party" means any person that is associated with | ||
any other person because he or she: | ||
(a) is an officer or director of a business; | ||
(b) is legally recognized as a partner in business; or | ||
(c) is directly or indirectly controlled by another. | ||
(Source: P.A. 95-462, eff. 8-27-07.)
| ||
(35 ILCS 130/3) (from Ch. 120, par. 453.3)
| ||
Sec. 3. Affixing tax stamp; remitting tax to the | ||
Department. Payment of
the taxes imposed by Section 2 of this | ||
Act shall
(except as hereinafter provided) be evidenced by | ||
revenue tax stamps affixed
to each original package of | ||
cigarettes. Each distributor of cigarettes,
before delivering | ||
or causing to be delivered any original package of
cigarettes | ||
in this State to a purchaser, shall firmly affix a proper stamp
| ||
or stamps to each such package, or (in case of manufacturers of | ||
cigarettes
in original packages which are contained inside a | ||
sealed transparent
wrapper) shall imprint the required | ||
language on the original package of
cigarettes beneath such | ||
outside wrapper, as hereinafter provided. Any stamp required by | ||
this Act shall note whether the State tax under Section 2 of | ||
this Act (35 ILCS 130/2) was paid.
| ||
No stamp or imprint may be affixed to, or made upon, any | ||
package of
cigarettes unless that package complies with all | ||
requirements of the federal
Cigarette Labeling and Advertising | ||
Act, 15 U.S.C. 1331 and following, for the
placement of labels, | ||
warnings, or any other information upon a package of
cigarettes | ||
that is sold within the United States. Under the authority of
| ||
Section 6, the Department shall revoke the license of any | ||
distributor that is
determined to have violated this paragraph.
| ||
A person may not affix a stamp on a package of cigarettes, | ||
cigarette papers,
wrappers, or tubes if that individual package | ||
has been marked for export
outside the United States with a | ||
label or notice in compliance with Section
290.185 of Title 27 | ||
of the Code of Federal Regulations. It is not a defense to
a | ||
proceeding for violation of this paragraph that the label or | ||
notice has been
removed, mutilated, obliterated, or altered in | ||
any manner.
| ||
Only distributors licensed under this Act or out-of-state | ||
manufacturers holding a permit under this Act may receive | ||
unstamped packs of cigarettes. Prior to shipment to another | ||
person, each licensed distributor or out-of-state manufacturer | ||
holding a permit shall apply a stamp to each pack of cigarettes | ||
imported, distributed, or sold whether or not such cigarettes | ||
are subject to State tax under Section 2 of this Act (35 ILCS | ||
130/2) or any other provision of State law, provided that a | ||
distributor or out-of-state manufacturer may only apply a tax | ||
stamp to a pack of cigarettes purchased or obtained directly | ||
from a licensed distributor or an out-of-state manufacturer | ||
holding a permit. Only a licensed distributor or an | ||
out-of-state manufacturer holding a permit may ship or | ||
otherwise cause to be delivered unstamped packs of cigarettes | ||
in, into, or from this State, provided that a licensed | ||
distributor or an out-of-state manufacturer holding a permit | ||
may transport unstamped packs of cigarettes to a facility, | ||
wherever located, owned by such distributor or manufacturer. | ||
Any person that ships or otherwise causes to be delivered | ||
unstamped packs of cigarettes into, within, or from this State | ||
shall ensure that the invoice or equivalent documentation and | ||
the bill of lading or freight bill for the shipment identifies | ||
the true name and address of the cosignor or seller, the true | ||
name and address of the cosignee or purchaser, and the quantity | ||
by brand style of the cigarettes so transported, provided that | ||
this Section shall not be construed as to impose any | ||
requirement or liability upon any common or contract carrier. | ||
The Department, or any person authorized by the Department, | ||
shall
sell such stamps only to persons holding valid
licenses | ||
as distributors under this Act. On and after July 1, 2003, | ||
payment
for such stamps must be made by means of
electronic | ||
funds transfer. The Department may refuse to sell stamps to any
| ||
person who does not comply
with the provisions of this Act.
| ||
Beginning on the effective date of this amendatory Act of the | ||
92nd General
Assembly and through June 30, 2002, persons | ||
holding valid licenses as
distributors
may purchase cigarette | ||
tax stamps up to an amount equal to 115% of the
distributor's | ||
average monthly cigarette tax stamp purchases over the 12
| ||
calendar
months prior to the effective date of this amendatory | ||
Act of the 92nd General
Assembly.
| ||
Prior to December 1, 1985, the Department shall allow a | ||
distributor
21 days in which to make final
payment of the | ||
amount to be paid for such stamps, by allowing the
distributor | ||
to make payment for the stamps at the time of purchasing them
| ||
with a draft which shall be in such form as the Department | ||
prescribes, and
which shall be payable within 21 days | ||
thereafter: Provided that such
distributor has filed with the | ||
Department, and has received the
Department's approval of, a | ||
bond, which is in addition to the bond required
under Section 4 | ||
of this Act, payable to the Department in an amount equal
to | ||
80% of such distributor's average monthly tax liability to
the | ||
Department under this Act during the preceding calendar year or | ||
$500,000,
whichever is less. The Bond shall be joint and
| ||
several and shall be in the form of a surety company bond in | ||
such form as
the Department prescribes, or it may be in the | ||
form of a bank certificate
of deposit or bank letter of credit. | ||
The bond shall be conditioned upon the
distributor's payment of | ||
amount of any 21-day draft which the Department
accepts from | ||
that distributor for the delivery of stamps to that
distributor | ||
under this Act. The distributor's failure to pay any such
| ||
draft, when due, shall also make such distributor automatically | ||
liable to
the Department for a penalty equal to 25% of the | ||
amount of such draft.
| ||
On and after December 1, 1985 and until July 1, 2003, the | ||
Department
shall allow a distributor
30 days in which to make
| ||
final payment of the amount to be paid for such stamps, by | ||
allowing the
distributor to make payment for the stamps at the | ||
time of purchasing them
with a draft which shall be in such | ||
form as the Department prescribes, and
which shall be payable | ||
within 30 days thereafter, and beginning on January 1,
2003 and | ||
thereafter, the draft shall be payable by means of electronic | ||
funds
transfer: Provided that such
distributor has filed with | ||
the Department, and has received the
Department's approval of, | ||
a bond, which is in addition to the bond required
under Section | ||
4 of this Act, payable to the Department in an amount equal
to | ||
150% of such distributor's average monthly tax liability to the
| ||
Department under this Act during the preceding calendar year or | ||
$750,000,
whichever is less, except that as to bonds filed on | ||
or after January 1,
1987, such additional bond shall be in an | ||
amount equal to 100% of such
distributor's average monthly tax | ||
liability under this Act during the
preceding calendar year or | ||
$750,000, whichever is less. The bond shall be
joint and | ||
several and shall be in the form of a surety company bond in | ||
such
form as the Department prescribes, or it may be in the | ||
form of a bank
certificate of deposit or bank letter of credit.
| ||
The bond shall be conditioned upon the distributor's payment of | ||
the amount
of any 30-day draft which the Department accepts | ||
from that distributor for
the delivery of stamps to that | ||
distributor under this Act. The
distributor's failure to pay | ||
any such draft, when due, shall also make such
distributor | ||
automatically liable to the Department for a penalty equal to
| ||
25% of the amount of such draft.
| ||
Every prior continuous compliance taxpayer shall be exempt | ||
from all
requirements under this Section concerning the | ||
furnishing of such bond, as
defined in this Section, as a | ||
condition precedent to his being authorized
to engage in the | ||
business licensed under this Act. This exemption shall
continue | ||
for each such taxpayer until such time as he may be determined | ||
by
the Department to be delinquent in the filing of any | ||
returns, or is
determined by the Department (either through the | ||
Department's issuance of a
final assessment which has become | ||
final under the Act, or by the taxpayer's
filing of a return | ||
which admits tax to be due that is not paid) to be
delinquent | ||
or deficient in the paying of any tax under this Act, at which
| ||
time that taxpayer shall become subject to the bond | ||
requirements of this
Section and, as a condition of being | ||
allowed to continue to engage in the
business licensed under | ||
this Act, shall be required to furnish bond to the
Department | ||
in such form as provided in this Section. Such taxpayer shall
| ||
furnish such bond for a period of 2 years, after which, if the | ||
taxpayer has
not been delinquent in the filing of any returns, | ||
or delinquent or
deficient in the paying of any tax under this | ||
Act, the Department may
reinstate such person as a prior | ||
continuance compliance taxpayer. Any
taxpayer who fails to pay | ||
an admitted or established liability under this
Act may also be | ||
required to post bond or other acceptable security with the
| ||
Department guaranteeing the payment of such admitted or | ||
established liability.
| ||
Any person aggrieved by any decision of the Department | ||
under this
Section may, within the time allowed by law, protest | ||
and request a hearing,
whereupon the Department shall give | ||
notice and shall hold a hearing in
conformity with the | ||
provisions of this Act and then issue its final
administrative | ||
decision in the matter to such person. In the absence of
such a | ||
protest filed within the time allowed by law, the Department's
| ||
decision shall become final without any further determination | ||
being made or
notice given.
| ||
The Department shall discharge any surety and shall release | ||
and return
any bond or security deposited, assigned, pledged, | ||
or otherwise provided to
it by a taxpayer under this Section | ||
within 30 days after:
| ||
(1) Such taxpayer becomes a prior continuous compliance | ||
taxpayer; or
| ||
(2) Such taxpayer has ceased to collect receipts on which | ||
he is
required to remit tax 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. The
Department | ||
shall make a final determination of the taxpayer's outstanding
| ||
tax liability as expeditiously as possible after his final tax | ||
return has
been filed. If the Department cannot make such final | ||
determination within
45 days after receiving the final tax | ||
return, within such period it shall
so notify the taxpayer, | ||
stating its reasons therefor.
| ||
The Department may authorize distributors to affix revenue | ||
tax stamps by
imprinting tax meter stamps upon original | ||
packages of cigarettes. The
Department shall adopt rules and | ||
regulations relating to the imprinting of
such tax meter stamps | ||
as will result in payment of the proper taxes as
herein | ||
imposed. No distributor may affix revenue tax stamps to | ||
original
packages of cigarettes by imprinting tax meter stamps | ||
thereon unless such
distributor has first obtained permission | ||
from the Department to employ
this method of affixation. The | ||
Department shall regulate the use of tax
meters and may, to | ||
assure the proper collection of the taxes imposed by
this Act, | ||
revoke or suspend the privilege, theretofore granted by the
| ||
Department to any distributor, to imprint tax meter stamps upon | ||
original
packages of cigarettes.
| ||
Illinois cigarette manufacturers who place their | ||
cigarettes in original
packages which are contained inside a | ||
sealed transparent wrapper, and
similar out-of-State cigarette | ||
manufacturers who elect to qualify and are
accepted by the | ||
Department as distributors under Section 4b of this Act,
shall | ||
pay the taxes imposed by this Act by remitting the amount | ||
thereof to
the Department by the 5th day of each month covering | ||
cigarettes shipped or
otherwise delivered in Illinois to | ||
purchasers during the preceding calendar
month. Such | ||
manufacturers of cigarettes in original packages which are
| ||
contained inside a sealed transparent wrapper, before | ||
delivering such
cigarettes or causing such cigarettes to be | ||
delivered in this State to
purchasers, shall evidence their | ||
obligation to remit the taxes due with
respect to such | ||
cigarettes by imprinting language to be prescribed by the
| ||
Department on each original package of such cigarettes | ||
underneath the
sealed transparent outside wrapper of such | ||
original package, in such place
thereon and in such manner as | ||
the Department may designate. Such imprinted
language shall | ||
acknowledge the manufacturer's payment of or liability for
the | ||
tax imposed by this Act with respect to the distribution of | ||
such
cigarettes.
| ||
A distributor shall not affix, or cause to be affixed, any | ||
stamp or imprint
to a package of cigarettes, as provided for in | ||
this Section, if the tobacco
product
manufacturer, as defined | ||
in Section 10 of the Tobacco Product Manufacturers'
Escrow
Act, | ||
that made or sold the cigarettes 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 | ||
cigarettes 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.
| ||
(Source: P.A. 92-322, eff. 1-1-02; 92-536, eff. 6-6-02;
92-737, | ||
eff. 7-25-02; 93-22, eff. 6-20-03.)
| ||
(35 ILCS 130/3-10)
| ||
Sec. 3-10. Cigarette enforcement.
| ||
(a) Prohibitions. It is unlawful for any person:
| ||
(1) to sell or distribute in this State; to acquire, | ||
hold, own, possess,
or
transport, for sale or distribution | ||
in this State; or to import, or cause to be
imported into | ||
this State for sale or distribution in this State:
| ||
(A) any cigarettes the package of which:
| ||
(i) bears any statement, label, stamp, | ||
sticker, or notice
indicating that the | ||
manufacturer did not intend the cigarettes to be
| ||
sold, distributed, or used in the United States, | ||
including but not
limited to labels stating "For | ||
Export Only", "U.S. Tax Exempt",
"For Use Outside | ||
U.S.", or similar wording; or
| ||
(ii) does not comply with:
| ||
(aa) all requirements imposed by or | ||
pursuant to
federal law regarding warnings and | ||
other information on
packages of cigarettes | ||
manufactured, packaged, or imported
for sale, | ||
distribution, or use in the United States, | ||
including
but not limited to the precise | ||
warning labels specified in the
federal | ||
Cigarette Labeling and Advertising Act, 15 | ||
U.S.C.
1333; and
| ||
(bb) all federal trademark and copyright | ||
laws;
| ||
(B) any cigarettes imported into the United States | ||
in violation of
26 U.S.C. 5754 or any other federal | ||
law, or implementing federal
regulations;
| ||
(C) any cigarettes that such person otherwise | ||
knows or has reason
to know the manufacturer did not | ||
intend to be sold, distributed, or used in
the United | ||
States; or
| ||
(D) any cigarettes for which there has not been | ||
submitted to the
Secretary of the U.S. Department of | ||
Health and Human Services the list or
lists of the | ||
ingredients added to tobacco in the manufacture of the
| ||
cigarettes required by the federal Cigarette Labeling | ||
and Advertising Act,
15 U.S.C. 1335a;
| ||
(2) to alter the package of any cigarettes, prior to | ||
sale or distribution
to
the
ultimate consumer, so as to | ||
remove, conceal, or obscure:
| ||
(A) any statement, label, stamp, sticker, or | ||
notice described in
subdivision (a)(1)(A)(i) of this | ||
Section;
| ||
(B) any health warning that is not specified in, or | ||
does not conform
with the requirements of, the federal | ||
Cigarette Labeling and Advertising
Act, 15 U.S.C. | ||
1333; or
| ||
(3) to affix any stamp required pursuant to this Act to | ||
the package of any
cigarettes described in subdivision | ||
(a)(1) of this Section or altered in
violation of
| ||
subdivision (a)(2); or . | ||
(4) to knowingly possess, or possess for sale, | ||
contraband cigarettes.
| ||
(b) Documentation. On the first business day of each month, | ||
each person
licensed
to affix the State tax stamp to cigarettes | ||
shall file with the Department, for
all cigarettes
imported | ||
into the United States to which the person has affixed the tax | ||
stamp
in the
preceding month:
| ||
(1) a copy of:
| ||
(A) the permit issued pursuant to the Internal | ||
Revenue Code, 26
U.S.C. 5713, to the person importing | ||
the cigarettes into the United States
allowing the | ||
person to import the cigarettes; and
| ||
(B) the customs form containing, with respect to | ||
the cigarettes, the
internal revenue tax information | ||
required by the U.S. Bureau of Alcohol,
Tobacco and | ||
Firearms;
| ||
(2) a statement, signed by the person under penalty of | ||
perjury, which shall
be treated as confidential by the | ||
Department and exempt from disclosure under
the Freedom of | ||
Information Act, identifying the brand and brand styles of | ||
all such
cigarettes, the quantity of each brand style of | ||
such cigarettes, the supplier of such
cigarettes, and the | ||
person or persons, if any, to whom such cigarettes have | ||
been
conveyed for resale; and a separate statement, signed | ||
by the individual under
penalty of perjury, which shall not | ||
be treated as confidential or exempt from
disclosure, | ||
separately identifying the brands and brand styles of such
| ||
cigarettes;
and
| ||
(3) a statement, signed by an officer of the | ||
manufacturer or importer
under penalty of perjury, | ||
certifying that the manufacturer or importer has
complied | ||
with:
| ||
(A) the package health warning and ingredient | ||
reporting
requirements of the federal Cigarette | ||
Labeling and Advertising Act, 15
U.S.C. 1333 and 1335a, | ||
with respect to such cigarettes; and
| ||
(B) the provisions of Exhibit T of the Master | ||
Settlement Agreement
entered in
the case of People of | ||
the State of Illinois v. Philip Morris, et al. (Circuit
| ||
Court of Cook County, No. 96-L13146), including a | ||
statement
indicating whether the manufacturer is, or | ||
is not, a participating tobacco
manufacturer within | ||
the meaning of Exhibit T.
| ||
(c) Administrative sanctions.
| ||
(1) Upon finding that a distributor has committed any | ||
of the acts
prohibited by
subsection
(a), knowing or having | ||
reason to know that he or she has done so, or has failed
to | ||
comply
with any requirement of subsection (b), the | ||
Department
may revoke or suspend the license or licenses of | ||
any
distributor pursuant to the procedures set forth in | ||
Section 6 and impose on the
distributor a civil penalty in | ||
an amount not to exceed the greater of 500% of
the
retail | ||
value of the cigarettes involved or $5,000.
| ||
(2) Cigarettes that are acquired, held, owned, | ||
possessed, transported in,
imported into, or sold or | ||
distributed in this State in violation of this
Section | ||
shall be deemed contraband under this Act and are subject | ||
to seizure
and forfeiture as provided in this Act, and all | ||
such cigarettes seized and
forfeited shall be destroyed. | ||
Such cigarettes shall be deemed contraband
whether the | ||
violation of this Section is knowing or otherwise.
| ||
(d) Unfair trade practices. A violation of subsection (a) | ||
or subsection
(b) of this Section shall constitute an unlawful | ||
practice as provided in the
Consumer Fraud and Deceptive | ||
Business Practices Act.
| ||
(e) Unfair cigarette sales. For purposes of the Trademark | ||
Registration and
Protection Act and the Counterfeit Trademark | ||
Act, cigarettes imported or
reimported into the United States | ||
for sale or distribution under any trade
name, trade dress, or | ||
trademark that is the same as, or is confusingly similar
to, | ||
any trade name, trade dress, or trademark used for cigarettes | ||
manufactured
in the United States for sale or distribution in | ||
the United States shall be
presumed to have been purchased | ||
outside of the ordinary channels of trade.
| ||
(f) General provisions.
| ||
(1) This Section shall be enforced by the Department; | ||
provided that, at
the request of the Director of Revenue or | ||
the Director's duly authorized agent,
the State police and | ||
all local police authorities shall enforce the provisions
| ||
of this Section. The Attorney General has concurrent power | ||
with the State's
Attorney of any county to enforce this | ||
Section.
| ||
(2) For the purpose of enforcing this Section, the | ||
Director of Revenue and
any agency to which the Director | ||
has delegated enforcement
responsibility pursuant to | ||
subdivision (f)(1) may request information from any
State | ||
or local agency and may share information with and request | ||
information
from any federal agency and any agency of any | ||
other state or any local agency
of any other state.
| ||
(3) In addition to any other remedy provided by law, | ||
including
enforcement as provided in subdivision (a)(1), | ||
any person may bring an action
for appropriate injunctive | ||
or other equitable relief for a violation of this
Section; | ||
actual damages, if any, sustained by reason of the | ||
violation; and, as
determined by the court, interest on the | ||
damages from the date of the
complaint, taxable costs, and | ||
reasonable attorney's fees. If the trier of fact
finds that | ||
the violation is flagrant, it may increase recovery to an | ||
amount not
in excess of 3 times the actual damages | ||
sustained by reason of the violation.
| ||
(g) Definitions. As used in this Section:
| ||
"Importer" means that term as defined in 26 U.S.C. 5702(1).
| ||
"Package" means that term as defined in 15 U.S.C. 1332(4).
| ||
(h) Applicability.
| ||
(1) This Section does not apply to:
| ||
(A) cigarettes allowed to be imported or brought | ||
into the United
States for personal use; and
| ||
(B) cigarettes sold or intended to be sold as | ||
duty-free merchandise
by a duty-free sales enterprise | ||
in accordance with the provisions of 19
U.S.C. 1555(b) | ||
and any implementing regulations; except that this | ||
Section
shall apply to any such cigarettes that are | ||
brought back into the customs
territory for resale | ||
within the customs territory.
| ||
(2) The penalties provided in this Section are in | ||
addition to any other
penalties imposed under other | ||
provision of law.
| ||
(Source: P.A. 91-810, eff. 6-13-00.)
| ||
(35 ILCS 130/3-15 new) | ||
Sec. 3-15. Criminal penalties. | ||
(1) Fraudulent offenses. Whoever intentionally fails to | ||
comply with any of the requirements of this Act or regulations | ||
prescribed hereunder shall, in addition to any other penalty | ||
provided in this Act, for each such offense, be guilty of a | ||
Class 3 felony. | ||
(2) Knowing offenses. Whoever, knowingly violates any of | ||
the requirements of this Act or regulations prescribed | ||
hereunder shall, in addition to any other penalty provided in | ||
this Act, for each such offense, be guilty of a Class 4 felony. | ||
(3) Penalties for contraband. Notwithstanding any other | ||
provision of law, the possession for sale of contraband | ||
cigarettes by a manufacturer, distributor, or retailer shall be | ||
punishable as follows: | ||
(A) A person who commits a first knowing violation | ||
shall be guilty of a Class 4 felony. | ||
(B) A person who commits a subsequent knowing violation | ||
shall be guilty of a Class 3 felony and shall have his or | ||
her license, permit, or certificate of registration | ||
revoked by the Department. In no case shall the fine | ||
imposed under this paragraph exceed ten times the retail | ||
value of the cigarettes. | ||
(4) For purposes of this Section, the term contraband | ||
cigarettes includes cigarettes that have false manufacturing | ||
labels or packs of cigarettes bearing counterfeit tax stamps. | ||
Any contraband cigarette seized by this State shall be | ||
destroyed. The Department may, prior to any destruction of | ||
cigarettes, permit the true holder of the trademark rights in | ||
the cigarette brand to inspect such contraband cigarettes, in | ||
order to assist the Department in any investigation regarding | ||
such cigarettes. | ||
(5) The penalties provided in paragraph (3) shall not apply | ||
where a licensed distributor is in possession of contraband | ||
cigarettes as a result of such cigarettes being returned to the | ||
distributor by a retailer if such distributor promptly notified | ||
appropriate law enforcement authorities. | ||
(6) Criminal forfeiture. | ||
(A) Notwithstanding any other provision of law, the | ||
knowing possession for sale of contraband cigarettes by a | ||
manufacturer, distributor, or retailer shall, after notice | ||
and hearing, result in the forfeiture to this State of the | ||
product and related machinery and equipment used in the | ||
production of contraband cigarettes, or to falsely mark | ||
cigarettes to reflect the payment of excise taxes. | ||
(B) The knowing sale or possession for sale of | ||
contraband cigarettes shall, after
notice and hearing, | ||
result in the seizure of all related machinery and | ||
equipment. | ||
(C) All cigarettes forfeited to this State under this | ||
Section shall be destroyed. The
Department may, prior to | ||
any destruction of cigarettes, permit the true holder of | ||
the trademark rights in the cigarette brand to inspect such | ||
contraband cigarettes, in order to assist the Department in | ||
any investigation regarding such cigarettes.
| ||
(35 ILCS 130/4) (from Ch. 120, par. 453.4)
| ||
Sec. 4. Distributor's license. No person may engage in | ||
business as a distributor of cigarettes in this
State within | ||
the meaning of the first 2 definitions of distributor in
| ||
Section 1 of this Act without first having obtained a license | ||
therefor from
the Department. Application for license shall be | ||
made to the Department in
form as furnished and prescribed by | ||
the Department. Each applicant for a
license under this Section | ||
shall furnish to the Department on the form
signed and verified | ||
by the applicant under penalty of perjury the following | ||
information:
| ||
(a) The name and address of the applicant;
| ||
(b) The address of the location at which the applicant | ||
proposes to
engage in business as a distributor of | ||
cigarettes in this State;
| ||
(c) Such other additional information as the | ||
Department may lawfully
require by its rules and | ||
regulations.
| ||
The annual license fee payable to the Department for each | ||
distributor's
license shall be $250. The purpose of such annual | ||
license fee is to defray
the cost, to the Department, of
| ||
serializing cigarette tax stamps. Each applicant for license | ||
shall pay such
fee to the Department at the time of submitting | ||
his application for license
to the Department.
| ||
Every applicant who is required to procure a distributor's | ||
license shall
file with his application a joint and several | ||
bond. Such 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,
in the | ||
amount of $2,500, conditioned upon the true and faithful | ||
compliance
by the licensee with all of the provisions of this | ||
Act. Such bond, or a
reissue thereof, or a substitute therefor, | ||
shall be kept in effect during
the entire period covered by the | ||
license. A separate application for
license shall be made, a | ||
separate annual license fee paid, and a separate
bond filed, | ||
for each place of business at which a person who is required to
| ||
procure a distributor's license under this Section proposes to | ||
engage in
business as a distributor in Illinois under this Act.
| ||
The following are ineligible to receive a distributor's | ||
license under
this Act:
| ||
(1) a person who is not of good character and | ||
reputation in the
community in which he resides;
| ||
(2) a person who has been convicted of a felony | ||
under any Federal or
State law, if the Department, | ||
after investigation and a hearing, if
requested by the | ||
applicant, determines that such person has not been
| ||
sufficiently rehabilitated to warrant the public | ||
trust;
| ||
(3) a corporation, if any officer, manager or | ||
director thereof, or any
stockholder or stockholders | ||
owning in the aggregate more than 5% of the
stock of | ||
such corporation, would not be eligible to receive a | ||
license under
this Act for any reason. | ||
(4) a person, or any person who owns more than 15 | ||
percent of the ownership interests in a person or a | ||
related party who: | ||
(a) owes, at the time of application, $500 or | ||
more in delinquent cigarette taxes that have been | ||
determined by law to be due and unpaid, unless the | ||
license applicant has entered into an agreement | ||
approved by the Department to pay the amount due; | ||
(b) had a license under this Act revoked within | ||
the past two years by the Department for willful | ||
misconduct relating to stolen or contraband | ||
cigarettes or has been convicted of a State or | ||
federal crime, punishable by imprisonment of one | ||
year or more, relating to stolen or contraband | ||
cigarettes; | ||
(c) is a distributor who manufactures | ||
cigarettes who is neither (i) a participating | ||
manufacturer as defined in subsection II(jj) of | ||
the "Master Settlement Agreement" as defined in | ||
Sections 10 of the Tobacco Products Manufacturers' | ||
Escrow Act and the Tobacco Products Manufacturers' | ||
Escrow Enforcement Act of 2003 (30 ILCS 168/10 and | ||
30 ILCS 167/10); nor (ii) in full compliance with | ||
Tobacco Products Manufacturers' Escrow Act and the | ||
Tobacco Products Manufacturers' Escrow Enforcement | ||
Act of 2003 (30 ILCS 168/ and 30 ILCS 167/); | ||
(d) has been found to have willfully imported | ||
or caused to be imported into the United States for | ||
sale or distribution any cigarette in violation of | ||
19 U.S.C. 1681a; | ||
(e) has been found to have willfully imported | ||
or caused to be imported into the United States for | ||
sale or distribution or manufactured for sale or | ||
distribution in the United States any cigarette | ||
that does not fully comply with the Federal | ||
Cigarette Labeling and Advertising Act (15 U.S.C. | ||
1331, et seq.); or | ||
(f) has willfully made a material false | ||
statement in the application or has willfully | ||
failed to produce records required to be | ||
maintained by this Act.
| ||
The Department, upon receipt of an application, license fee | ||
and bond in
proper form, from a person who is eligible to | ||
receive a distributor's
license under this Act, shall issue to | ||
such applicant a license in form as
prescribed by the | ||
Department, which license shall permit the applicant to
which | ||
it is issued to engage in business as a distributor at the | ||
place
shown in his application. All licenses issued by the | ||
Department under this
Act shall be valid for not to exceed one | ||
year after issuance unless sooner
revoked, canceled or | ||
suspended as provided in this Act. No license issued
under this | ||
Act is transferable or assignable. Such license shall be
| ||
conspicuously displayed in the place of business conducted by | ||
the licensee
in Illinois under such license. No distributor | ||
licensee acquires any vested interest or compensable property | ||
right in a license issued under this Act. | ||
A licensed distributor shall notify the Department of any | ||
change in the information contained on the application form, | ||
including any change in ownership and shall do so within 30 | ||
days after any such change.
| ||
Any person aggrieved by any decision of the Department | ||
under this Section
may, within 20 days after notice of the | ||
decision, protest and request a
hearing. Upon receiving a | ||
request for a hearing, the Department shall give
notice to the | ||
person requesting the hearing of the time and place fixed for | ||
the
hearing and shall 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 a | ||
protest and request for a hearing within 20 days, the
| ||
Department's decision shall become final without any further | ||
determination
being made or notice given.
| ||
(Source: P.A. 91-901, eff. 1-1-01; 92-322, eff. 1-1-02.)
| ||
(35 ILCS 130/4d new) | ||
Sec. 4d. Transactions only with licensed distributors, | ||
out-of-state manufacturers holding a permit, and retailers | ||
holding a certificate of registration. A distributor or | ||
manufacturer may sell or distribute cigarettes to a person | ||
located or doing business within this State only if such person | ||
is a licensed distributor or a retailer holding a certificate | ||
of registration. A retailer may only sell cigarettes obtained | ||
from a licensed distributor or an out-of-state manufacturer | ||
holding a permit.
| ||
(35 ILCS 130/20) (from Ch. 120, par. 453.20)
| ||
Sec. 20. Whenever any peace officer of the State or any | ||
duly authorized
officer or employee of the Department shall | ||
have reason to believe that any
violation of this Act has | ||
occurred and that the person so violating the
Act has in his, | ||
her or its possession any original package of cigarettes,
not | ||
tax stamped or tax imprinted underneath the sealed transparent | ||
wrapper
of such original package as required by this Act, or | ||
any vending device
containing such original packages to which | ||
stamps have not been affixed, or
on which an authorized | ||
substitute for stamps has not been imprinted
underneath the | ||
sealed transparent wrapper of such original packages, as
| ||
required by this Act, he may file or cause to be filed his | ||
complaint in
writing, verified by affidavit, with any court | ||
within whose jurisdiction
the premises to be searched are | ||
situated, stating the facts upon which such
belief is founded, | ||
the premises to be searched, and the property to be
seized, and | ||
procure a search warrant and execute the same. Upon the
| ||
execution of such search warrant, the peace officer, or officer | ||
or employee
of the Department, executing such search warrant | ||
shall make due return
thereof to the court issuing the same, | ||
together with an inventory of the
property taken thereunder. | ||
The court shall thereupon issue process against
the owner of | ||
such property if he is known; otherwise, such process shall be
| ||
issued against the person in whose possession the property so | ||
taken is
found, if such person is known. In case of inability | ||
to serve such process
upon the owner or the person in | ||
possession of the property at the time of
its seizure, as | ||
hereinbefore provided, notice of the proceedings before the
| ||
court shall be given as required by the statutes of the State | ||
governing
cases of Attachment. Upon the return of the process | ||
duly served or upon the
posting or publishing of notice made, | ||
as hereinabove provided, the court or
jury, if a jury shall be | ||
demanded, shall proceed to determine whether or
not such | ||
property so seized was held or possessed in violation of this | ||
Act,
or whether, if a vending device has been so seized, it | ||
contained at the
time of its seizure original packages not tax | ||
stamped or tax imprinted
underneath the sealed transparent | ||
wrapper of such original packages as
required by this Act. In | ||
case of a finding that the original packages
seized were not | ||
tax stamped or tax imprinted underneath the sealed
transparent | ||
wrapper of such original packages in accordance with the
| ||
provisions of this Act, or that any vending device so seized | ||
contained at
the time of its seizure original packages not tax | ||
stamped or tax imprinted
underneath the sealed transparent | ||
wrapper of such original packages in
accordance with the | ||
provisions of this Act, judgment shall be entered
confiscating | ||
and forfeiting the property to the State and ordering its
| ||
delivery to the Department, and in addition thereto, the court | ||
shall have
power to tax and assess the costs of the | ||
proceedings.
| ||
When any original packages or any cigarette vending device | ||
shall have
been declared forfeited to the State by any court, | ||
as hereinbefore
provided, and when such confiscated and | ||
forfeited property shall have been
delivered to the Department, | ||
as provided in this Act, the said Department
shall destroy sell | ||
such property. The Department may, prior to any destruction of | ||
cigarettes, permit the true holder of the trademark rights in | ||
the cigarette brand to inspect such contraband cigarettes, in | ||
order to assist the Department in any investigation regarding | ||
such cigarettes. for the best price obtainable and shall | ||
forthwith
pay over the proceeds of such sale to the State | ||
Treasurer; provided,
however, that if the value of such | ||
property to be sold at any one time
shall be $500 or more, such | ||
property shall be sold only to the highest and
best bidder on | ||
such terms and conditions and on open competitive bidding
after | ||
public advertisement, in such manner and for such terms as the
| ||
Department, by rule, may prescribe.
| ||
Upon making such a sale of original packages of cigarettes | ||
which were
not tax stamped or tax imprinted underneath the | ||
sealed transparent wrapper
of such original packages as | ||
required by this Act, the Department shall
affix a distinctive | ||
stamp to each of the original packages so sold
indicating that | ||
the same are sold pursuant to the provisions of this
Section.
| ||
(Source: Laws 1965, p. 3707.)
| ||
(35 ILCS 130/21) (from Ch. 120, par. 453.21)
| ||
Sec. 21. Destruction or use of forfeited property. | ||
(a) When any original packages of cigarettes or
any | ||
cigarette vending device shall have been declared forfeited to | ||
the State by
the Department, as provided in Section 18a of this | ||
Act, and when all proceedings
for the judicial review of the | ||
Department's decision have terminated, the
Department shall, | ||
to the extent that its decision is sustained on review, | ||
destroy, or maintain and use such property in an undercover | ||
capacity, or sell
such property for the best price obtainable | ||
and shall forthwith pay over the
proceeds of such sale to the | ||
State Treasurer.
If the value of such property to be sold at | ||
any one time is
$500 or more, however,
such property shall be | ||
sold only to the highest and best bidder on
such terms and | ||
conditions and on open competitive bidding after public
| ||
advertisement, in such manner and for such terms as the | ||
Department, by
rule, may prescribe.
| ||
(b) The Department may, prior to any destruction of | ||
cigarettes, permit the true holder of the trademark rights in | ||
the cigarette brand to inspect such contraband cigarettes in | ||
order to assist the Department in any investigation regarding | ||
such cigarettes. If no complaint for review, as provided in | ||
Section 8 of
this Act, has been filed within the time required | ||
by the Administrative
Review Law, and if no stay order has been | ||
entered thereunder, the
Department shall proceed to sell the | ||
property for the
best price obtainable and shall forthwith pay | ||
over the proceeds of such
sale to the State Treasurer. If the | ||
value
of such property to be sold at any one time is $500
or | ||
more, however, such property
shall be sold only to the highest | ||
and best bidder on such terms and
conditions and on open | ||
competitive bidding after public
advertisement, in such manner | ||
and for such terms as the Department, by
rule, may prescribe.
| ||
(c) Upon making a sale of unstamped original packages of
| ||
cigarettes as provided in this Section, the Department shall | ||
affix
a distinctive stamp to each of the original packages so | ||
sold indicating
that the same are sold under this Section.
| ||
(d) Notwithstanding the foregoing, any cigarettes seized | ||
under
this Act or under the Cigarette Use Tax Act may, at the | ||
discretion of the
Director of Revenue, be distributed to any | ||
eleemosynary institution within
the State of Illinois.
| ||
(Source: P.A. 94-776, eff. 5-19-06.)
| ||
(35 ILCS 130/29.5 new)
| ||
Sec. 29.5. Rulemaking. Rulemaking authority to implement | ||
this amendatory Act of the 95th General Assembly, if any, is | ||
conditioned on the rules being adopted in accordance with all | ||
provisions of the Illinois Administrative Procedure Act and all | ||
rules and procedures of the Joint Committee on Administrative | ||
Rules; any purported rule not so adopted, for whatever reason, | ||
is unauthorized.
| ||
(35 ILCS 130/9c rep.)
| ||
(35 ILCS 130/28 rep.)
| ||
Section 10. The Cigarette Tax Act is amended by repealing | ||
Sections 9c and 28. | ||
Section 15. The Cigarette Use Tax Act is amended by | ||
changing Sections 1, 3-10, 4, 26, and 27 and by adding Sections | ||
3-15 and 35.5 as follows:
| ||
(35 ILCS 135/1) (from Ch. 120, par. 453.31)
| ||
Sec. 1. For the purpose of this Act, unless otherwise | ||
required by the
context:
| ||
"Use" means the exercise by any person of any right or | ||
power over
cigarettes incident to the ownership or possession | ||
thereof, other than the
making of a sale thereof in the course | ||
of engaging in a business of selling
cigarettes and shall | ||
include the keeping or retention of cigarettes for use.
| ||
"Brand Style" means a variety of cigarettes distinguished | ||
by the tobacco used, tar and nicotine content, flavoring used, | ||
size of the cigarette, filtration on the cigarette or | ||
packaging. | ||
"Cigarette" means any roll for smoking made wholly or in | ||
part of tobacco
irrespective of size or shape and whether or | ||
not such tobacco is flavored,
adulterated or mixed with any | ||
other ingredient, and the wrapper or cover of
which is made of | ||
paper or any other substance or material except tobacco.
| ||
"Contraband cigarettes" means: | ||
(a) cigarettes that do not bear a required tax stamp | ||
under this Act; | ||
(b) cigarettes for which any required federal taxes | ||
have not been paid; | ||
(c) cigarettes that bear a counterfeit tax stamp; | ||
(d) cigarettes that are manufactured, fabricated, | ||
assembled, processed, packaged, or labeled by any person | ||
other than (i) the owner of the trademark rights in the | ||
cigarette brand or (ii) a person that is directly or | ||
indirectly authorized by such owner; | ||
(e) cigarettes imported into the United States, or | ||
otherwise distributed, in violation of the federal | ||
Imported Cigarette Compliance Act of 2000 (Title IV of | ||
Public Law 106-476); or | ||
(f) cigarettes that have false manufacturing labels. | ||
"Person" means any natural individual, firm, partnership, | ||
association,
joint stock company, joint adventure, public or | ||
private corporation,
however formed, limited liability | ||
company, or a receiver, executor,
administrator, trustee, | ||
guardian or other representative appointed by order of
any | ||
court.
| ||
"Department" means the Department of Revenue.
| ||
"Sale" means any transfer, exchange or barter in any manner | ||
or by any
means whatsoever for a consideration, and includes | ||
and means all sales made
by any person.
| ||
"Original Package" means the individual packet, box or | ||
other container
whatsoever used to contain and to convey | ||
cigarettes to the consumer.
| ||
"Distributor" means any and each of the following:
| ||
a. Any person engaged in the business of selling | ||
cigarettes in this
State who brings or causes to be brought | ||
into this State from without this
State any original | ||
packages of cigarettes, on which original packages there
is | ||
no authorized evidence underneath a sealed transparent | ||
wrapper showing
that the tax liability imposed by this Act | ||
has been paid or assumed by the
out-of-State seller of such | ||
cigarettes, for sale in the course of such
business.
| ||
b. Any person who makes, manufactures or fabricates | ||
cigarettes in this
State for sale, except a person who | ||
makes, manufactures or fabricates
cigarettes for sale to | ||
residents incarcerated in penal institutions or resident
| ||
patients or a State-operated mental health facility.
| ||
c. Any person who makes, manufactures or fabricates | ||
cigarettes outside
this State, which cigarettes are placed | ||
in original packages contained in
sealed transparent | ||
wrappers, for delivery or shipment into this State, and
who | ||
elects to qualify and is accepted by the Department as a | ||
distributor
under Section 7 of this Act.
| ||
"Distributor" does not include any person who transfers | ||
cigarettes to a not-for-profit
research institution that | ||
conducts tests concerning the
health effects of tobacco | ||
products and who does not offer
the cigarettes for resale.
| ||
"Distributor maintaining a place of business in this | ||
State", or any like
term, means any distributor having or | ||
maintaining within this State,
directly or by a subsidiary, an | ||
office, distribution house, sales house,
warehouse or other | ||
place of business, or any agent operating within this
State | ||
under the authority of the distributor or its subsidiary,
| ||
irrespective of whether such place of business or agent is | ||
located here
permanently or temporarily, or whether such | ||
distributor or subsidiary is
licensed to transact business | ||
within this State.
| ||
"Business" means any trade, occupation, activity or | ||
enterprise engaged
in or conducted in this State for the | ||
purpose of selling cigarettes.
| ||
"Prior Continuous Compliance Taxpayer" means any person | ||
who is licensed
under this Act and who, having been a licensee | ||
for a continuous period of 5
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. Also, 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 of a
| ||
period of 5 consecutive years shall be considered to be a | ||
"prior
continuous compliance taxpayer". In calculating the | ||
consecutive period of
time described herein 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 1987 shall be
| ||
credited to any licensee who became licensed on or before the | ||
effective date
of this amendatory Act of 1987.
| ||
"Stamp" or "stamps" mean the indicia required to be affixed | ||
on a pack of cigarettes that evidence payment of the tax on | ||
cigarettes under Section 2 of this Act (35 ILCS 130/2), or the | ||
indicia used to indicate that the cigarettes are intended for a | ||
sale or distribution within this State that is exempt from | ||
State tax under any applicable provision of law. | ||
"Within this State" means within the exterior limits of the | ||
State of Illinois and includes all territory within these | ||
limits owned by or ceded to the United States of America. | ||
"Related party" means any person that is associated with | ||
any other person because he or she: | ||
(a) is an officer or director of a business; | ||
(b) is legally recognized as a partner in business; or | ||
(c) is directly or indirectly controlled by another. | ||
(Source: P.A. 95-462, eff. 8-27-07.)
| ||
(35 ILCS 135/3-10)
| ||
Sec. 3-10. Cigarette enforcement.
| ||
(a) Prohibitions. It is unlawful for any person:
| ||
(1) to sell or distribute in this State; to acquire, | ||
hold, own, possess,
or
transport, for sale or distribution | ||
in this State; or to import, or cause to be
imported into | ||
this State for sale or distribution in this State:
| ||
(A) any cigarettes the package of which:
| ||
(i) bears any statement, label, stamp, | ||
sticker, or notice
indicating that the | ||
manufacturer did not intend the cigarettes to be
| ||
sold, distributed, or used in the United States, | ||
including but not
limited to labels stating "For | ||
Export Only", "U.S. Tax Exempt",
"For Use Outside | ||
U.S.", or similar wording; or
| ||
(ii) does not comply with:
| ||
(aa) all requirements imposed by or | ||
pursuant to
federal law regarding warnings and | ||
other information on
packages of cigarettes | ||
manufactured, packaged, or imported
for sale, | ||
distribution, or use in the United States, | ||
including
but not limited to the precise | ||
warning labels specified in the
federal | ||
Cigarette Labeling and Advertising Act, 15 | ||
U.S.C.
1333; and
| ||
(bb) all federal trademark and copyright | ||
laws;
| ||
(B) any cigarettes imported into the United States | ||
in violation of
26 U.S.C. 5754 or any other federal | ||
law, or implementing federal
regulations;
| ||
(C) any cigarettes that such person otherwise | ||
knows or has reason
to know the manufacturer did not | ||
intend to be sold, distributed, or used in
the United | ||
States; or
| ||
(D) any cigarettes for which there has not been | ||
submitted to the
Secretary of the U.S. Department of | ||
Health and Human Services the list or
lists of the | ||
ingredients added to tobacco in the manufacture of the
| ||
cigarettes required by the federal Cigarette Labeling | ||
and Advertising Act,
15 U.S.C. 1335a;
| ||
(2) to alter the package of any cigarettes, prior to | ||
sale or distribution
to
the
ultimate consumer, so as to | ||
remove, conceal, or obscure:
| ||
(A) any statement, label, stamp, sticker, or | ||
notice described in
subdivision (a)(1)(A)(i) of this | ||
Section;
| ||
(B) any health warning that is not specified in, or | ||
does not conform
with the requirements of, the federal | ||
Cigarette Labeling and Advertising
Act, 15 U.S.C. | ||
1333; or
| ||
(3) to affix any stamp required pursuant to this Act to | ||
the package of any
cigarettes described in subdivision | ||
(a)(1) of this Section or altered in
violation of
| ||
subdivision (a)(2); or .
| ||
(4) to knowingly possess, or possess for sale, | ||
contraband cigarettes. | ||
(b) Documentation. On the first business day of each month, | ||
each person
licensed
to affix the State tax stamp to cigarettes | ||
shall file with the Department, for
all cigarettes
imported | ||
into the United States to which the person has affixed the tax | ||
stamp
in the
preceding month:
| ||
(1) a copy of:
| ||
(A) the permit issued pursuant to the Internal | ||
Revenue Code, 26
U.S.C. 5713, to the person importing | ||
the cigarettes into the United States
allowing the | ||
person to import the cigarettes; and
| ||
(B) the customs form containing, with respect to | ||
the cigarettes, the
internal revenue tax information | ||
required by the U.S. Bureau of Alcohol,
Tobacco and | ||
Firearms;
| ||
(2) a statement, signed by the person under penalty of | ||
perjury, which shall
be treated as confidential by the | ||
Department and exempt from disclosure under
the Freedom of | ||
Information Act, identifying the brand and brand styles of | ||
all such
cigarettes, the quantity of each brand style of | ||
such cigarettes, the supplier of such
cigarettes, and the | ||
person or persons, if any, to whom such cigarettes have | ||
been
conveyed for resale; and a separate statement, signed | ||
by the individual under
penalty of perjury, which shall not | ||
be treated as confidential or exempt from
disclosure, | ||
separately identifying the brands and brand styles of such
| ||
cigarettes;
and
| ||
(3) a statement, signed by an officer of the | ||
manufacturer or importer
under penalty of perjury, | ||
certifying that the manufacturer or importer has
complied | ||
with:
| ||
(A) the package health warning and ingredient | ||
reporting
requirements of the federal Cigarette | ||
Labeling and Advertising Act, 15
U.S.C. 1333 and 1335a, | ||
with respect to such cigarettes; and
| ||
(B) the provisions of Exhibit T of the Master | ||
Settlement Agreement
entered in
the case of People of | ||
the State of Illinois v. Philip Morris, et al. (Circuit
| ||
Court of Cook County, No. 96-L13146), including a | ||
statement
indicating whether the manufacturer is, or | ||
is not, a participating tobacco
manufacturer within | ||
the meaning of Exhibit T.
| ||
(c) Administrative sanctions.
| ||
(1) Upon finding that a distributor has committed any | ||
of the acts
prohibited by
subsection
(a), knowing or having | ||
reason to know that he or she has done so, or has failed
to | ||
comply
with any requirement of subsection (b), the | ||
Department may revoke or suspend
the
license or licenses of | ||
any
distributor pursuant to the procedures set forth in | ||
Section 6 and impose on the
distributor a civil penalty in | ||
an amount not to exceed the greater of 500% of
the
retail | ||
value of the cigarettes involved or $5,000.
| ||
(2) Cigarettes that are acquired, held, owned, | ||
possessed, transported in,
imported into, or sold or | ||
distributed in this State in violation of this
Section | ||
shall be deemed contraband under this Act and are subject | ||
to seizure
and forfeiture as provided in this Act, and all | ||
such cigarettes seized and
forfeited shall be destroyed. | ||
Such cigarettes shall be deemed contraband
whether the | ||
violation of this Section is knowing or otherwise.
| ||
(d) Unfair trade practices. A violation of subsection (a) | ||
or subsection
(b) of this Section shall constitute an unlawful | ||
practice as provided in the
Consumer Fraud and Deceptive | ||
Business Practices Act.
| ||
(e) Unfair cigarette sales. For purposes of the Trademark | ||
Registration and
Protection Act and the Counterfeit Trademark | ||
Act, cigarettes imported or
reimported into the United States | ||
for sale or distribution under any trade
name, trade dress, or | ||
trademark that is the same as, or is confusingly similar
to, | ||
any trade name, trade dress, or trademark used for cigarettes | ||
manufactured
in the United States for sale or distribution in | ||
the United States shall be
presumed to have been purchased | ||
outside of the ordinary channels of trade.
| ||
(f) General provisions.
| ||
(1) This Section shall be enforced by the Department; | ||
provided that, at
the request of the Director of Revenue or | ||
the Director's duly authorized agent,
the State police and | ||
all local police authorities shall enforce the provisions
| ||
of this Section. The Attorney General has concurrent power | ||
with the State's
Attorney of any county to enforce this | ||
Section.
| ||
(2) For the purpose of enforcing this Section, the | ||
Director of Revenue and
any agency to which the Director | ||
has delegated enforcement
responsibility pursuant to | ||
subdivision (f)(1) may request information from any
State | ||
or local agency and may share information with and request | ||
information
from any federal agency and any agency of any | ||
other state or any local agency
of any other state.
| ||
(3) In addition to any other remedy provided by law, | ||
including
enforcement as provided in subdivision (a)(1), | ||
any person may bring an action
for appropriate injunctive | ||
or other equitable relief for a violation of this
Section; | ||
actual damages, if any, sustained by reason of the | ||
violation; and, as
determined by the court, interest on the | ||
damages from the date of the
complaint, taxable costs, and | ||
reasonable attorney's fees. If the trier of fact
finds that | ||
the violation is flagrant, it may increase recovery to an | ||
amount not
in excess of 3 times the actual damages | ||
sustained by reason of the violation.
| ||
(g) Definitions. As used in this Section:
| ||
"Importer" means that term as defined in 26 U.S.C. 5702(1).
| ||
"Package" means that term as defined in 15 U.S.C. 1332(4).
| ||
(h) Applicability.
| ||
(1) This Section does not apply to:
| ||
(A) cigarettes allowed to be imported or brought | ||
into the United
States for personal use; and
| ||
(B) cigarettes sold or intended to be sold as | ||
duty-free merchandise
by a duty-free sales enterprise | ||
in accordance with the provisions of 19
U.S.C. 1555(b) | ||
and any implementing regulations; except that this | ||
Section
shall apply to any such cigarettes that are | ||
brought back into the customs
territory for resale | ||
within the customs territory.
| ||
(2) The penalties provided in this Section are in | ||
addition to any other
penalties imposed under other | ||
provision of law.
| ||
(Source: P.A. 91-810, eff. 6-13-00.)
| ||
(35 ILCS 135/3-15 new) | ||
Sec. 3-15. Criminal penalties. | ||
(1) Fraudulent offenses. Whoever intentionally fails to | ||
comply with any of the requirements of this Act or regulations | ||
prescribed hereunder shall, in addition to any other penalty | ||
provided in this Act, for each such offense, be guilty of a | ||
Class 3 felony. | ||
(2) Knowing offenses. Whoever, knowingly violates any of | ||
the requirements of this Act or regulations prescribed | ||
hereunder shall, in addition to any other penalty provided in | ||
this Act, for each such offense, be guilty of a Class 4 felony. | ||
(3) Penalties for contraband. Notwithstanding any other | ||
provision of law, the possession for sale of contraband | ||
cigarettes by a manufacturer, distributor, or retailer shall be | ||
punishable as follows: | ||
(A) A person who commits a first knowing violation | ||
shall be guilty of a Class 4 felony. | ||
(B) A person who commits a subsequent knowing violation | ||
shall be guilty of a Class 3 felony and shall have his or | ||
her license, permit, or certificate of registration | ||
revoked by the Department. In no case shall the fine | ||
imposed under this paragraph exceed ten times the retail | ||
value of the cigarettes. | ||
(4) For purposes of this Section, the term contraband | ||
cigarettes includes cigarettes that have false manufacturing | ||
labels or packs of cigarettes bearing counterfeit tax stamps. | ||
Any contraband cigarette seized by this State shall be | ||
destroyed. The Department may, prior to any destruction of | ||
cigarettes, permit the true holder of the trademark rights in | ||
the cigarette brand to inspect such contraband cigarettes, in | ||
order to assist the Department in any investigation regarding | ||
such cigarettes. | ||
(5) The penalties provided in paragraph (3) shall not apply | ||
where a licensed distributor is in possession of contraband | ||
cigarettes as a result of such cigarettes being returned to the | ||
distributor by a retailer if such distributor promptly notified | ||
appropriate law enforcement authorities. | ||
(6) Criminal forfeiture. | ||
(A) Notwithstanding any other provision of law, the | ||
knowing possession for sale of contraband cigarettes by a | ||
manufacturer, distributor, or retailer shall, after notice | ||
and hearing, result in the forfeiture to this State of the | ||
product and related machinery and equipment used in the | ||
production of contraband cigarettes, or to falsely mark | ||
cigarettes to reflect the payment of excise taxes. | ||
(B) The knowing sale or possession for sale of | ||
contraband cigarettes shall, after
notice and hearing, | ||
result in the seizure of all related machinery and | ||
equipment. | ||
(C) All cigarettes forfeited to this State under this | ||
Section shall be destroyed. The
Department may, prior to | ||
any destruction of cigarettes, permit the true holder of | ||
the trademark rights in the cigarette brand to inspect such | ||
contraband cigarettes, in order to assist the Department in | ||
any investigation regarding such cigarettes.
| ||
(35 ILCS 135/4) (from Ch. 120, par. 453.34)
| ||
Sec. 4. Distributor's license. A distributor maintaining a | ||
place of business in this State, if required
to procure a | ||
license or allowed to obtain a permit as a distributor under
| ||
the Cigarette Tax Act, need not obtain an additional license or | ||
permit
under this Act, but shall be deemed to be sufficiently | ||
licensed or
registered by virtue of his being licensed or | ||
registered under the
Cigarette Tax Act.
| ||
Every distributor maintaining a place of business in this | ||
State, if not
required to procure a license or allowed to | ||
obtain a permit as a
distributor under the Cigarette Tax Act, | ||
shall make a verified application
to the Department (upon a | ||
form prescribed and furnished by the Department)
for a license | ||
to act as a distributor under this Act. In completing such
| ||
application, the applicant shall furnish such information as | ||
the Department
may reasonably require.
| ||
The annual license fee payable to the Department for each | ||
distributor's
license shall be $250. The purpose of such annual | ||
license fee is to defray
the cost, to the Department, of
| ||
serializing cigarette tax stamps. The applicant for license | ||
shall pay such
fee to the Department at the time of submitting | ||
the application for license
to the Department.
| ||
Such applicant shall file, with his application, a joint | ||
and several
bond. Such 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, in the amount of $2,500, conditioned upon the
true | ||
and faithful compliance by the licensee with all of the | ||
provisions of
this Act. Such bond, or a reissue thereof, or a | ||
substitute therefor, shall
be kept in effect during the entire | ||
period covered by the license. A
separate application for | ||
license shall be made, a separate annual license
fee paid, and | ||
a separate bond filed, for each place of business at or from
| ||
which the applicant proposes to act as a distributor under this | ||
Act and for
which the applicant is not required to procure a | ||
license or allowed to
obtain a permit as a distributor under | ||
the Cigarette Tax Act.
| ||
The following are ineligible to receive a distributor's | ||
license under
this Act:
| ||
(1) a person who is not of good character and | ||
reputation in the
community in which he resides;
| ||
(2) a person who has been convicted of a felony under | ||
any Federal or
State law, if the Department, after | ||
investigation and a hearing, if
requested by the applicant, | ||
determines that such person has not been
sufficiently | ||
rehabilitated to warrant the public trust;
| ||
(3) a corporation, if any officer, manager or director | ||
thereof, or any
stockholder or stockholders owning in the | ||
aggregate more than 5% of the
stock of such corporation, | ||
would not be eligible to receive a license
hereunder for | ||
any reason.
| ||
(4) a person, or any person who owns more than 15 | ||
percent of the ownership interests in a person or a related | ||
party who: | ||
(a) owes, at the time of application, $500 or more | ||
in delinquent cigarette taxes that have been | ||
determined by law to be due and unpaid, unless the | ||
license applicant has entered into an agreement | ||
approved by the Department to pay the amount due; | ||
(b) had a license under this Act revoked within the | ||
past 2 years by the Department for willful misconduct | ||
relating to stolen or contraband cigarettes or has been | ||
convicted of a State or federal crime, punishable by | ||
imprisonment of one year or more, relating to stolen or | ||
contraband cigarettes; | ||
(c) is a distributor who manufactures cigarettes | ||
who is neither (i) a participating manufacturer as | ||
defined in subsection II(jj) of the "Master Settlement | ||
Agreement" as defined in Sections 10 of the Tobacco | ||
Products Manufacturers' Escrow Act and the Tobacco | ||
Products Manufacturers' Escrow Enforcement Act of 2003 | ||
(30 ILCS 168/10 and 30 ILCS 167/10); nor (ii) in full | ||
compliance with Tobacco Products Manufacturers' Escrow | ||
Act and the Tobacco Products Manufacturers' Escrow | ||
Enforcement Act of 2003 (30 ILCS 168/ and 30 ILCS | ||
167/); | ||
(d) has been found to have willfully imported or | ||
caused to be imported into the United States for sale | ||
or distribution any cigarette in violation of 19 U.S.C. | ||
1681a; | ||
(e) has been found to have willfully imported or | ||
caused to be imported into the United States for sale | ||
or distribution or manufactured for sale or | ||
distribution in the United States any cigarette that | ||
does not fully comply with the Federal Cigarette | ||
Labeling and Advertising Act (15 U.S.C. 1331, et seq.); | ||
or | ||
(f) has willfully made a material false statement | ||
in the application or has willfully failed to produce | ||
records required to be maintained by this Act. | ||
Upon approval of such application and bond and payment of | ||
the required
annual license fee, the Department shall issue a | ||
license to the applicant.
Such license shall permit the | ||
applicant to engage in business as a
distributor at or from the | ||
place shown in his application. All licenses
issued by the | ||
Department under this Act shall be valid for not to exceed
one | ||
year after issuance unless sooner revoked, canceled or | ||
suspended as in
this Act provided. No license issued under this | ||
Act is transferable or
assignable. Such license shall be | ||
conspicuously displayed at the place of
business for which it | ||
is issued.
| ||
Any person aggrieved by any decision of the Department | ||
under this Section
may, within 20 days after notice of the | ||
decision, protest and request a
hearing. Upon receiving a | ||
request for a hearing, the Department shall give
notice to the | ||
person requesting the hearing of the time and place fixed for | ||
the
hearing and shall 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 a | ||
protest and request for a hearing within 20 days, the
| ||
Department's decision shall become final without any further | ||
determination
being made or notice given.
| ||
(Source: P.A. 91-901, eff. 1-1-01; 92-322, eff. 1-1-02.)
| ||
(35 ILCS 135/26) (from Ch. 120, par. 453.56)
| ||
Sec. 26. Whenever any peace officer of the State or any | ||
duly authorized
officer or employee of the Department shall | ||
have reason to believe that any
violation of this Act has | ||
occurred and that the person so violating the Act
has in his, | ||
her or its possession any original package of cigarettes, not
| ||
tax stamped or tax imprinted underneath the sealed transparent | ||
wrapper of
such original packages, as required by this Act, or | ||
any vending device
containing such original packages to which | ||
stamps have not been affixed, or
on which an authorized | ||
substitute for stamps has not been imprinted
underneath the | ||
sealed transparent wrapper of such original packages, as
| ||
required by this Act, he may file or cause to be filed his | ||
complaint in
writing, verified by affidavit, with any circuit | ||
court within whose
jurisdiction the premises to be searched are | ||
situated, stating the facts
upon which such belief is founded, | ||
the premises to be searched, and the
property to be seized, and | ||
procure a search warrant and execute the same.
Upon the | ||
execution of such search warrant, the peace officer, or officer | ||
or
employee of the Department, executing such search warrant | ||
shall make due
return thereof to the court issuing the same, | ||
together with an inventory of
the property taken thereunder. | ||
The court shall thereupon issue process
against the owner of | ||
such property if he is known; otherwise, such process
shall be | ||
issued against the person in whose possession the property so
| ||
taken is found, if such person is known. In case of inability | ||
to serve such
process upon the owner or the person in | ||
possession of the property at the
time of its seizure, as | ||
hereinbefore provided, notice of the proceedings
before the | ||
court shall be given as required by the statutes of the State
| ||
governing cases of Attachment. Upon the return of the process | ||
duly served
or upon the posting or publishing of notice made, | ||
as hereinabove provided,
the court or jury, if a jury shall be | ||
demanded, shall proceed to determine
whether or not such | ||
property so seized was held or possessed in violation
of this | ||
Act, or whether, if a vending device has been so seized, it
| ||
contained at the time of its seizure original packages not tax | ||
stamped or
tax imprinted underneath the sealed transparent | ||
wrapper of such original
packages as required by this Act. In | ||
case of a finding that the original
packages seized were not | ||
tax stamped or tax imprinted underneath the sealed
transparent | ||
wrapper of such original packages in accordance with the
| ||
provisions of this Act, or that any vending device so seized | ||
contained at
the time of its seizure original packages not tax | ||
stamped or tax imprinted
underneath the sealed transparent | ||
wrapper of such original packages in
accordance with the | ||
provisions of this Act, judgment shall be entered
confiscating | ||
and forfeiting the property to the State and ordering its
| ||
delivery to the Department, and in addition thereto, the court | ||
shall have
power to tax and assess the costs of the | ||
proceedings.
| ||
When any original packages or any cigarette vending device | ||
shall have
been declared forfeited to the State by any court, | ||
as hereinbefore
provided, and when such confiscated and | ||
forfeited property shall have been
delivered to the Department, | ||
as provided in this Act, the said Department
shall destroy, or | ||
maintain and use such property in an undercover capacity. The | ||
Department may, prior to any destruction of cigarettes, permit | ||
the true holder of the trademark rights in the cigarette brand | ||
to inspect such contraband cigarettes, in order to assist the | ||
Department in any investigation regarding such cigarettes. , or | ||
sell such property for the best price obtainable and shall | ||
forthwith
pay over the proceeds of such sale to the State | ||
Treasurer; provided,
however, that if the value of such | ||
property to be sold at any one time
shall be $500 or more, such | ||
property shall be sold only to the highest and
best bidder on | ||
such terms and conditions and on open competitive bidding
after | ||
public advertisement, in such manner and for such terms as the
| ||
Department, by rule, may prescribe.
| ||
Upon making such a sale of original packages of cigarettes | ||
which were
not tax stamped or tax imprinted underneath the | ||
sealed transparent wrapper
of such original packages as | ||
required by this Act, the Department shall
affix a distinctive | ||
stamp to each of the original packages so sold
indicating that | ||
the same are sold pursuant to the provisions of this
Section.
| ||
(Source: P.A. 94-776, eff. 5-19-06.)
| ||
(35 ILCS 135/27) (from Ch. 120, par. 453.57)
| ||
Sec. 27. Destruction or use of forfeited property. When any | ||
original packages of cigarettes or any cigarette vending
device | ||
shall have been declared forfeited to the State by the | ||
Department,
as provided in Section 25 of this Act, and when all | ||
proceedings for the
judicial review of the Department's | ||
decision have terminated, the
Department shall, to the extent | ||
that its decision is sustained on review,
destroy, or maintain | ||
and use such property in an undercover capacity. The Department | ||
may, prior to any destruction of cigarettes, permit the true | ||
holder of the trademark rights in the cigarette brand to | ||
inspect such contraband cigarettes, in order to assist the | ||
Department in any investigation regarding such cigarettes. , or | ||
sell such property for the best price obtainable and shall | ||
forthwith pay
over the proceeds of such sale to the State | ||
Treasurer; provided, however,
that if the value of such | ||
property to be sold at any one time shall be Five
Hundred | ||
Dollars ($500) or more, such property shall be sold only to the
| ||
highest and best bidder on such terms and conditions and on | ||
open
competitive bidding after public advertisement, in such | ||
manner and for such
terms as the Department, by rule, may | ||
prescribe.
| ||
If no complaint for review, as provided in Section 21 of | ||
this Act, has
been filed within the time required by the | ||
"Administrative Review Law,"
and if no stay order has been | ||
entered thereunder, the Department shall
proceed to sell said | ||
property for the best price obtainable and shall
forthwith pay | ||
over the proceeds of such sale to the State Treasurer;
| ||
provided, however, that if the value of such property to be | ||
sold at any one
time shall be $500 or more, such property shall | ||
be
sold only to the highest and best bidder on such terms and | ||
conditions and
on open competitive bidding after public | ||
advertisement, in such manner and
for such terms as the | ||
Department, by rule, may prescribe.
| ||
Upon making a sale of unstamped original packages of | ||
cigarettes as
provided in this Section, the Department shall | ||
affix a distinctive stamp to
each of the original packages so | ||
sold indicating that the same are sold
pursuant to the | ||
provisions of this Section.
| ||
(Source: P.A. 94-776, eff. 5-19-06.)
| ||
(35 ILCS 135/35.5 new)
| ||
Sec. 35.5. Rulemaking. Rulemaking authority to implement | ||
this amendatory Act of the 95th General Assembly, if any, is | ||
conditioned on the rules being adopted in accordance with all | ||
provisions of the Illinois Administrative Procedure Act and all | ||
rules and procedures of the Joint Committee on Administrative | ||
Rules; any purported rule not so adopted, for whatever reason, | ||
is unauthorized. | ||
Section 20. The Prevention of Cigarette Sales to Minors Act | ||
is amended by changing Sections 5 and 10 and by adding Sections | ||
2, 6, 7, 8, 9, 20, 25, 30, and 35 as follows: | ||
(720 ILCS 678/2 new)
| ||
Sec. 2. Definitions. For the purpose of this Act: | ||
"Clear and conspicuous statement" means the statement is of | ||
sufficient type size to be clearly readable by the recipient of | ||
the communication. | ||
"Consumer" means an individual who acquires or seeks to | ||
acquire cigarettes for personal use. | ||
"Delivery sale" means any sale of cigarettes to a consumer | ||
if: | ||
(a) the consumer submits the order for such sale by | ||
means of a telephone or other method of voice transmission, | ||
the mails, or the Internet or other online service, or the | ||
seller is otherwise not in the physical presence of the | ||
buyer when the request for purchase or order is made; or | ||
(b) the cigarettes are delivered by use of a common | ||
carrier, private delivery
service, or the mails, or the | ||
seller is not in the physical presence of the buyer when | ||
the buyer obtains possession of the cigarettes. | ||
"Delivery service" means any person (other than a person | ||
that makes a delivery sale) who
delivers to the consumer the | ||
cigarettes sold in a delivery sale. | ||
"Department" means the Department of Revenue. | ||
"Government-issued identification" means a State driver's | ||
license, State identification card, passport, a military | ||
identification or an official naturalization or immigration | ||
document, such as an alien registration recipient card | ||
(commonly known as a "green card") or an immigrant visa. | ||
"Legal minimum age" means the minimum age at which an | ||
individual may legally purchase cigarettes within this State, | ||
as determined by either State or local government. | ||
"Mails" or "mailing" mean the shipment of cigarettes | ||
through the United States Postal Service. | ||
"Out-of-state sale" means a sale of cigarettes to a | ||
consumer located outside of this State where the consumer | ||
submits the order for such sale by means of a telephonic or | ||
other method of voice transmission, the mails or any other | ||
delivery service, facsimile transmission, or the Internet or | ||
other online service and where the cigarettes are delivered by | ||
use of the mails or other delivery service. | ||
"Person" means any individual, corporation, partnership, | ||
limited liability company, association, or other organization | ||
that engages in any for-profit or not-for-profit activities. | ||
"Shipping package" means a container in which packs or | ||
cartons of cigarettes are shipped in connection with a delivery | ||
sale. | ||
"Shipping documents" means bills of lading, air bills, or | ||
any other documents used to evidence the undertaking by a | ||
delivery service to deliver letters, packages, or other | ||
containers. | ||
"Within this State" means within the exterior limits of the | ||
State of Illinois and includes all territory within these | ||
limits owned by or ceded to the United States of America. | ||
(720 ILCS 678/5)
| ||
Sec. 5. Unlawful shipment or transportation of cigarettes. | ||
(a) It is unlawful for any person engaged in the business | ||
of selling cigarettes to ship or cause to be shipped any | ||
cigarettes unless the person shipping the cigarettes:
| ||
(1) is licensed as a distributor under either
the | ||
Cigarette Tax Act, or the Cigarette Use Tax Act; or
| ||
delivers the cigarettes to a distributor licensed under | ||
either the Cigarette Tax Act or the Cigarette Use Tax Act; | ||
or | ||
(2) ships them to an export warehouse proprietor | ||
pursuant to
Chapter 52 of the Internal Revenue Code, or an | ||
operator of
a customs bonded warehouse pursuant to Section | ||
1311 or
1555 of Title 19 of the United States Code.
| ||
For purposes of this subsection (a), a person is a licensed | ||
distributor if the person's name appears on a list of licensed | ||
distributors published by the Illinois Department of Revenue.
| ||
The term cigarette has the same meaning as defined in Section 1 | ||
of the Cigarette Tax Act and Section 1 of the Cigarette Use Tax | ||
Act.
Nothing in this Act prohibits a person licensed as a | ||
distributor under the Cigarette Tax Act or the Cigarette Use | ||
Tax Act from shipping or causing to be shipped any cigarettes | ||
to a registered retailer under the Retailers' Occupation Tax | ||
Act and the Cigarette Tax Act provided the cigarette tax or | ||
cigarette use tax has been paid.
| ||
(b) A common or contract carrier may transport cigarettes | ||
to any individual person in this State only if the carrier | ||
reasonably believes such cigarettes have been received from a | ||
person described in paragraph (a)(1). Common or contract | ||
carriers may make deliveries of cigarettes to licensed | ||
distributors described in paragraph (a)(1) of this Section. | ||
Nothing in this subsection (b) shall be construed to prohibit a | ||
person other than a common or contract carrier from | ||
transporting not more than 1,000 cigarettes at any one time to | ||
any person in this State.
| ||
(c) A common or contract carrier may not complete the | ||
delivery of any cigarettes to persons other than those | ||
described in paragraph (a)(1) of this Section without first | ||
obtaining from the purchaser an official written | ||
identification from any state or federal agency that displays | ||
the person's date of birth or a birth certificate that includes | ||
a reliable confirmation that the purchaser is at least 18 years | ||
of age; that the cigarettes purchased are not intended for | ||
consumption by an individual who is younger than 18 years of | ||
age; and a written statement signed by the purchaser that | ||
certifies the purchaser's address and that the purchaser is at | ||
least 18 years of age. The statement shall also confirm: (1) | ||
that the purchaser understands that signing another person's | ||
name to the certification is illegal; (2) that the sale of | ||
cigarettes to individuals under 18 years of age is illegal; and | ||
(3) that the purchase of cigarettes by individuals under 18 | ||
years of age is illegal under the laws of Illinois. | ||
(d) When a person engaged in the business of selling
| ||
cigarettes ships or causes to be shipped any cigarettes to any | ||
person in this State, other than in the cigarette | ||
manufacturer's or tobacco products manufacturer's original | ||
container or wrapping, the container or wrapping must be | ||
plainly and visibly marked with the word "cigarettes".
| ||
(e) When a peace officer of this State or any duly | ||
authorized officer or employee of the Illinois Department of | ||
Public Health or Department of Revenue discovers any cigarettes | ||
which have been or which are being shipped or transported in | ||
violation of this Section, he or she shall seize and take | ||
possession of the cigarettes, and the cigarettes shall be | ||
subject to a forfeiture action pursuant to the procedures | ||
provided under the Cigarette Tax Act or Cigarette Use Tax Act.
| ||
(Source: P.A. 93-960, eff. 8-20-04.) | ||
(720 ILCS 678/6 new)
| ||
Sec. 6. Prevention of delivery sales to minors. | ||
(a) No person shall make a delivery sale of cigarettes to | ||
any individual who is
under the legal minimum age. | ||
(b) Each person accepting a purchase order for a delivery | ||
sale shall comply with
the provisions of this Act and all other | ||
laws of this State generally applicable to sales of cigarettes | ||
that occur entirely within this State, including, but not | ||
limited to, those laws imposing: (i) excise taxes; (ii) sales | ||
taxes; (iii) license and revenue-stamping requirements; and | ||
(iv) escrow payment obligations. | ||
(720 ILCS 678/7 new)
| ||
Sec. 7. Age verification and shipping requirements to | ||
prevent delivery sales to minors. | ||
(a) No person, other than a delivery service, shall mail, | ||
ship, or otherwise cause to be delivered a shipping package in | ||
connection with a delivery sale unless the person: | ||
(1) prior to the first delivery sale to the prospective | ||
consumer, obtains
from the prospective consumer a written | ||
certification which includes a statement signed by the | ||
prospective consumer that certifies: | ||
(A) the prospective consumer's current address; | ||
and | ||
(B) that the prospective consumer is at least the | ||
legal minimum age; | ||
(2) informs, in writing, such prospective consumer | ||
that: | ||
(A) the signing of another person's name to the | ||
certification described in
this Section is illegal; | ||
(B) sales of cigarettes to individuals under the | ||
legal minimum age are
illegal; | ||
(C) the purchase of cigarettes by individuals | ||
under the legal minimum age
is illegal; and | ||
(D) the name and identity of the prospective | ||
consumer may be reported to
the state of the consumer's | ||
current address under the Act of October 19, 1949 (15 | ||
U.S.C. ยง 375, et seq.), commonly known as the Jenkins | ||
Act; | ||
(3) makes a good faith effort to verify the date of | ||
birth of the prospective
consumer provided pursuant to this | ||
Section by: | ||
(A) comparing the date of birth against a | ||
commercially available database
or | ||
(B) obtaining a photocopy or other image of a | ||
valid, government-issued
identification stating the | ||
date of birth or age of the prospective consumer; | ||
(4) provides to the prospective consumer a notice that | ||
meets the requirements of
subsection (b); | ||
(5) receives payment for the delivery sale from the | ||
prospective consumer by a
credit or debit card that has | ||
been issued in such consumer's name, or by a check or other | ||
written instrument in such consumer's name; and | ||
(6) ensures that the shipping package is delivered to | ||
the same address as is shown
on the government-issued | ||
identification or contained in the commercially available | ||
database. | ||
(b) The notice required under this Section shall include: | ||
(1) a statement that cigarette sales to consumers below | ||
the legal minimum age are
illegal; | ||
(2) a statement that sales of cigarettes are restricted | ||
to those consumers who
provide verifiable proof of age in | ||
accordance with subsection (a); | ||
(3) a statement that cigarette sales are subject to tax | ||
under Section 2 of the
Cigarette Tax Act (35 ILCS 130/2) | ||
and an explanation of how such tax has been, or is to be, | ||
paid with respect to such delivery sale. | ||
(c) A statement meets the requirement of this Section if: | ||
(1) the statement is clear and conspicuous; | ||
(2) the statement is contained in a printed box set | ||
apart from the other contents of
the communication; | ||
(3) the statement is printed in bold, capital letters; | ||
(4) the statement is printed with a degree of color | ||
contrast between the
background and the printed statement | ||
that is no less than the color contrast between the | ||
background and the largest text used in the communication; | ||
and | ||
(5) for any printed material delivered by electronic | ||
means, the statement appears
at both the top and the bottom | ||
of the electronic mail message or both the top and the | ||
bottom of the Internet website homepage. | ||
(d) Each person, other than a delivery service, who mails, | ||
ships, or otherwise causes to be delivered a shipping package | ||
in connection with a delivery sale shall: | ||
(1) include as part of the shipping documents a clear | ||
and conspicuous statement
stating: "Cigarettes: Illinois | ||
Law Prohibits Shipping to Individuals Under 18 and Requires | ||
the Payment of All Applicable Taxes"; | ||
(2) use a method of mailing, shipping, or delivery that | ||
requires a signature before
the shipping package is | ||
released to the consumer; and | ||
(3) ensure that the shipping package is not delivered | ||
to any post office box. | ||
(720 ILCS 678/8 new)
| ||
Sec. 8. Registration and reporting requirements to prevent | ||
delivery sales to minors. | ||
(a) Each person who makes a delivery sale of cigarettes to | ||
a consumer located within this
State shall file with the | ||
Department for each individual sale: | ||
(1) a statement setting forth such person's name, trade | ||
name, and the address of
such person's principal place of | ||
business and any other place of business; and | ||
(2) not later than the tenth day of each calendar | ||
month, a memorandum or copy of
the invoice for each and | ||
every such delivery sale made during the previous calendar | ||
month, which includes the following information: | ||
(A) the name and address of the consumer to whom | ||
such delivery sale
was made; | ||
(B) the brand style or brand styles of the | ||
cigarettes that were sold in such
delivery sale; | ||
(C) the quantity of cigarettes that were sold in | ||
such delivery sale; and | ||
(D) an indication of whether or not the cigarettes | ||
sold in the delivery sale
bore a tax stamp evidencing | ||
payment of the tax under Section 2 of the Cigarette Tax | ||
Act (35 ILCS 130/2). | ||
(b) Each person engaged in business within this State who | ||
makes an out-of-state sale
shall, for each individual sale, | ||
submit to the appropriate tax official of the state in which | ||
the consumer is located the information required in subsection | ||
(a). | ||
(c) Any person that satisfies the requirements of 15 U.S.C. | ||
Section 376 shall be deemed to
satisfy the requirements of | ||
subsections (a) and (b). | ||
(d) The Department is authorized to disclose to the | ||
Attorney General any information
received under this title and | ||
requested by the Attorney General. The Department and the | ||
Attorney General shall share with each other the information | ||
received under this title and may share the information with | ||
other federal, State, or local agencies for purposes of | ||
enforcement of this title or the laws of the federal government | ||
or of other states. | ||
(e) This Section shall not be construed to impose liability | ||
upon any delivery service, or
officers or employees thereof, | ||
when acting within the scope of business of the delivery | ||
service. | ||
(720 ILCS 678/9 new)
| ||
Sec. 9. Statements for delivery sales. | ||
(a) Each person who makes a delivery sale shall collect and | ||
remit to the Department all excise taxes imposed by this State | ||
with respect to such delivery sale and maintain evidence of | ||
such payment unless the person is located outside the State and | ||
includes a statement on the outside of the shipping package | ||
stating: "Illinois law requires the payment of state taxes on | ||
this shipment of cigarettes. You are legally responsible for | ||
all applicable unpaid state taxes on these cigarettes." | ||
(b) A statement meets the requirements of subsection (a) if | ||
the statement is: | ||
(1) clear and conspicuous; | ||
(2) contained in a printed box set apart from the | ||
shipping label and other markings
contained on the shipping | ||
package; | ||
(3) printed in bold, capital letters; | ||
(4) printed with a degree of color contrast between the | ||
background and the printed
statement that is no less than | ||
the color contrast between the background and the largest | ||
text used on the shipping label; and | ||
(5) located on the same side of the shipping package as | ||
the shipping label. | ||
(720 ILCS 678/10)
| ||
Sec. 10. Violation. | ||
(a) A person who violates subsection (a), (b), or (c) of | ||
Section 5 or Section 6, 7, 8, or 9 is guilty of a Class A | ||
misdemeanor. A second or subsequent violation of subsection | ||
(a), (b), or (c) of Section 5 or Section 6, 7, 8, or 9 is a | ||
Class 4 felony.
| ||
(b) The Department of Revenue shall impose a civil penalty | ||
not to exceed $5,000 on any person who violates subsection (a), | ||
(b), or (c) of Section 5 or Section 6, 7, 8, or 9. The | ||
Department of Revenue shall impose a civil penalty not to | ||
exceed $5,000 on any person engaged in the business of selling | ||
cigarettes who ships or causes to be shipped any such | ||
cigarettes to any person in this State in violation of | ||
subsection (d) of Section 5.
| ||
(c) All cigarettes sold or attempted to be sold in a | ||
delivery sale that does not meet the requirements of this Act | ||
shall be forfeited to the State. All cigarettes forfeited to | ||
this State under this Act shall be destroyed. The Department | ||
may, prior to any destruction of cigarettes, permit the true | ||
holder of the trademark rights in the cigarette brand to | ||
inspect such contraband cigarettes, in order to assist the | ||
Department in any investigation regarding such cigarettes. | ||
(d) (c) Any person aggrieved by any decision of the | ||
Department of Revenue may, within 60 days after notice of that | ||
decision, protest in writing and request a hearing. The | ||
Department of Revenue shall give notice to the person of the | ||
time and place for the hearing and shall hold a hearing before | ||
it issues a final administrative decision. Absent a written | ||
protest within 60 days, the Department's decision shall become | ||
final without any further determination made or notice given.
| ||
(Source: P.A. 93-960, eff. 8-20-04.) | ||
(720 ILCS 678/20 new)
| ||
Sec. 20. Tip line. | ||
(a) Not later than 120 days after the effective date of | ||
this amendatory Act of the 95th General Assembly, the | ||
Department shall establish, publicize, and maintain a | ||
toll-free telephone number to receive information related to | ||
the sale and delivery of contraband cigarettes. | ||
(b) The Attorney General may pay a reward of up to $5,000 | ||
to any person who furnishes information leading to the | ||
Department's collection of excise taxes imposed upon delivery | ||
sales which otherwise would not have been collected but for the | ||
information provided by the person. | ||
(720 ILCS 678/25 new)
| ||
Sec. 25. Construction. The requirements imposed by this Act | ||
shall not apply where such application would be contrary to the | ||
Constitution and laws of the United States. | ||
(720 ILCS 678/30 new)
| ||
Sec. 30. Severability. If any provision of this Act is for | ||
any reason held to be unconstitutional or invalid, such holding | ||
shall not affect the constitutionality or validity of the | ||
remaining provisions of this Act, and to this end the | ||
provisions of this Act are expressly declared to be severable. | ||
(720 ILCS 678/35 new)
| ||
Sec. 35. Rulemaking. Rulemaking authority to implement | ||
this amendatory Act of the 95th General Assembly, if any, is | ||
conditioned on the rules being adopted in accordance with all | ||
provisions of the Illinois Administrative Procedure Act and all | ||
rules and procedures of the Joint Committee on Administrative | ||
Rules; any purported rule not so adopted, for whatever reason, | ||
is unauthorized.
| ||
Section 99. Effective date. This Act takes effect January | ||
1, 2010.
| ||