35 ILCS 130/3

(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.

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 and transporters, as defined in Section 9c of this Act, may possess unstamped original packages of cigarettes.  Prior to shipment to a secondary distributor or an Illinois retailer, a stamp shall be applied to each original package of cigarettes sold to the secondary distributor or retailer. A distributor may apply tax stamps only to original packages of cigarettes purchased or obtained directly from an in-state maker, manufacturer, or fabricator licensed as a distributor under Section 4 of this Act or an out-of-state maker, manufacturer, or fabricator holding a permit under Section 4b of this Act.  A licensed distributor may ship or otherwise cause to be delivered unstamped original packages of cigarettes in, into, or from this State. A licensed distributor may transport unstamped original packages of cigarettes to a facility, wherever located, owned or controlled by such distributor; however, a distributor may not transport unstamped original packages of cigarettes to a facility where retail sales of cigarettes take place or to a facility where a secondary distributor makes sales for resale.  Any licensed distributor that ships or otherwise causes to be delivered unstamped original packages 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 consignor or seller, the true name and address of the consignee 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.

Except as otherwise provided in this Section, 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.  On and after July 1, 2013, protests concerning matters that are subject to the jurisdiction of the Illinois Independent Tax Tribunal shall be filed with the Tribunal in accordance with the Illinois Independent Tax Tribunal Act of 2012, and hearings on those matters shall be held before the Tribunal in accordance with that Act.  With respect to protests filed with the Department prior to July 1, 2013 that would otherwise be subject to the jurisdiction of the Illinois Independent Tax Tribunal, the taxpayer may elect to be subject to the provisions of the Illinois Independent Tax Tribunal Act of 2012 at any time on or after July 1, 2013, but not later than 30 days after the date on which the protest was filed.  If made, the election shall be irrevocable. 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