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Public Act 91-0246
HB1110 Enrolled LRB9102398PTpkA
AN ACT concerning cigarettes.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Cigarette Tax Act is amended by changing
Section 3 as follows:
(35 ILCS 130/3) (from Ch. 120, par. 453.3)
Sec. 3. 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.
The Department, or any person authorized by the
Department, shall sell such stamps only to persons holding
valid licenses as distributors under this Act.
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, 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: 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.
(Source: P.A. 85-415.)
Section 10. The Cigarette Use Tax Act is amended by
changing Section 3 as follows:
(35 ILCS 135/3) (from Ch. 120, par. 453.33)
Sec. 3. Stamp payment. The tax hereby imposed shall be
collected by a distributor maintaining a place of business in
this State or a distributor authorized by the Department
pursuant to Section 7 hereof to collect the tax, and the
amount of the tax shall be added to the price of the
cigarettes sold by such distributor. Collection of the tax
shall be evidenced by a stamp or stamps affixed to each
original package of cigarettes or by an authorized substitute
for such stamp imprinted on each original package of such
cigarettes underneath the sealed transparent outside wrapper
of such original package, except as hereinafter provided.
Each distributor who is required or authorized to collect the
tax herein imposed, before delivering or causing to be
delivered any original packages of cigarettes in this State
to any purchaser, shall firmly affix a proper stamp or stamps
to each such package, or (in the 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. Such stamp or stamps
need not be affixed to the original package of any cigarettes
with respect to which the distributor is required to affix a
like stamp or stamps by virtue of the Cigarette Tax Act,
however, and no tax imprint need be placed underneath the
sealed transparent wrapper of an original package of
cigarettes with respect to which the distributor is required
or authorized to employ a like tax imprint by virtue of the
Cigarette Tax Act.
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.
Stamps, when required hereunder, shall be purchased from
the Department, or any person authorized by the Department,
by distributors.
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 the
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, 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: 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.
At the time of purchasing such stamps from the Department
when purchase is required by this Act, or at the time when
the tax which he has collected is remitted by a distributor
to the Department without the purchase of stamps from the
Department when that method of remitting the tax that has
been collected is required or authorized by this Act, the
distributor shall be allowed a discount during any year
commencing July 1 and ending the following June 30 in
accordance with the schedule set out hereinbelow, from the
amount to be paid by him to the Department for such stamps,
or to be paid by him to the Department on the basis of
monthly remittances (as the case may be), to cover the cost,
to such distributor, of collecting the tax herein imposed by
affixing such stamps to the original packages of cigarettes
sold by such distributor or by placing tax imprints
underneath the sealed transparent wrapper of original
packages of cigarettes sold by such distributor (as the case
may be): (1) Prior to December 1, 1985, a discount equal to
1-2/3% of the amount of the tax up to and including the first
$700,000 paid hereunder by such distributor to the Department
during any such year; 1-1/3% of the next $700,000 of tax or
any part thereof, paid hereunder by such distributor to the
Department during any such year; 1% of the next $700,000 of
tax, or any part thereof, paid hereunder by such distributor
to the Department during any such year; and 2/3 of 1% of the
amount of any additional tax paid hereunder by such
distributor to the Department during any such year or (2) On
and after December 1, 1985, a discount equal to 1.75% of the
amount of the tax payable under this Act up to and including
the first $3,000,000 paid hereunder by such distributor to
the Department during any such year and 1.5% of the amount of
any additional tax paid hereunder by such distributor to the
Department during any such year.
Two or more distributors that use a common means of
affixing revenue tax stamps or that are owned or controlled
by the same interests shall be treated as a single
distributor for the purpose of computing the discount.
Cigarette manufacturers who are distributors under this
Act, and who place their cigarettes in original packages
which are contained inside a sealed transparent wrapper,
shall be required to remit the tax which they are required to
collect under this Act to the Department by remitting the
amount thereof to the Department by the 5th day of each
month, covering cigarettes shipped or otherwise delivered to
points in Illinois to purchasers during the preceding
calendar month, but a distributor need not remit to the
Department the tax so collected by him from purchasers under
this Act to the extent to which such distributor is required
to remit the tax imposed by the Cigarette Tax Act to the
Department with respect to the same cigarettes. All taxes
upon cigarettes under this Act are a direct tax upon the
retail consumer and shall conclusively be presumed to be
precollected for the purpose of convenience and facility
only. Distributors who are 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 collect and
remit the tax 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 prescribe; provided (as stated hereinbefore) that this
requirement does not apply when such distributor is required
or authorized by the Cigarette Tax Act to place the tax
imprint provided for in the last paragraph of Section 3 of
that Act underneath the sealed transparent wrapper of such
original package of cigarettes. Such imprinted language shall
acknowledge the manufacturer's collection and payment of or
liability for the tax imposed by this Act with respect to
such cigarettes.
The Department shall adopt the design or designs of the
tax stamps and shall procure the printing of such stamps in
such amounts and denominations as it deems necessary to
provide for the affixation of the proper amount of tax stamps
to each original package of cigarettes.
Where tax stamps are required, 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 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.
The tax hereby imposed and not paid pursuant to this
Section shall be paid to the Department directly by any
person using such cigarettes within this State, pursuant to
Section 12 hereof.
(Source: P.A. 85-415.)
Section 99. Effective date. This Act takes effect upon
becoming law.
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