| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
| |||||||||||||||||||||||||
1 | AN ACT concerning revenue.
| ||||||||||||||||||||||||
2 | Be it enacted by the People of the State of Illinois,
| ||||||||||||||||||||||||
3 | represented in the General Assembly:
| ||||||||||||||||||||||||
4 | Section 5. The Cigarette Tax Act is amended by adding | ||||||||||||||||||||||||
5 | Section 3-3 as follows: | ||||||||||||||||||||||||
6 | (35 ILCS 130/3-3 new) | ||||||||||||||||||||||||
7 | Sec. 3-3. Digital tax stamps. | ||||||||||||||||||||||||
8 | (a) Within 180 days after the effective date of this | ||||||||||||||||||||||||
9 | amendatory Act of the 99th General Assembly, the Department | ||||||||||||||||||||||||
10 | shall issue a request for proposal to acquire and use digital | ||||||||||||||||||||||||
11 | stamps that contain a unique nonrepeating code that can be read | ||||||||||||||||||||||||
12 | by a device that identifies the taxed product and also contains | ||||||||||||||||||||||||
13 | other security and enforcement features as determined by the | ||||||||||||||||||||||||
14 | Department. The request for proposal shall include a provision | ||||||||||||||||||||||||
15 | that requires the successful bidder on the proposal to share | ||||||||||||||||||||||||
16 | digital stamp technology so that handheld devices, including, | ||||||||||||||||||||||||
17 | but not limited to, smartphones, can be readily utilized in | ||||||||||||||||||||||||
18 | furtherance of the implementation of the use of digital stamps, | ||||||||||||||||||||||||
19 | and so that the technology and equipment used by licensed | ||||||||||||||||||||||||
20 | distributors to affix the stamps to packages of cigarettes can | ||||||||||||||||||||||||
21 | be supplied, as may be permitted by the Department, by the | ||||||||||||||||||||||||
22 | successful bidder on the proposal or by any other provider. The | ||||||||||||||||||||||||
23 | request for proposal shall also include a provision permitting |
| |||||||
| |||||||
1 | the Department to manage or restrict access rights to all or | ||||||
2 | part of the information contained within, or accessible from, | ||||||
3 | the stamps and a provision requiring the successful bidder on | ||||||
4 | the proposal to guarantee that the stamps will be designed and | ||||||
5 | manufactured to ensure that stamps can be affixed to individual | ||||||
6 | packages of cigarettes in accordance with the requirements of | ||||||
7 | this Act. | ||||||
8 | (b) Upon implementation of the digital stamps as provided | ||||||
9 | in this amendatory Act of the 99th General Assembly, a stamp is | ||||||
10 | considered affixed if 90% or more of the stamp is affixed to | ||||||
11 | the individual package. | ||||||
12 | (c) Beginning in the first calendar month following the | ||||||
13 | implementation of the use of digital stamps as provided in this | ||||||
14 | Section, and continuing for the immediately succeeding 17 | ||||||
15 | months, licensed distributors are entitled to reimbursement of | ||||||
16 | direct costs actually incurred by the distributor, as | ||||||
17 | determined by the Department, for the initial purchase of | ||||||
18 | eligible equipment in an amount equal to 5.5% of the total net | ||||||
19 | purchase price of the eligible equipment necessary to affix the | ||||||
20 | digital stamp. The reimbursement provided under this | ||||||
21 | subsection shall also
include any applicable use or occupation | ||||||
22 | taxes paid, and shipping and
crating charges actually incurred, | ||||||
23 | by the distributor in
connection with the purchase, but shall
| ||||||
24 | exclude reimbursement for any other costs incurred by the | ||||||
25 | distributor that are not otherwise expressly provided for
in | ||||||
26 | this Section, including, but not limited to, charges for |
| |||||||
| |||||||
1 | installation and ongoing maintenance related to eligible | ||||||
2 | equipment. A distributor may only receive reimbursement under | ||||||
3 | this subsection to the extent that the eligible equipment | ||||||
4 | purchased by the distributor does not exceed the total number | ||||||
5 | of the distributor's existing equipment, as certified by the | ||||||
6 | distributor on a form prescribed by the Department. | ||||||
7 | The total reimbursement available under this subsection | ||||||
8 | shall not exceed $60,000 for all distributors combined. | ||||||
9 | (d) Beginning with the first calendar month following the | ||||||
10 | implementation of the use of digital stamps as provided in this | ||||||
11 | Section, a discount of 0.5% is allowed to each licensed | ||||||
12 | distributor until the licensed distributor is compensated in an | ||||||
13 | amount equal to the direct cost actually incurred by the | ||||||
14 | distributor for the purchase of upgrades to technology and | ||||||
15 | equipment, excluding the equipment reimbursed under subsection | ||||||
16 | (c) of this Section, that are necessary to affix the digital | ||||||
17 | stamp as determined by the Department. | ||||||
18 | Compensation under this subsection may also be
claimed by a | ||||||
19 | distributor for the direct costs actually incurred
by the | ||||||
20 | distributor, as determined by the Department and
reflected in | ||||||
21 | the net purchase price, for the initial and one-time
purchase | ||||||
22 | of case packers or similar machines or conveyors as
follows: | ||||||
23 | (1) case packers or similar machines to be used | ||||||
24 | exclusively to
repack cigarette cartons into case | ||||||
25 | boxes after digital stamps have
been applied by | ||||||
26 | eligible equipment to the individual packages of
|
| |||||||
| |||||||
1 | cigarettes contained within those cigarette cartons; | ||||||
2 | compensation
under this paragraph (1) may only be | ||||||
3 | claimed by a distributor if
the case packers or similar | ||||||
4 | machines are in addition to, and not a
replacement for, | ||||||
5 | one or more case packers or similar machines used in
| ||||||
6 | connection with cigarette stamping machines that do | ||||||
7 | not use digital stamps authorized under this Section; | ||||||
8 | (2) conveyors to be used exclusively for that | ||||||
9 | portion of a
cigarette stamping line that is necessary | ||||||
10 | for and dedicated to
cigarette stamping operations | ||||||
11 | using eligible equipment to affix digital stamps to | ||||||
12 | individual packages of cigarettes to be sold in
this | ||||||
13 | State; compensation under this paragraph may be
| ||||||
14 | claimed by a distributor only if the cigarette stamping | ||||||
15 | line served
by the conveyors is in addition to one or | ||||||
16 | more distinct and existing
cigarette stamping lines | ||||||
17 | using stamping machines that do not use
the digital | ||||||
18 | stamps authorized under this Section, and that | ||||||
19 | compensation
shall not exceed a total of 50% of the | ||||||
20 | amount reimbursed under
subsection (c) for any | ||||||
21 | particular distributor; and | ||||||
22 | (3) compensation under paragraphs (1) and (2) | ||||||
23 | shall also
include any applicable sales or use taxes | ||||||
24 | paid, and shipping and
crating charges actually | ||||||
25 | incurred, by the distributor in
connection with the | ||||||
26 | purchase, but shall exclude any other costs
incurred by |
| |||||||
| |||||||
1 | the distributor not otherwise expressly provided for
| ||||||
2 | in this subsection, including, but not limited to, | ||||||
3 | charges for
installation and ongoing maintenance. | ||||||
4 | (e) As used in this Section: | ||||||
5 | "Eligible equipment" means a cigarette tax stamping | ||||||
6 | machine that meets all of the following conditions: | ||||||
7 | (1) it was purchased by a licensed distributor on or | ||||||
8 | after December 31, 2014; | ||||||
9 | (2) it enables the distributor to affix digital stamps | ||||||
10 | to individual packages of cigarettes in accordance with the | ||||||
11 | requirements of this Act; and | ||||||
12 | (3) it was purchased to be used for the primary purpose | ||||||
13 | of permitting the distributor to affix digital stamps to | ||||||
14 | individual packages of cigarettes to be sold in this State | ||||||
15 | following the implementation of the use of digital stamps | ||||||
16 | under this Section. | ||||||
17 | "Existing equipment" means a cigarette tax stamping | ||||||
18 | machine that meets all of the following conditions: | ||||||
19 | (1) it was owned by a licensed distributor as of | ||||||
20 | December 31, 2014; and | ||||||
21 | (2) it was a cigarette tax stamping machine used prior | ||||||
22 | to January 1, 2015 by the distributor to apply stamps using | ||||||
23 | stamp rolls of 30,000 stamps. | ||||||
24 | "Qualified Equipment" means equipment that was placed in | ||||||
25 | service by a distributor during the first 8 months of digital | ||||||
26 | stamp implementation that includes conveyors and additional |
| |||||||
| |||||||
1 | associated electrical lines and compressed air lines in | ||||||
2 | connection with the implementation of a digital stamping line | ||||||
3 | approved by the Department. "Qualified equipment" does not | ||||||
4 | include the cost of installation of a conveyor. | ||||||
5 | "Smartphone" means a device that combines a cell phone with | ||||||
6 | a handheld computer and is capable of internet access, which | ||||||
7 | allows a user, in conjunction with an encrypted digital tax | ||||||
8 | stamp, to open a public portal.
|