103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2780

 

Introduced 2/16/2023, by Rep. Robert "Bob" Rita

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 143/10-5
35 ILCS 143/10-10
35 ILCS 143/10-23 new
35 ILCS 143/10-30
35 ILCS 143/10-35

    Amends the Tobacco Products Tax Act of 1995. Provides that, beginning on January 1, 2022, the tax per cigar or other rolled tobacco product shall not exceed $0.50 per cigar or roll. Provides that distributors are allowed a discount in the amount of 2% of the distributor's tax liability, but not to exceed $2,000 per return. Provides that certain remote retail sellers are liable for the payment of the tax under the Act. Sets forth the tax rate for remote retail sellers. Provides that remote retail sellers must obtain a license from the Department of Revenue. Effective immediately.


LRB103 30353 HLH 56783 b

 

 

A BILL FOR

 

HB2780LRB103 30353 HLH 56783 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Tobacco Products Tax Act of 1995 is amended
5by changing Sections 10-5, 10-10, 10-30, and 10-35 and by
6adding Section 10-23 as follows:
 
7    (35 ILCS 143/10-5)
8    Sec. 10-5. Definitions. For purposes of this Act:
9    "Actual cost" means the actual price paid by a remote
10retail seller for a particular SKU.
11    "Actual cost list" means the average of the actual price
12paid by a remote retail seller for a particular SKU over the 12
13calendar months immediately preceding January 1 of the
14calendar year in which the sale occurs.
15    "Business" means any trade, occupation, activity, or
16enterprise engaged in, at any location whatsoever, for the
17purpose of selling tobacco products.
18    "Cigar" means any roll of tobacco wrapped in leaf tobacco
19or in any substance containing tobacco, but does not include a
20little cigar or any item that is considered a cigarette under
21Section 1 of the Cigarette Tax Act.
22    "Cigarette" has the meaning ascribed to the term in
23Section 1 of the Cigarette Tax Act.

 

 

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1    "Contraband little cigar" means:
2        (1) packages of little cigars containing 20 or 25
3    little cigars that do not bear a required tax stamp under
4    this Act;
5        (2) packages of little cigars containing 20 or 25
6    little cigars that bear a fraudulent, imitation, or
7    counterfeit tax stamp;
8        (3) packages of little cigars containing 20 or 25
9    little cigars that are improperly tax stamped, including
10    packages of little cigars that bear only a tax stamp of
11    another state or taxing jurisdiction; or
12        (4) packages of little cigars containing other than 20
13    or 25 little cigars in the possession of a distributor,
14    retailer or wholesaler, unless the distributor, retailer,
15    or wholesaler possesses, or produces within the time frame
16    provided in Section 10-27 or 10-28 of this Act, an invoice
17    from a stamping distributor, distributor, or wholesaler
18    showing that the tax on the packages has been or will be
19    paid.
20    "Consumer" means any person who has title to or possession
21of tobacco products or vapor products in storage for the
22person's own use or consumption in this State and not for
23resale.
24    "Correctional Industries program" means a program run by a
25State penal institution in which residents of the penal
26institution produce tobacco products for sale to persons

 

 

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1incarcerated in penal institutions or resident patients of a
2State operated mental health facility.
3    "Department" means the Illinois Department of Revenue.
4    "Distributor" means any of the following:
5        (1) Any manufacturer or wholesaler in this State
6    engaged in the business of selling tobacco products who
7    sells, exchanges, or distributes tobacco products to
8    retailers or consumers in this State.
9        (2) Any manufacturer or wholesaler engaged in the
10    business of selling tobacco products from without this
11    State who sells, exchanges, distributes, ships, or
12    transports tobacco products to retailers or consumers
13    located in this State, so long as that manufacturer or
14    wholesaler has or maintains within this State, directly or
15    by subsidiary, an office, sales house, or other place of
16    business, or any agent or other representative operating
17    within this State under the authority of the person or
18    subsidiary, irrespective of whether the place of business
19    or agent or other representative is located here
20    permanently or temporarily.
21        (3) Any retailer who receives tobacco products on
22    which the tax has not been or will not be paid by another
23    distributor.
24    "Distributor" does not include any person, wherever
25resident or located, who makes, manufactures, or fabricates
26tobacco products as part of a Correctional Industries program

 

 

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1for sale to residents incarcerated in penal institutions or
2resident patients of a State operated mental health facility.
3    "Electronic cigarette" means:
4        (1) any device that employs a battery or other
5    mechanism to heat a solution or substance to produce a
6    vapor or aerosol intended for inhalation, except for (A)
7    any device designed solely for use with cannabis that
8    contains a statement on the retail packaging that the
9    device is designed solely for use with cannabis and not
10    for use with tobacco or (B) any device that contains a
11    solution or substance that contains cannabis subject to
12    tax under the Compassionate Use of Medical Cannabis
13    Program Act or the Cannabis Regulation and Tax Act;
14        (2) any cartridge or container of a solution or
15    substance intended to be used with or in the device or to
16    refill the device, except for any cartridge or container
17    of a solution or substance that contains cannabis subject
18    to tax under the Compassionate Use of Medical Cannabis
19    Program Act or the Cannabis Regulation and Tax Act; or
20        (3) any solution or substance, whether or not it
21    contains nicotine, intended for use in the device, except
22    for any solution or substance that contains cannabis
23    subject to tax under the Compassionate Use of Medical
24    Cannabis Program Act or the Cannabis Regulation and Tax
25    Act.
26    The changes made to the definition of "electronic

 

 

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1cigarette" by this amendatory Act of the 102nd General
2Assembly apply on and after June 28, 2019, but no claim for
3credit or refund is allowed on or after the effective date of
4this amendatory Act of the 102nd General Assembly for such
5taxes paid during the period beginning June 28, 2019 and the
6effective date of this amendatory Act of the 102nd General
7Assembly.
8    "Electronic cigarette" includes, but is not limited to,
9any electronic nicotine delivery system, electronic cigar,
10electronic cigarillo, electronic pipe, electronic hookah, vape
11pen, or similar product or device, and any component or part
12that can be used to build the product or device. "Electronic
13cigarette" does not include: cigarettes, as defined in Section
141 of the Cigarette Tax Act; any product approved by the United
15States Food and Drug Administration for sale as a tobacco
16cessation product, a tobacco dependence product, or for other
17medical purposes that is marketed and sold solely for that
18approved purpose; any asthma inhaler prescribed by a physician
19for that condition that is marketed and sold solely for that
20approved purpose; or any therapeutic product approved for use
21under the Compassionate Use of Medical Cannabis Program Act.
22    "Little cigar" means and includes any roll, made wholly or
23in part of tobacco, where such roll has an integrated
24cellulose acetate filter and weighs less than 4 pounds per
25thousand and the wrapper or cover of which is made in whole or
26in part of tobacco.

 

 

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1    "Manufacturer" means any person, wherever resident or
2located, who manufactures and sells tobacco products, except a
3person who makes, manufactures, or fabricates tobacco products
4as a part of a Correctional Industries program for sale to
5persons incarcerated in penal institutions or resident
6patients of a State operated mental health facility.
7    Beginning on January 1, 2013, "moist snuff" means any
8finely cut, ground, or powdered tobacco that is not intended
9to be smoked, but shall not include any finely cut, ground, or
10powdered tobacco that is intended to be placed in the nasal
11cavity.
12    "Person" means any natural individual, firm, partnership,
13association, joint stock company, joint venture, limited
14liability company, or public or private corporation, however
15formed, or a receiver, executor, administrator, trustee,
16conservator, or other representative appointed by order of any
17court.
18    "Pipe tobacco" means any tobacco that, because of its
19appearance, type, packaging, or labeling, is suitable for use
20in a pipe and is likely to be offered to or purchased by a
21consumer as tobacco to be smoked in a pipe.
22    "Place of business" means and includes any place where
23tobacco products are sold or where tobacco products are
24manufactured, stored, or kept for the purpose of sale or
25consumption, including any vessel, vehicle, airplane, train,
26or vending machine.

 

 

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1    "Remote retail sale" means any sale of cigars or pipe
2tobacco to a consumer in this State when:
3        (1) the consumer submits the order for the sale by
4    means of a telephone or other method of voice
5    transmission, the mail, or the Internet or other online
6    service, or the seller is otherwise not in the physical
7    presence of the buyer when the request for purchase or
8    order is made; or
9        (2) the cigars or pipe tobacco are delivered to the
10    buyer by common carrier, private delivery service, or
11    other method of remote delivery, or the seller is not in
12    the physical presence of the buyer when the buyer obtains
13    possession of the cigars or pipe tobacco.
14    "Remote retail seller" means a person located in this
15State or outside of this State who makes remote retail sales of
16cigars or pipe tobacco, or both, and who meets the economic
17nexus threshold set forth in subsection (b) of Section 2 of the
18Retailers' Occupation Tax Act for remote retailers who are
19engaged in the occupation of selling at retail in Illinois.
20    "Retailer" means any person in this State engaged in the
21business of selling tobacco products to consumers in this
22State, regardless of quantity or number of sales.
23    "Sale" means any transfer, exchange, or barter in any
24manner or by any means whatsoever for a consideration and
25includes all sales made by persons.
26    "Stamp" or "stamps" mean the indicia required to be

 

 

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1affixed on a package of little cigars that evidence payment of
2the tax on packages of little cigars containing 20 or 25 little
3cigars under Section 10-10 of this Act. These stamps shall be
4the same stamps used for cigarettes under the Cigarette Tax
5Act.
6    "Stamping distributor" means a distributor licensed under
7this Act and also licensed as a distributor under the
8Cigarette Tax Act or Cigarette Use Tax Act.
9    "Stock-keeping unit" or "SKU" means the unique identifier
10assigned by the distributor or remote retail seller to an item
11in order to track inventory.
12    "Tobacco products" means any cigars, including little
13cigars; cheroots; stogies; periques; granulated, plug cut,
14crimp cut, ready rubbed, and other smoking tobacco; snuff
15(including moist snuff) or snuff flour; cavendish; plug and
16twist tobacco; fine-cut and other chewing tobaccos; shorts;
17refuse scraps, clippings, cuttings, and sweeping of tobacco;
18and other kinds and forms of tobacco, prepared in such manner
19as to be suitable for chewing or smoking in a pipe or
20otherwise, or both for chewing and smoking; but does not
21include cigarettes as defined in Section 1 of the Cigarette
22Tax Act or tobacco purchased for the manufacture of cigarettes
23by cigarette distributors and manufacturers defined in the
24Cigarette Tax Act and persons who make, manufacture, or
25fabricate cigarettes as a part of a Correctional Industries
26program for sale to residents incarcerated in penal

 

 

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1institutions or resident patients of a State operated mental
2health facility.
3    Beginning on July 1, 2019, "tobacco products" also
4includes electronic cigarettes.
5    "Wholesale price" means the established list price for
6which a manufacturer sells tobacco products to a distributor,
7before the allowance of any discount, trade allowance, rebate,
8or other reduction. In the absence of such an established list
9price, the manufacturer's invoice price at which the
10manufacturer sells the tobacco product to unaffiliated
11distributors, before any discounts, trade allowances, rebates,
12or other reductions, shall be presumed to be the wholesale
13price.
14    "Wholesaler" means any person, wherever resident or
15located, engaged in the business of selling tobacco products
16to others for the purpose of resale. "Wholesaler", when used
17in this Act, does not include a person licensed as a
18distributor under Section 10-20 of this Act unless expressly
19stated in this Act.
20(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19;
21102-40, eff. 6-25-21.)
 
22    (35 ILCS 143/10-10)
23    Sec. 10-10. Tax imposed.
24    (a) Except as otherwise provided in this Section with
25respect to little cigars, on the first day of the third month

 

 

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1after the month in which this Act becomes law, a tax is imposed
2on any person engaged in business as a distributor of tobacco
3products, as defined in Section 10-5, at the rate of (i) 18% of
4the wholesale price of tobacco products sold or otherwise
5disposed of to retailers or consumers located in this State
6prior to July 1, 2012 and (ii) 36% of the wholesale price of
7tobacco products sold or otherwise disposed of to retailers or
8consumers located in this State beginning on July 1, 2012;
9except that, beginning on January 1, 2013, the tax on moist
10snuff shall be imposed at a rate of $0.30 per ounce, and a
11proportionate tax at the like rate on all fractional parts of
12an ounce, sold or otherwise disposed of to retailers or
13consumers located in this State; and except that, beginning
14July 1, 2019, the tax on electronic cigarettes shall be
15imposed at the rate of 15% of the wholesale price of electronic
16cigarettes sold or otherwise disposed of to retailers or
17consumers located in this State. Beginning on July 1, 2025, a
18remote retail seller is liable for the payment of the tax under
19this Act at the rate of 36% of (i) the actual price paid by a
20remote retail seller for the particular stock-keeping unit or
21(ii) if documentation of the actual price paid by the remote
22retail seller is not available, the actual cost list price
23paid by the remote retail seller for the particular
24stock-keeping unit. The tax shall be imposed at the time the
25remote retail seller makes a remote sale to a consumer in the
26State. It is the intent and purpose of this amendatory Act of

 

 

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1the 103rd General Assembly that the remote retail seller be
2liable for the tax. It is further the intent and purpose of
3this amendatory Act of the 103rd General Assembly to impose
4the tax only once on all tobacco products, including cigars
5and pipe tobacco, sold in the State. The tax is in addition to
6all other occupation or privilege taxes imposed by the State
7of Illinois, by any political subdivision thereof, or by any
8municipal corporation. However, the tax is not imposed upon
9any activity in that business in interstate commerce or
10otherwise, to the extent to which that activity may not, under
11the Constitution and Statutes of the United States, be made
12the subject of taxation by this State, and except that,
13beginning July 1, 2013, the tax on little cigars shall be
14imposed at the same rate, and the proceeds shall be
15distributed in the same manner, as the tax imposed on
16cigarettes under the Cigarette Tax Act. The tax is also not
17imposed on sales made to the United States or any entity
18thereof.
19    (b) Notwithstanding subsection (a) of this Section,
20stamping distributors of packages of little cigars containing
2120 or 25 little cigars sold or otherwise disposed of in this
22State shall remit the tax by purchasing tax stamps from the
23Department and affixing them to packages of little cigars in
24the same manner as stamps are purchased and affixed to
25cigarettes under the Cigarette Tax Act, unless the stamping
26distributor sells or otherwise disposes of those packages of

 

 

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1little cigars to another stamping distributor. Only persons
2meeting the definition of "stamping distributor" contained in
3Section 10-5 of this Act may affix stamps to packages of little
4cigars containing 20 or 25 little cigars. Stamping
5distributors may not sell or dispose of little cigars at
6retail to consumers or users at locations where stamping
7distributors affix stamps to packages of little cigars
8containing 20 or 25 little cigars.
9    (c) The impact of the tax levied by this Act is imposed
10upon distributors engaged in the business of selling tobacco
11products to retailers or consumers in this State. Whenever a
12stamping distributor brings or causes to be brought into this
13State from without this State, or purchases from without or
14within this State, any packages of little cigars containing 20
15or 25 little cigars upon which there are no tax stamps affixed
16as required by this Act, for purposes of resale or disposal in
17this State to a person not a stamping distributor, then such
18stamping distributor shall pay the tax to the Department and
19add the amount of the tax to the price of such packages sold by
20such stamping distributor. Payment of the tax shall be
21evidenced by a stamp or stamps affixed to each package of
22little cigars containing 20 or 25 little cigars.
23    Stamping distributors paying the tax to the Department on
24packages of little cigars containing 20 or 25 little cigars
25sold to other distributors, wholesalers or retailers shall add
26the amount of the tax to the price of the packages of little

 

 

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1cigars containing 20 or 25 little cigars sold by such stamping
2distributors.
3    (d) Beginning on January 1, 2013, the tax rate imposed per
4ounce of moist snuff may not exceed 15% of the tax imposed upon
5a package of 20 cigarettes pursuant to the Cigarette Tax Act.
6    (d-5) Notwithstanding the provisions of this Section,
7beginning January 1, 2022, the tax per cigar or other rolled
8tobacco product sold or otherwise disposed of shall not exceed
9$0.50 per cigar or roll.
10    (e) All moneys received by the Department under this Act
11from sales occurring prior to July 1, 2012 shall be paid into
12the Long-Term Care Provider Fund of the State Treasury. Of the
13moneys received by the Department from sales occurring on or
14after July 1, 2012, except for moneys received from the tax
15imposed on the sale of little cigars, 50% shall be paid into
16the Long-Term Care Provider Fund and 50% shall be paid into the
17Healthcare Provider Relief Fund. Beginning July 1, 2013, all
18moneys received by the Department under this Act from the tax
19imposed on little cigars shall be distributed as provided in
20Section 2 of the Cigarette Tax Act.
21(Source: P.A. 101-31, eff. 6-28-19.)
 
22    (35 ILCS 143/10-23 new)
23    Sec. 10-23. Remote retail sales; license; age
24verification.
25    (a) Beginning on July 1, 2025, no person inside or outside

 

 

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1the State may make a remote retail sale of cigars or pipe
2tobacco to consumers in the State without completing an
3application for and being granted a license by the Department
4as a remote retail seller. Each applicant for a license under
5this Section shall furnish to the Department, in an electronic
6format established by the Department, the following
7information:
8        (1) the name and address of the applicant;
9        (2) the address of the location at which the applicant
10    proposes to engage in business as a remote retail seller
11    of tobacco products whether within or outside this State;
12    and
13        (3) such other additional information as the
14    Department may lawfully require by its rules and
15    regulations.
16    (b) A remote retail seller's license issued pursuant to
17this Section shall be issued for the seller's principal place
18of business location, whether that location is inside or
19outside of this State. The license need not be displayed.
20    (c) The annual license fee payable to the Department for
21each remote retail seller's license is $75. The fee shall be
22deposited into the Tax Compliance and Administration Fund and
23shall be used for the cost of tobacco retail inspection and
24contraband tobacco and tobacco smuggling with at least
25two-thirds of the money being used for contraband tobacco and
26tobacco smuggling operations and enforcement. Each applicant

 

 

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1for license shall pay such fee to the Department at the time of
2submitting its application for license to the Department. The
3Department shall require an applicant for a license under this
4Section to electronically file and pay the fee. A separate
5annual license fee shall be paid for each place of business at
6which a person who is required to procure a remote retail
7seller's license under this Section proposes to engage in
8business as a remote retail seller in Illinois under this Act.
9    (d) The following are ineligible to receive a remote
10retail seller's license under this Act:
11        (1) a person who has been convicted of a felony under
12    any federal or State law for smuggling cigarettes or
13    tobacco products or tobacco tax evasion, if the
14    Department, after investigation and a hearing if requested
15    by the applicant, determines that the person has not been
16    sufficiently rehabilitated to warrant the public trust;
17    and
18        (2) a corporation, if any officer, manager, or
19director thereof, or any stockholder or stockholders owning in
20the aggregate more than 5% of the stock of the corporation,
21would not be eligible to receive a license under this Act for
22any reason.
23    (e) The Department, upon receipt of an application and
24license fee, in proper form, from a person who is eligible to
25receive a remote retail seller's license under this Act, shall
26issue to the applicant a license in form prescribed by the

 

 

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1Department. That license shall permit the applicant to engage
2in business as a remote retail seller under this Act at the
3place shown in the seller's application. All licenses issued
4by the Department under this Section shall be valid for a
5period not to exceed one year after issuance unless sooner
6revoked, canceled, or suspended as provided in this Act. No
7license issued under this Section is transferable or
8assignable. A person who obtains a license as a retailer who
9ceases to do business as specified in the license, or who never
10commenced business, or whose license is suspended or revoked,
11shall immediately surrender the license to the Department.
12    (f) A retailer as defined under this Act need not obtain an
13additional license under this Act, but shall be deemed to be
14sufficiently licensed by virtue of his being properly licensed
15as a retailer under Section 4g of the Cigarette Tax Act.
16    (g) No person inside or outside the State may make a remote
17retail sale of cigars or pipe tobacco to consumers in the State
18unless the seller provides for age verification through an
19independent, third-party age verification service that
20compares information available from a commercially available
21database, or aggregate of databases, that are regularly used
22by government agencies and businesses for the purpose of age
23and identity verification to the personal information entered
24by the individual during the ordering process that establishes
25that the individual is of age.
26    (h) If economic nexus thresholds are met, and the tax

 

 

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1under this Act is being remitted using the actual cost list
2method to calculate the tax, the remote retail seller must
3provide the remote retail sellers's certified actual cost list
4to the Department for each SKU that the remote retail seller
5will offer for remote retail sale in the subsequent calendar
6year. The actual cost list shall be updated quarterly as new
7SKUs are added to a remote retail seller's inventory. New SKUs
8will be added using the actual cost first paid for the SKU.
9    (i) In addition to the license required under this
10Section, each remote retailer seller must also obtain any
11required licenses or certificates of registration under the
12Retailers' Occupation Tax Act and the Cigarette Tax Act.
13    (j) Any person aggrieved by any decision of the Department
14under this Section may, within 30 days after notice of the
15decision, protest and request a hearing. Upon receiving a
16request for a hearing, the Department shall give notice to the
17person requesting the hearing of the time and place fixed for
18the hearing and shall hold a hearing in conformity with the
19provisions of this Act and then issue its final administrative
20decision in the matter to that person. In the absence of a
21protest and request for a hearing within 30 days, the
22Department's decision shall become final without any further
23determination being made or notice given.
 
24    (35 ILCS 143/10-30)
25    Sec. 10-30. Returns.

 

 

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1    (a) Every distributor shall, on or before the 15th day of
2each month, file a return with the Department covering the
3preceding calendar month. The return shall disclose the
4wholesale price for all tobacco products other than moist
5snuff and the quantity in ounces of moist snuff sold or
6otherwise disposed of and other information that the
7Department may reasonably require. The return shall be filed
8upon a form prescribed and furnished by the Department.
9    (a-5) Every remote retail seller shall, on or before the
1015th day of each month, file a return with the Department
11covering the preceding calendar month. The remote retail
12seller's return must report all tobacco products brought in or
13caused to be brought in from outside the State or shipped or
14transported to consumers within the State during the preceding
15calendar month. The return must include further information as
16the Department may prescribe by rule and must show the total
17actual cost or actual cost list price paid by a remote retail
18seller for each stock-keeping unit for the previous calendar
19month. The return must show the amount of tax due for all
20remote retail sales made from within or outside the State to a
21consumer in the State during the preceding calendar month. It
22is the intent and purpose of this amendatory Act of the 103rd
23General Assembly that the remote retail seller remit the tax
24at the time the return is filed. It is further the intent and
25purpose of this amendatory Act of the 103rd General Assembly
26to impose the tax only once on all tobacco products, including

 

 

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1cigars and pipe tobacco, sold in the State.
2    (b) In addition to the information required under
3subsection (a), on or before the 15th day of each month,
4covering the preceding calendar month, each stamping
5distributor shall, on forms prescribed and furnished by the
6Department, report the quantity of little cigars sold or
7otherwise disposed of, including the number of packages of
8little cigars sold or disposed of during the month containing
920 or 25 little cigars.
10    (c) At the time when any return of any distributor is due
11to be filed with the Department, the distributor shall also
12remit to the Department the tax liability that the distributor
13has incurred for transactions occurring in the preceding
14calendar month, less the discount allowed.
15    (d) The Department may adopt rules to require the
16electronic filing of any return or document required to be
17filed under this Act. Those rules may provide for exceptions
18from the filing requirement set forth in this paragraph for
19persons who demonstrate that they do not have access to the
20Internet and petition the Department to waive the electronic
21filing requirement.
22    (e) If any payment provided for in this Section exceeds
23the distributor's liabilities under this Act, as shown on an
24original return, the distributor may credit such excess
25payment against liability subsequently to be remitted to the
26Department under this Act, in accordance with reasonable rules

 

 

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1adopted by the Department.
2    (f) The distributor required to pay the tax under Section
310-10 shall be entitled to a discount to reimburse the
4distributor for the expenses incurred in keeping and
5maintaining records, preparing and filing the returns,
6remitting the tax, and supplying the data to the Department
7upon request. The discount shall be 2% of the distributor's
8tax liability under this Act, but not to exceed $2,000 per
9return.
10(Source: P.A. 100-1171, eff. 1-4-19.)
 
11    (35 ILCS 143/10-35)
12    Sec. 10-35. Record keeping.
13    (a) Every distributor, as defined in Section 10-5, shall
14keep complete and accurate records of tobacco products held,
15purchased, manufactured, brought in or caused to be brought in
16from without the State, and tobacco products sold, or
17otherwise disposed of, and shall preserve and keep all
18invoices, bills of lading, sales records, and copies of bills
19of sale, the wholesale price for tobacco products sold or
20otherwise disposed of, an inventory of tobacco products
21prepared as of December 31 of each year or as of the last day
22of the distributor's fiscal year if he or she files federal
23income tax returns on the basis of a fiscal year, and other
24pertinent papers and documents relating to the manufacture,
25purchase, sale, or disposition of tobacco products. Every

 

 

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1sales invoice issued by a licensed distributor to a retailer
2in this State shall contain the distributor's Tobacco Products
3License number unless the distributor has been granted a
4waiver by the Department in response to a written request in
5cases where (i) the distributor sells little cigars or other
6tobacco products only to licensed retailers that are
7wholly-owned by the distributor or owned by a wholly-owned
8subsidiary of the distributor; (ii) the licensed retailer
9obtains little cigars or other tobacco products only from the
10distributor requesting the waiver; and (iii) the distributor
11affixes the tax stamps to the original packages of little
12cigars or has or will pay the tax on the other tobacco products
13sold to the licensed retailer. The distributor shall file a
14written request with the Department, and, if the Department
15determines that the distributor meets the conditions for a
16waiver, the Department shall grant the waiver.
17    (b) Every retailer, as defined in Section 10-5, whether or
18not the retailer has obtained a retailer's license pursuant to
19Section 4g, shall keep complete and accurate records of
20tobacco products held, purchased, sold, or otherwise disposed
21of, and shall preserve and keep all invoices, bills of lading,
22sales records, and copies of bills of sale, returns and other
23pertinent papers and documents relating to the purchase, sale,
24or disposition of tobacco products. Such records need not be
25maintained on the licensed premises, but must be maintained in
26the State of Illinois; however, if access is available

 

 

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1electronically, the records may be maintained out of state.
2However, all original invoices or copies thereof covering
3purchases of tobacco products must be retained on the licensed
4premises for a period of 90 days after such purchase, unless
5the Department has granted a waiver in response to a written
6request in cases where records are kept at a central business
7location within the State of Illinois or in cases where
8records that are available electronically are maintained out
9of state. The Department shall adopt rules regarding the
10eligibility for a waiver, revocation of a waiver, and
11requirements and standards for maintenance and accessibility
12of records located at a central location out-of-State pursuant
13to a waiver provided under this Section.
14    (b-5) Every remote retail seller, whether or not the
15remote retail seller has obtained a remote retail seller's
16license under Section 4g of the Cigarette Tax Act, shall keep
17complete and accurate records of tobacco products held,
18purchased, sold, or otherwise disposed of, and shall preserve
19and keep all invoices, bills of lading, sales records, and
20copies of bills of sale, returns and other pertinent papers
21and documents relating to the purchase, sale, or disposition
22of tobacco products. These records must be on the licensed
23premises but need not be maintained in the State of Illinois;
24however, a remote retail seller shall be able to access
25available records electronically, if the records are
26maintained out of state. However, all original invoices or

 

 

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1copies covering purchases of tobacco products must be retained
2on the licensed premises for a period of 365 days after such
3purchase, unless the Department has granted a waiver in
4response to a written request in cases where records are kept
5at a central business location within the State of Illinois or
6in cases where records that are available electronically are
7maintained out of state. The Department shall adopt rules
8regarding the eligibility for a waiver, revocation of a
9waiver, and requirements and standards for maintenance and
10accessibility of records located at a central location out of
11state pursuant to a waiver provided under this Section.
12    (c) Books, records, papers, and documents that are
13required by this Act to be kept shall, at all times during the
14usual business hours of the day, be subject to inspection by
15the Department or its duly authorized agents and employees.
16The books, records, papers, and documents for any period with
17respect to which the Department is authorized to issue a
18notice of tax liability shall be preserved until the
19expiration of that period.
20(Source: P.A. 99-192, eff. 1-1-16; 100-940, eff. 8-17-18.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.