103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB4465

 

Introduced 1/16/2024, by Rep. Sonya M. Harper

 

SYNOPSIS AS INTRODUCED:
 
35 ILCS 120/2-10
410 ILCS 705/65-10

    Amends the Retailers' Occupation Tax Act. In a provision concerning the rate of tax, provides that the definition "prescription and nonprescription medicine and drugs" includes cannabis or cannabis-infused products purchased from a dispensing organization under the Cannabis Regulation and Tax Act by a cardholder under the Compassionate Use of Medical Cannabis Act. Amends the Cannabis Regulation and Tax Act. Provides that the tax imposed under the provisions is not imposed on cannabis-infused product that is subject to tax under the Compassionate Use of Medical Cannabis Program Act or cannabis or cannabis-infused product sold to a cardholder under the Compassionate Use of Medical Cannabis Program Act. Effective January 1, 2026.


LRB103 36082 CES 66171 b

 

 

A BILL FOR

 

HB4465LRB103 36082 CES 66171 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 Retailers' Occupation Tax Act is amended by
5changing Section 2-10 as follows:
 
6    (35 ILCS 120/2-10)
7    Sec. 2-10. Rate of tax. Unless otherwise provided in this
8Section, the tax imposed by this Act is at the rate of 6.25% of
9gross receipts from sales of tangible personal property made
10in the course of business.
11    Beginning on July 1, 2000 and through December 31, 2000,
12with respect to motor fuel, as defined in Section 1.1 of the
13Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
14the Use Tax Act, the tax is imposed at the rate of 1.25%.
15    Beginning on August 6, 2010 through August 15, 2010, and
16beginning again on August 5, 2022 through August 14, 2022,
17with respect to sales tax holiday items as defined in Section
182-8 of this Act, the tax is imposed at the rate of 1.25%.
19    Within 14 days after July 1, 2000 (the effective date of
20Public Act 91-872), each retailer of motor fuel and gasohol
21shall cause the following notice to be posted in a prominently
22visible place on each retail dispensing device that is used to
23dispense motor fuel or gasohol in the State of Illinois: "As of

 

 

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1July 1, 2000, the State of Illinois has eliminated the State's
2share of sales tax on motor fuel and gasohol through December
331, 2000. The price on this pump should reflect the
4elimination of the tax." The notice shall be printed in bold
5print on a sign that is no smaller than 4 inches by 8 inches.
6The sign shall be clearly visible to customers. Any retailer
7who fails to post or maintain a required sign through December
831, 2000 is guilty of a petty offense for which the fine shall
9be $500 per day per each retail premises where a violation
10occurs.
11    With respect to gasohol, as defined in the Use Tax Act, the
12tax imposed by this Act applies to (i) 70% of the proceeds of
13sales made on or after January 1, 1990, and before July 1,
142003, (ii) 80% of the proceeds of sales made on or after July
151, 2003 and on or before July 1, 2017, (iii) 100% of the
16proceeds of sales made after July 1, 2017 and prior to January
171, 2024, (iv) 90% of the proceeds of sales made on or after
18January 1, 2024 and on or before December 31, 2028, and (v)
19100% of the proceeds of sales made after December 31, 2028. If,
20at any time, however, the tax under this Act on sales of
21gasohol, as defined in the Use Tax Act, is imposed at the rate
22of 1.25%, then the tax imposed by this Act applies to 100% of
23the proceeds of sales of gasohol made during that time.
24    With respect to mid-range ethanol blends, as defined in
25Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
26applies to (i) 80% of the proceeds of sales made on or after

 

 

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1January 1, 2024 and on or before December 31, 2028 and (ii)
2100% of the proceeds of sales made after December 31, 2028. If,
3at any time, however, the tax under this Act on sales of
4mid-range ethanol blends is imposed at the rate of 1.25%, then
5the tax imposed by this Act applies to 100% of the proceeds of
6sales of mid-range ethanol blends made during that time.
7    With respect to majority blended ethanol fuel, as defined
8in the Use Tax Act, the tax imposed by this Act does not apply
9to the proceeds of sales made on or after July 1, 2003 and on
10or before December 31, 2028 but applies to 100% of the proceeds
11of sales made thereafter.
12    With respect to biodiesel blends, as defined in the Use
13Tax Act, with no less than 1% and no more than 10% biodiesel,
14the tax imposed by this Act applies to (i) 80% of the proceeds
15of sales made on or after July 1, 2003 and on or before
16December 31, 2018 and (ii) 100% of the proceeds of sales made
17after December 31, 2018 and before January 1, 2024. On and
18after January 1, 2024 and on or before December 31, 2030, the
19taxation of biodiesel, renewable diesel, and biodiesel blends
20shall be as provided in Section 3-5.1 of the Use Tax Act. If,
21at any time, however, the tax under this Act on sales of
22biodiesel blends, as defined in the Use Tax Act, with no less
23than 1% and no more than 10% biodiesel is imposed at the rate
24of 1.25%, then the tax imposed by this Act applies to 100% of
25the proceeds of sales of biodiesel blends with no less than 1%
26and no more than 10% biodiesel made during that time.

 

 

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1    With respect to biodiesel, as defined in the Use Tax Act,
2and biodiesel blends, as defined in the Use Tax Act, with more
3than 10% but no more than 99% biodiesel, the tax imposed by
4this Act does not apply to the proceeds of sales made on or
5after July 1, 2003 and on or before December 31, 2023. On and
6after January 1, 2024 and on or before December 31, 2030, the
7taxation of biodiesel, renewable diesel, and biodiesel blends
8shall be as provided in Section 3-5.1 of the Use Tax Act.
9    Until July 1, 2022 and beginning again on July 1, 2023,
10with respect to food for human consumption that is to be
11consumed off the premises where it is sold (other than
12alcoholic beverages, food consisting of or infused with adult
13use cannabis, soft drinks, and food that has been prepared for
14immediate consumption), the tax is imposed at the rate of 1%.
15Beginning July 1, 2022 and until July 1, 2023, with respect to
16food for human consumption that is to be consumed off the
17premises where it is sold (other than alcoholic beverages,
18food consisting of or infused with adult use cannabis, soft
19drinks, and food that has been prepared for immediate
20consumption), the tax is imposed at the rate of 0%.
21    With respect to prescription and nonprescription
22medicines, drugs, medical appliances, products classified as
23Class III medical devices by the United States Food and Drug
24Administration that are used for cancer treatment pursuant to
25a prescription, as well as any accessories and components
26related to those devices, modifications to a motor vehicle for

 

 

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1the purpose of rendering it usable by a person with a
2disability, and insulin, blood sugar testing materials,
3syringes, and needles used by human diabetics, the tax is
4imposed at the rate of 1%. For the purposes of this Section,
5until September 1, 2009: the term "soft drinks" means any
6complete, finished, ready-to-use, non-alcoholic drink, whether
7carbonated or not, including, but not limited to, soda water,
8cola, fruit juice, vegetable juice, carbonated water, and all
9other preparations commonly known as soft drinks of whatever
10kind or description that are contained in any closed or sealed
11bottle, can, carton, or container, regardless of size; but
12"soft drinks" does not include coffee, tea, non-carbonated
13water, infant formula, milk or milk products as defined in the
14Grade A Pasteurized Milk and Milk Products Act, or drinks
15containing 50% or more natural fruit or vegetable juice.
16    Notwithstanding any other provisions of this Act,
17beginning September 1, 2009, "soft drinks" means non-alcoholic
18beverages that contain natural or artificial sweeteners. "Soft
19drinks" does not include beverages that contain milk or milk
20products, soy, rice or similar milk substitutes, or greater
21than 50% of vegetable or fruit juice by volume.
22    Until August 1, 2009, and notwithstanding any other
23provisions of this Act, "food for human consumption that is to
24be consumed off the premises where it is sold" includes all
25food sold through a vending machine, except soft drinks and
26food products that are dispensed hot from a vending machine,

 

 

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1regardless of the location of the vending machine. Beginning
2August 1, 2009, and notwithstanding any other provisions of
3this Act, "food for human consumption that is to be consumed
4off the premises where it is sold" includes all food sold
5through a vending machine, except soft drinks, candy, and food
6products that are dispensed hot from a vending machine,
7regardless of the location of the vending machine.
8    Notwithstanding any other provisions of this Act,
9beginning September 1, 2009, "food for human consumption that
10is to be consumed off the premises where it is sold" does not
11include candy. For purposes of this Section, "candy" means a
12preparation of sugar, honey, or other natural or artificial
13sweeteners in combination with chocolate, fruits, nuts or
14other ingredients or flavorings in the form of bars, drops, or
15pieces. "Candy" does not include any preparation that contains
16flour or requires refrigeration.
17    Notwithstanding any other provisions of this Act,
18beginning September 1, 2009, "nonprescription medicines and
19drugs" does not include grooming and hygiene products. For
20purposes of this Section, "grooming and hygiene products"
21includes, but is not limited to, soaps and cleaning solutions,
22shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
23lotions and screens, unless those products are available by
24prescription only, regardless of whether the products meet the
25definition of "over-the-counter-drugs". For the purposes of
26this paragraph, "over-the-counter-drug" means a drug for human

 

 

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1use that contains a label that identifies the product as a drug
2as required by 21 CFR 201.66. The "over-the-counter-drug"
3label includes:
4        (A) a "Drug Facts" panel; or
5        (B) a statement of the "active ingredient(s)" with a
6    list of those ingredients contained in the compound,
7    substance or preparation.
8    Beginning on January 1, 2014 (the effective date of Public
9Act 98-122), "prescription and nonprescription medicines and
10drugs" includes medical cannabis purchased from a registered
11dispensing organization under the Compassionate Use of Medical
12Cannabis Program Act.
13    Beginning on January 1, 2026, "prescription and
14nonprescription medicine and drugs" includes cannabis or
15cannabis-infused products purchased from a dispensing
16organization under the Cannabis Regulation and Tax Act by a
17cardholder, as defined under Section 10 of the Compassionate
18Use of Medical Cannabis Act.
19    As used in this Section, "adult use cannabis" means
20cannabis subject to tax under the Cannabis Cultivation
21Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
22and does not include cannabis or cannabis-infused product sold
23to a cardholder, as defined under Section 10 of the
24Compassionate Use of Medical Cannabis Act subject to tax under
25the Compassionate Use of Medical Cannabis Program Act.
26(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,

 

 

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1Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
260-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
34-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
 
4    Section 10. The Cannabis Regulation and Tax Act is amended
5by changing Section 65-10 as follows:
 
6    (410 ILCS 705/65-10)
7    Sec. 65-10. Tax imposed.
8    (a) Beginning January 1, 2020, a tax is imposed upon
9purchasers for the privilege of using cannabis at the
10following rates:
11        (1) Any cannabis, other than a cannabis-infused
12    product, with an adjusted delta-9-tetrahydrocannabinol
13    level at or below 35% shall be taxed at a rate of 10% of
14    the purchase price;
15        (2) Any cannabis, other than a cannabis-infused
16    product, with an adjusted delta-9-tetrahydrocannabinol
17    level above 35% shall be taxed at a rate of 25% of the
18    purchase price; and
19        (3) A cannabis-infused product shall be taxed at a
20    rate of 20% of the purchase price.
21    (b) The purchase of any product that contains any amount
22of cannabis or any derivative thereof is subject to the tax
23under subsection (a) of this Section on the full purchase
24price of the product.

 

 

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1    (c) The tax imposed under this Section is not imposed on
2cannabis or cannabis-infused product that is subject to tax
3under the Compassionate Use of Medical Cannabis Program Act or
4on cannabis or cannabis-infused product sold to a cardholder,
5as defined under Section 10 of the Compassionate Use of
6Medical Cannabis Program Act. The tax imposed by this Section
7is not imposed with respect to any transaction in interstate
8commerce, to the extent the transaction may not, under the
9Constitution and statutes of the United States, be made the
10subject of taxation by this State.
11    (d) The tax imposed under this Article shall be in
12addition to all other occupation, privilege, or excise taxes
13imposed by the State of Illinois or by any municipal
14corporation or political subdivision thereof.
15    (e) The tax imposed under this Article shall not be
16imposed on any purchase by a purchaser if the cannabis
17retailer is prohibited by federal or State Constitution,
18treaty, convention, statute, or court decision from collecting
19the tax from the purchaser.
20(Source: P.A. 101-27, eff. 6-25-19; 101-593, eff. 12-4-19.)
 
21    Section 99. Effective date. This Act takes effect January
221, 2026.