SB0451 Enrolled LRB096 06559 RCE 16643 b

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 changing
5 Sections 1, 3, 3-10, 4, 4b, 4d, 9c, 18, 18a, 18b, 18c, 20, and
6 24 and by adding Section 28a as follows:
 
7     (35 ILCS 130/1)  (from Ch. 120, par. 453.1)
8     Sec. 1. For the purposes of this Act:
9     "Brand Style" means a variety of cigarettes distinguished
10 by the tobacco used, tar and nicotine content, flavoring used,
11 size of the cigarette, filtration on the cigarette or
12 packaging.
13     "Cigarette", means any roll for smoking made wholly or in
14 part of tobacco irrespective of size or shape and whether or
15 not such tobacco is flavored, adulterated or mixed with any
16 other ingredient, and the wrapper or cover of which is made of
17 paper or any other substance or material except tobacco.
18     "Contraband cigarettes" means:
19         (a) cigarettes that do not bear a required tax stamp
20     under this Act;
21         (b) cigarettes for which any required federal taxes
22     have not been paid;
23         (c) cigarettes that bear a counterfeit tax stamp;

 

 

SB0451 Enrolled - 2 - LRB096 06559 RCE 16643 b

1         (d) cigarettes that are manufactured, fabricated,
2     assembled, processed, packaged, or labeled by any person
3     other than (i) the owner of the trademark rights in the
4     cigarette brand or (ii) a person that is directly or
5     indirectly authorized by such owner;
6         (e) cigarettes imported into the United States, or
7     otherwise distributed, in violation of the federal
8     Imported Cigarette Compliance Act of 2000 (Title IV of
9     Public Law 106-476); or
10         (f) cigarettes that have false manufacturing labels; .
11         (g) cigarettes identified in Section 3-10(a)(1) of
12     this Act; or
13         (h) cigarettes that are improperly tax stamped,
14     including cigarettes that bear a tax stamp of another state
15     or taxing jurisdiction.
16     "Person" means any natural individual, firm, partnership,
17 association, joint stock company, joint adventure, public or
18 private corporation, however formed, limited liability
19 company, or a receiver, executor, administrator, trustee,
20 guardian or other representative appointed by order of any
21 court.
22     "Prior Continuous Compliance Taxpayer" means any person
23 who is licensed under this Act and who, having been a licensee
24 for a continuous period of 5 years, is determined by the
25 Department not to have been either delinquent or deficient in
26 the payment of tax liability during that period or otherwise in

 

 

SB0451 Enrolled - 3 - LRB096 06559 RCE 16643 b

1 violation of this Act. Also, any taxpayer who has, as verified
2 by the Department, continuously complied with the condition of
3 his bond or other security under provisions of this Act for a
4 period of 5 consecutive years shall be considered to be a
5 "Prior continuous compliance taxpayer". In calculating the
6 consecutive period of time described herein for qualification
7 as a "prior continuous compliance taxpayer", a consecutive
8 period of time of qualifying compliance immediately prior to
9 the effective date of this amendatory Act of 1987 shall be
10 credited to any licensee who became licensed on or before the
11 effective date of this amendatory Act of 1987.
12     "Department" means the Department of Revenue.
13     "Sale" means any transfer, exchange or barter in any manner
14 or by any means whatsoever for a consideration, and includes
15 and means all sales made by any person.
16     "Original Package" means the individual packet, box or
17 other container whatsoever used to contain and to convey
18 cigarettes to the consumer.
19     "Distributor" means any and each of the following:
20     (1) Any person engaged in the business of selling
21 cigarettes in this State who brings or causes to be brought
22 into this State from without this State any original packages
23 of cigarettes, on which original packages there is no
24 authorized evidence underneath a sealed transparent wrapper
25 showing that the tax liability imposed by this Act has been
26 paid or assumed by the out-of-State seller of such cigarettes,

 

 

SB0451 Enrolled - 4 - LRB096 06559 RCE 16643 b

1 for sale or other disposition in the course of such business.
2     (2) Any person who makes, manufactures or fabricates
3 cigarettes in this State for sale in this State, except a
4 person who makes, manufactures or fabricates cigarettes as a
5 part of a correctional industries program for sale to residents
6 incarcerated in penal institutions or resident patients of a
7 State-operated mental health facility.
8     (3) Any person who makes, manufactures or fabricates
9 cigarettes outside this State, which cigarettes are placed in
10 original packages contained in sealed transparent wrappers,
11 for delivery or shipment into this State, and who elects to
12 qualify and is accepted by the Department as a distributor
13 under Section 4b of this Act.
14     "Place of business" shall mean and include any place where
15 cigarettes are sold or where cigarettes are manufactured,
16 stored or kept for the purpose of sale or consumption,
17 including any vessel, vehicle, airplane, train or vending
18 machine.
19     "Business" means any trade, occupation, activity or
20 enterprise engaged in for the purpose of selling cigarettes in
21 this State.
22     "Retailer" means any person who engages in the making of
23 transfers of the ownership of, or title to, cigarettes to a
24 purchaser for use or consumption and not for resale in any
25 form, for a valuable consideration. "Retailer" does not include
26 a person:

 

 

SB0451 Enrolled - 5 - LRB096 06559 RCE 16643 b

1         (1) who transfers to residents incarcerated in penal
2     institutions or resident patients of a State-operated
3     mental health facility ownership of cigarettes made,
4     manufactured, or fabricated as part of a correctional
5     industries program; or
6         (2) who transfers cigarettes to a not-for-profit
7     research institution that conducts tests concerning the
8     health effects of tobacco products and who does not offer
9     the cigarettes for resale.
10     "Retailer" shall be construed to include any person who
11 engages in the making of transfers of the ownership of, or
12 title to, cigarettes to a purchaser, for use or consumption by
13 any other person to whom such purchaser may transfer the
14 cigarettes without a valuable consideration, except a person
15 who transfers to residents incarcerated in penal institutions
16 or resident patients of a State-operated mental health facility
17 ownership of cigarettes made, manufactured or fabricated as
18 part of a correctional industries program.
19     "Stamp" or "stamps" mean the indicia required to be affixed
20 on a pack of cigarettes that evidence payment of the tax on
21 cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
22 indicia used to indicate that the cigarettes are intended for a
23 sale or distribution within this State that is exempt from
24 State tax under any applicable provision of law.
25     "Within this State" means within the exterior limits of the
26 State of Illinois and includes all territory within these

 

 

SB0451 Enrolled - 6 - LRB096 06559 RCE 16643 b

1 limits owned by or ceded to the United States of America.
2     "Related party" means any person that is associated with
3 any other person because he or she:
4         (a) is an officer or director of a business; or
5         (b) is legally recognized as a partner in business. ;
6     or
7         (c) is directly or indirectly controlled by another.
8 (Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
9     (35 ILCS 130/3)  (from Ch. 120, par. 453.3)
10     Sec. 3. Affixing tax stamp; remitting tax to the
11 Department. Payment of the taxes imposed by Section 2 of this
12 Act shall (except as hereinafter provided) be evidenced by
13 revenue tax stamps affixed to each original package of
14 cigarettes. Each distributor of cigarettes, before delivering
15 or causing to be delivered any original package of cigarettes
16 in this State to a purchaser, shall firmly affix a proper stamp
17 or stamps to each such package, or (in case of manufacturers of
18 cigarettes in original packages which are contained inside a
19 sealed transparent wrapper) shall imprint the required
20 language on the original package of cigarettes beneath such
21 outside wrapper, as hereinafter provided. Any stamp required by
22 this Act shall note whether the State tax under Section 2 of
23 this Act (35 ILCS 130/2) was paid.
24     No stamp or imprint may be affixed to, or made upon, any
25 package of cigarettes unless that package complies with all

 

 

SB0451 Enrolled - 7 - LRB096 06559 RCE 16643 b

1 requirements of the federal Cigarette Labeling and Advertising
2 Act, 15 U.S.C. 1331 and following, for the placement of labels,
3 warnings, or any other information upon a package of cigarettes
4 that is sold within the United States. Under the authority of
5 Section 6, the Department shall revoke the license of any
6 distributor that is determined to have violated this paragraph.
7 A person may not affix a stamp on a package of cigarettes,
8 cigarette papers, wrappers, or tubes if that individual package
9 has been marked for export outside the United States with a
10 label or notice in compliance with Section 290.185 of Title 27
11 of the Code of Federal Regulations. It is not a defense to a
12 proceeding for violation of this paragraph that the label or
13 notice has been removed, mutilated, obliterated, or altered in
14 any manner.
15     Only distributors licensed under this Act and
16 transporters, as defined in Section 9c of this Act, may possess
17 or out-of-state manufacturers holding a permit under this Act
18 may receive unstamped original packages packs of cigarettes.
19 Prior to shipment to an Illinois retailer, a stamp shall be
20 applied to each original package of cigarettes sold to the
21 retailer. A distributor may apply tax stamps only to original
22 packages of cigarettes purchased or obtained directly from an
23 in-state maker, manufacturer, or fabricator licensed as a
24 distributor under Section 4 of this Act or an out-of-state
25 maker, manufacturer, or fabricator holding a permit under
26 Section 4b of this Act. A another person, each licensed

 

 

SB0451 Enrolled - 8 - LRB096 06559 RCE 16643 b

1 distributor or out-of-state manufacturer holding a permit
2 shall apply a stamp to each pack of cigarettes imported,
3 distributed, or sold whether or not such cigarettes are subject
4 to State tax under Section 2 of this Act (35 ILCS 130/2) or any
5 other provision of State law, provided that a distributor or
6 out-of-state manufacturer may only apply a tax stamp to a pack
7 of cigarettes purchased or obtained directly from a licensed
8 distributor or an out-of-state manufacturer holding a permit.
9 Only a licensed distributor or an out-of-state manufacturer
10 holding a permit may ship or otherwise cause to be delivered
11 unstamped original packages packs of cigarettes in, into, or
12 from this State. A , provided that a licensed distributor or an
13 out-of-state manufacturer holding a permit may transport
14 unstamped original packages packs of cigarettes to a facility,
15 wherever located, owned or controlled by such distributor;
16 however, a distributor may not transport unstamped original
17 packages of cigarettes to a facility where retail sales of
18 cigarettes take place or manufacturer. Any licensed
19 distributor person that ships or otherwise causes to be
20 delivered unstamped original packages packs of cigarettes
21 into, within, or from this State shall ensure that the invoice
22 or equivalent documentation and the bill of lading or freight
23 bill for the shipment identifies the true name and address of
24 the consignor cosignor or seller, the true name and address of
25 the consignee cosignee or purchaser, and the quantity by brand
26 style of the cigarettes so transported, provided that this

 

 

SB0451 Enrolled - 9 - LRB096 06559 RCE 16643 b

1 Section shall not be construed as to impose any requirement or
2 liability upon any common or contract carrier.
3     The Department, or any person authorized by the Department,
4 shall sell such stamps only to persons holding valid licenses
5 as distributors under this Act. On and after July 1, 2003,
6 payment for such stamps must be made by means of electronic
7 funds transfer. The Department may refuse to sell stamps to any
8 person who does not comply with the provisions of this Act.
9 Beginning on the effective date of this amendatory Act of the
10 92nd General Assembly and through June 30, 2002, persons
11 holding valid licenses as distributors may purchase cigarette
12 tax stamps up to an amount equal to 115% of the distributor's
13 average monthly cigarette tax stamp purchases over the 12
14 calendar months prior to the effective date of this amendatory
15 Act of the 92nd General Assembly.
16     Prior to December 1, 1985, the Department shall allow a
17 distributor 21 days in which to make final payment of the
18 amount to be paid for such stamps, by allowing the distributor
19 to make payment for the stamps at the time of purchasing them
20 with a draft which shall be in such form as the Department
21 prescribes, and which shall be payable within 21 days
22 thereafter: Provided that such distributor has filed with the
23 Department, and has received the Department's approval of, a
24 bond, which is in addition to the bond required under Section 4
25 of this Act, payable to the Department in an amount equal to
26 80% of such distributor's average monthly tax liability to the

 

 

SB0451 Enrolled - 10 - LRB096 06559 RCE 16643 b

1 Department under this Act during the preceding calendar year or
2 $500,000, whichever is less. The Bond shall be joint and
3 several and shall be in the form of a surety company bond in
4 such form as the Department prescribes, or it may be in the
5 form of a bank certificate of deposit or bank letter of credit.
6 The bond shall be conditioned upon the distributor's payment of
7 amount of any 21-day draft which the Department accepts from
8 that distributor for the delivery of stamps to that distributor
9 under this Act. The distributor's failure to pay any such
10 draft, when due, shall also make such distributor automatically
11 liable to the Department for a penalty equal to 25% of the
12 amount of such draft.
13     On and after December 1, 1985 and until July 1, 2003, the
14 Department shall allow a distributor 30 days in which to make
15 final payment of the amount to be paid for such stamps, by
16 allowing the distributor to make payment for the stamps at the
17 time of purchasing them with a draft which shall be in such
18 form as the Department prescribes, and which shall be payable
19 within 30 days thereafter, and beginning on January 1, 2003 and
20 thereafter, the draft shall be payable by means of electronic
21 funds transfer: Provided that such distributor has filed with
22 the Department, and has received the Department's approval of,
23 a bond, which is in addition to the bond required under Section
24 4 of this Act, payable to the Department in an amount equal to
25 150% of such distributor's average monthly tax liability to the
26 Department under this Act during the preceding calendar year or

 

 

SB0451 Enrolled - 11 - LRB096 06559 RCE 16643 b

1 $750,000, whichever is less, except that as to bonds filed on
2 or after January 1, 1987, such additional bond shall be in an
3 amount equal to 100% of such distributor's average monthly tax
4 liability under this Act during the preceding calendar year or
5 $750,000, whichever is less. The bond shall be joint and
6 several and shall be in the form of a surety company bond in
7 such form as the Department prescribes, or it may be in the
8 form of a bank certificate of deposit or bank letter of credit.
9 The bond shall be conditioned upon the distributor's payment of
10 the amount of any 30-day draft which the Department accepts
11 from that distributor for the delivery of stamps to that
12 distributor under this Act. The distributor's failure to pay
13 any such draft, when due, shall also make such distributor
14 automatically liable to the Department for a penalty equal to
15 25% of the amount of such draft.
16     Every prior continuous compliance taxpayer shall be exempt
17 from all requirements under this Section concerning the
18 furnishing of such bond, as defined in this Section, as a
19 condition precedent to his being authorized to engage in the
20 business licensed under this Act. This exemption shall continue
21 for each such taxpayer until such time as he may be determined
22 by the Department to be delinquent in the filing of any
23 returns, or is determined by the Department (either through the
24 Department's issuance of a final assessment which has become
25 final under the Act, or by the taxpayer's filing of a return
26 which admits tax to be due that is not paid) to be delinquent

 

 

SB0451 Enrolled - 12 - LRB096 06559 RCE 16643 b

1 or deficient in the paying of any tax under this Act, at which
2 time that taxpayer shall become subject to the bond
3 requirements of this Section and, as a condition of being
4 allowed to continue to engage in the business licensed under
5 this Act, shall be required to furnish bond to the Department
6 in such form as provided in this Section. Such taxpayer shall
7 furnish such bond for a period of 2 years, after which, if the
8 taxpayer has not been delinquent in the filing of any returns,
9 or delinquent or deficient in the paying of any tax under this
10 Act, the Department may reinstate such person as a prior
11 continuance compliance taxpayer. Any taxpayer who fails to pay
12 an admitted or established liability under this Act may also be
13 required to post bond or other acceptable security with the
14 Department guaranteeing the payment of such admitted or
15 established liability.
16     Any person aggrieved by any decision of the Department
17 under this Section may, within the time allowed by law, protest
18 and request a hearing, whereupon the Department shall give
19 notice and shall hold a hearing in conformity with the
20 provisions of this Act and then issue its final administrative
21 decision in the matter to such person. In the absence of such a
22 protest filed within the time allowed by law, the Department's
23 decision shall become final without any further determination
24 being made or notice given.
25     The Department shall discharge any surety and shall release
26 and return any bond or security deposited, assigned, pledged,

 

 

SB0451 Enrolled - 13 - LRB096 06559 RCE 16643 b

1 or otherwise provided to it by a taxpayer under this Section
2 within 30 days after:
3     (1) Such taxpayer becomes a prior continuous compliance
4 taxpayer; or
5     (2) Such taxpayer has ceased to collect receipts on which
6 he is required to remit tax to the Department, has filed a
7 final tax return, and has paid to the Department an amount
8 sufficient to discharge his remaining tax liability as
9 determined by the Department under this Act. The Department
10 shall make a final determination of the taxpayer's outstanding
11 tax liability as expeditiously as possible after his final tax
12 return has been filed. If the Department cannot make such final
13 determination within 45 days after receiving the final tax
14 return, within such period it shall so notify the taxpayer,
15 stating its reasons therefor.
16     The Department may authorize distributors to affix revenue
17 tax stamps by imprinting tax meter stamps upon original
18 packages of cigarettes. The Department shall adopt rules and
19 regulations relating to the imprinting of such tax meter stamps
20 as will result in payment of the proper taxes as herein
21 imposed. No distributor may affix revenue tax stamps to
22 original packages of cigarettes by imprinting tax meter stamps
23 thereon unless such distributor has first obtained permission
24 from the Department to employ this method of affixation. The
25 Department shall regulate the use of tax meters and may, to
26 assure the proper collection of the taxes imposed by this Act,

 

 

SB0451 Enrolled - 14 - LRB096 06559 RCE 16643 b

1 revoke or suspend the privilege, theretofore granted by the
2 Department to any distributor, to imprint tax meter stamps upon
3 original packages of cigarettes.
4     Illinois cigarette manufacturers who place their
5 cigarettes in original packages which are contained inside a
6 sealed transparent wrapper, and similar out-of-State cigarette
7 manufacturers who elect to qualify and are accepted by the
8 Department as distributors under Section 4b(a) of this Act,
9 shall pay the taxes imposed by this Act by remitting the amount
10 thereof to the Department by the 5th day of each month covering
11 cigarettes shipped or otherwise delivered in Illinois to
12 purchasers during the preceding calendar month. Such
13 manufacturers of cigarettes in original packages which are
14 contained inside a sealed transparent wrapper, before
15 delivering such cigarettes or causing such cigarettes to be
16 delivered in this State to purchasers, shall evidence their
17 obligation to remit the taxes due with respect to such
18 cigarettes by imprinting language to be prescribed by the
19 Department on each original package of such cigarettes
20 underneath the sealed transparent outside wrapper of such
21 original package, in such place thereon and in such manner as
22 the Department may designate. Such imprinted language shall
23 acknowledge the manufacturer's payment of or liability for the
24 tax imposed by this Act with respect to the distribution of
25 such cigarettes.
26     A distributor shall not affix, or cause to be affixed, any

 

 

SB0451 Enrolled - 15 - LRB096 06559 RCE 16643 b

1 stamp or imprint to a package of cigarettes, as provided for in
2 this Section, if the tobacco product manufacturer, as defined
3 in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
4 that made or sold the cigarettes has failed to become a
5 participating manufacturer, as defined in subdivision (a)(1)
6 of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
7 or has failed to create a qualified escrow fund for any
8 cigarettes manufactured by the tobacco product manufacturer
9 and sold in this State or otherwise failed to bring itself into
10 compliance with subdivision (a)(2) of Section 15 of the Tobacco
11 Product Manufacturers' Escrow Act.
12 (Source: P.A. 95-1053, eff. 1-1-10.)
 
13     (35 ILCS 130/3-10)
14     Sec. 3-10. Cigarette enforcement.
15     (a) Prohibitions. It is unlawful for any person:
16         (1) to sell or distribute in this State; to acquire,
17     hold, own, possess, or transport, for sale or distribution
18     in this State; or to import, or cause to be imported into
19     this State for sale or distribution in this State:
20             (A) any cigarettes the package of which:
21                 (i) bears any statement, label, stamp,
22             sticker, or notice indicating that the
23             manufacturer did not intend the cigarettes to be
24             sold, distributed, or used in the United States,
25             including but not limited to labels stating "For

 

 

SB0451 Enrolled - 16 - LRB096 06559 RCE 16643 b

1             Export Only", "U.S. Tax Exempt", "For Use Outside
2             U.S.", or similar wording; or
3                 (ii) does not comply with:
4                     (aa) all requirements imposed by or
5                 pursuant to federal law regarding warnings and
6                 other information on packages of cigarettes
7                 manufactured, packaged, or imported for sale,
8                 distribution, or use in the United States,
9                 including but not limited to the precise
10                 warning labels specified in the federal
11                 Cigarette Labeling and Advertising Act, 15
12                 U.S.C. 1333; and
13                     (bb) all federal trademark and copyright
14                 laws;
15             (B) any cigarettes imported into the United States
16         in violation of 26 U.S.C. 5754 or any other federal
17         law, or implementing federal regulations;
18             (C) any cigarettes that such person otherwise
19         knows or has reason to know the manufacturer did not
20         intend to be sold, distributed, or used in the United
21         States; or
22             (D) any cigarettes for which there has not been
23         submitted to the Secretary of the U.S. Department of
24         Health and Human Services the list or lists of the
25         ingredients added to tobacco in the manufacture of the
26         cigarettes required by the federal Cigarette Labeling

 

 

SB0451 Enrolled - 17 - LRB096 06559 RCE 16643 b

1         and Advertising Act, 15 U.S.C. 1335a;
2         (2) to alter the package of any cigarettes, prior to
3     sale or distribution to the ultimate consumer, so as to
4     remove, conceal, or obscure:
5             (A) any statement, label, stamp, sticker, or
6         notice described in subdivision (a)(1)(A)(i) of this
7         Section;
8             (B) any health warning that is not specified in, or
9         does not conform with the requirements of, the federal
10         Cigarette Labeling and Advertising Act, 15 U.S.C.
11         1333; or
12         (3) to affix any stamp required pursuant to this Act to
13     the package of any cigarettes described in subdivision
14     (a)(1) of this Section or altered in violation of
15     subdivision (a)(2). ; or
16         (4) to knowingly possess, or possess for sale,
17     contraband cigarettes.
18     (b) Documentation. On the first business day of each month,
19 each person licensed to affix the State tax stamp to cigarettes
20 shall file with the Department, for all cigarettes imported
21 into the United States to which the person has affixed the tax
22 stamp in the preceding month:
23         (1) a copy of:
24             (A) the permit issued pursuant to the Internal
25         Revenue Code, 26 U.S.C. 5713, to the person importing
26         the cigarettes into the United States allowing the

 

 

SB0451 Enrolled - 18 - LRB096 06559 RCE 16643 b

1         person to import the cigarettes; and
2             (B) the customs form containing, with respect to
3         the cigarettes, the internal revenue tax information
4         required by the U.S. Bureau of Alcohol, Tobacco and
5         Firearms;
6         (2) a statement, signed by the person under penalty of
7     perjury, which shall be treated as confidential by the
8     Department and exempt from disclosure under the Freedom of
9     Information Act, identifying the brand and brand styles of
10     all such cigarettes, the quantity of each brand style of
11     such cigarettes, the supplier of such cigarettes, and the
12     person or persons, if any, to whom such cigarettes have
13     been conveyed for resale; and a separate statement, signed
14     by the individual under penalty of perjury, which shall not
15     be treated as confidential or exempt from disclosure,
16     separately identifying the brands and brand styles of such
17     cigarettes; and
18         (3) a statement, signed by an officer of the
19     manufacturer or importer under penalty of perjury,
20     certifying that the manufacturer or importer has complied
21     with:
22             (A) the package health warning and ingredient
23         reporting requirements of the federal Cigarette
24         Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
25         with respect to such cigarettes; and
26             (B) the provisions of Exhibit T of the Master

 

 

SB0451 Enrolled - 19 - LRB096 06559 RCE 16643 b

1         Settlement Agreement entered in the case of People of
2         the State of Illinois v. Philip Morris, et al. (Circuit
3         Court of Cook County, No. 96-L13146), including a
4         statement indicating whether the manufacturer is, or
5         is not, a participating tobacco manufacturer within
6         the meaning of Exhibit T.
7     (c) Administrative sanctions.
8         (1) Upon finding that a distributor or person has
9     committed any of the acts prohibited by subsection (a),
10     knowing or having reason to know that he or she has done
11     so, or has failed to comply with any requirement of
12     subsection (b), the Department may revoke or suspend the
13     license or licenses of any distributor pursuant to the
14     procedures set forth in Section 6 and impose on the
15     distributor, or on the person, a civil penalty in an amount
16     not to exceed the greater of 500% of the retail value of
17     the cigarettes involved or $5,000.
18         (2) Cigarettes that are acquired, held, owned,
19     possessed, transported in, imported into, or sold or
20     distributed in this State in violation of this Section
21     shall be deemed contraband under this Act and are subject
22     to seizure and forfeiture as provided in this Act, and all
23     such cigarettes seized and forfeited shall be destroyed or
24     maintained and used in an undercover capacity. Such
25     cigarettes shall be deemed contraband whether the
26     violation of this Section is knowing or otherwise.

 

 

SB0451 Enrolled - 20 - LRB096 06559 RCE 16643 b

1     (d) Unfair trade practices. In addition to any other
2 penalties provided for in this Act, a A violation of subsection
3 (a) or subsection (b) of this Section shall constitute an
4 unlawful practice as provided in the Consumer Fraud and
5 Deceptive Business Practices Act.
6     (d-1) Retailers shall not be liable under subsections
7 (c)(1) and (d) of this Section for unknowingly possessing,
8 selling, or distributing to consumers or users cigarettes
9 identified in subsection (a)(1) of this Section if the
10 cigarettes possessed, sold, or distributed by the retailer were
11 obtained from a distributor licensed under this Act.
12     (e) Unfair cigarette sales. For purposes of the Trademark
13 Registration and Protection Act and the Counterfeit Trademark
14 Act, cigarettes imported or reimported into the United States
15 for sale or distribution under any trade name, trade dress, or
16 trademark that is the same as, or is confusingly similar to,
17 any trade name, trade dress, or trademark used for cigarettes
18 manufactured in the United States for sale or distribution in
19 the United States shall be presumed to have been purchased
20 outside of the ordinary channels of trade.
21     (f) General provisions.
22         (1) This Section shall be enforced by the Department;
23     provided that, at the request of the Director of Revenue or
24     the Director's duly authorized agent, the State police and
25     all local police authorities shall enforce the provisions
26     of this Section. The Attorney General has concurrent power

 

 

SB0451 Enrolled - 21 - LRB096 06559 RCE 16643 b

1     with the State's Attorney of any county to enforce this
2     Section.
3         (2) For the purpose of enforcing this Section, the
4     Director of Revenue and any agency to which the Director
5     has delegated enforcement responsibility pursuant to
6     subdivision (f)(1) may request information from any State
7     or local agency and may share information with and request
8     information from any federal agency and any agency of any
9     other state or any local agency of any other state.
10         (3) In addition to any other remedy provided by law,
11     including enforcement as provided in subdivision (a)(1),
12     any person may bring an action for appropriate injunctive
13     or other equitable relief for a violation of this Section;
14     actual damages, if any, sustained by reason of the
15     violation; and, as determined by the court, interest on the
16     damages from the date of the complaint, taxable costs, and
17     reasonable attorney's fees. If the trier of fact finds that
18     the violation is flagrant, it may increase recovery to an
19     amount not in excess of 3 times the actual damages
20     sustained by reason of the violation.
21     (g) Definitions. As used in this Section:
22     "Importer" means that term as defined in 26 U.S.C. 5702(1).
23     "Package" means that term as defined in 15 U.S.C. 1332(4).
24     (h) Applicability.
25         (1) This Section does not apply to:
26             (A) cigarettes allowed to be imported or brought

 

 

SB0451 Enrolled - 22 - LRB096 06559 RCE 16643 b

1         into the United States for personal use; and
2             (B) cigarettes sold or intended to be sold as
3         duty-free merchandise by a duty-free sales enterprise
4         in accordance with the provisions of 19 U.S.C. 1555(b)
5         and any implementing regulations; except that this
6         Section shall apply to any such cigarettes that are
7         brought back into the customs territory for resale
8         within the customs territory.
9         (2) The penalties provided in this Section are in
10     addition to any other penalties imposed under other
11     provision of law.
12 (Source: P.A. 95-1053, eff. 1-1-10.)
 
13     (35 ILCS 130/4)  (from Ch. 120, par. 453.4)
14     Sec. 4. Distributor's license. No person may engage in
15 business as a distributor of cigarettes in this State within
16 the meaning of the first 2 definitions of distributor in
17 Section 1 of this Act without first having obtained a license
18 therefor from the Department. Application for license shall be
19 made to the Department in form as furnished and prescribed by
20 the Department. Each applicant for a license under this Section
21 shall furnish to the Department on the form signed and verified
22 by the applicant under penalty of perjury the following
23 information:
24         (a) The name and address of the applicant;
25         (b) The address of the location at which the applicant

 

 

SB0451 Enrolled - 23 - LRB096 06559 RCE 16643 b

1     proposes to engage in business as a distributor of
2     cigarettes in this State;
3         (c) Such other additional information as the
4     Department may lawfully require by its rules and
5     regulations.
6     The annual license fee payable to the Department for each
7 distributor's license shall be $250. The purpose of such annual
8 license fee is to defray the cost, to the Department, of
9 serializing cigarette tax stamps. Each applicant for license
10 shall pay such fee to the Department at the time of submitting
11 his application for license to the Department.
12     Every applicant who is required to procure a distributor's
13 license shall file with his application a joint and several
14 bond. Such bond shall be executed to the Department of Revenue,
15 with good and sufficient surety or sureties residing or
16 licensed to do business within the State of Illinois, in the
17 amount of $2,500, conditioned upon the true and faithful
18 compliance by the licensee with all of the provisions of this
19 Act. Such bond, or a reissue thereof, or a substitute therefor,
20 shall be kept in effect during the entire period covered by the
21 license. A separate application for license shall be made, a
22 separate annual license fee paid, and a separate bond filed,
23 for each place of business at which a person who is required to
24 procure a distributor's license under this Section proposes to
25 engage in business as a distributor in Illinois under this Act.
26     The following are ineligible to receive a distributor's

 

 

SB0451 Enrolled - 24 - LRB096 06559 RCE 16643 b

1 license under this Act:
2             (1) a person who is not of good character and
3         reputation in the community in which he resides;
4             (2) a person who has been convicted of a felony
5         under any Federal or State law, if the Department,
6         after investigation and a hearing, if requested by the
7         applicant, determines that such person has not been
8         sufficiently rehabilitated to warrant the public
9         trust;
10             (3) a corporation, if any officer, manager or
11         director thereof, or any stockholder or stockholders
12         owning in the aggregate more than 5% of the stock of
13         such corporation, would not be eligible to receive a
14         license under this Act for any reason; .
15             (4) a person, or any person who owns more than 15
16         percent of the ownership interests in a person or a
17         related party who:
18                 (a) owes, at the time of application, any $500
19             or more in delinquent cigarette taxes that have
20             been determined by law to be due and unpaid, unless
21             the license applicant has entered into an
22             agreement approved by the Department to pay the
23             amount due;
24                 (b) had a license under this Act revoked within
25             the past two years by the Department for willful
26             misconduct relating to stolen or contraband

 

 

SB0451 Enrolled - 25 - LRB096 06559 RCE 16643 b

1             cigarettes or has been convicted of a State or
2             federal crime, punishable by imprisonment of one
3             year or more, relating to stolen or contraband
4             cigarettes;
5                 (c) is a distributor who manufactures
6             cigarettes, whether in this State or out of this
7             State, and who is neither (i) a participating
8             manufacturer as defined in subsection II(jj) of
9             the "Master Settlement Agreement" as defined in
10             Sections 10 of the Tobacco Products Manufacturers'
11             Escrow Act and the Tobacco Products Manufacturers'
12             Escrow Enforcement Act of 2003 (30 ILCS 168/10 and
13             30 ILCS 167/10); nor (ii) in full compliance with
14             Tobacco Products Manufacturers' Escrow Act and the
15             Tobacco Products Manufacturers' Escrow Enforcement
16             Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);
17                 (d) has been found by the Department, after
18             notice and a hearing, to have willfully imported or
19             caused to be imported into the United States for
20             sale or distribution any cigarette in violation of
21             19 U.S.C. 1681a;
22                 (e) has been found by the Department, after
23             notice and a hearing, to have willfully imported or
24             caused to be imported into the United States for
25             sale or distribution or manufactured for sale or
26             distribution in the United States any cigarette

 

 

SB0451 Enrolled - 26 - LRB096 06559 RCE 16643 b

1             that does not fully comply with the Federal
2             Cigarette Labeling and Advertising Act (15 U.S.C.
3             1331, et seq.); or
4                 (f) has been found by the Department, after
5             notice and a hearing, to have willfully made a
6             material false statement in the application or has
7             willfully failed to produce records required to be
8             maintained by this Act.
9     The Department, upon receipt of an application, license fee
10 and bond in proper form, from a person who is eligible to
11 receive a distributor's license under this Act, shall issue to
12 such applicant a license in form as prescribed by the
13 Department, which license shall permit the applicant to which
14 it is issued to engage in business as a distributor at the
15 place shown in his application. All licenses issued by the
16 Department under this Act shall be valid for not to exceed one
17 year after issuance unless sooner revoked, canceled or
18 suspended as provided in this Act. No license issued under this
19 Act is transferable or assignable. Such license shall be
20 conspicuously displayed in the place of business conducted by
21 the licensee in Illinois under such license. No distributor
22 licensee acquires any vested interest or compensable property
23 right in a license issued under this Act.
24     A licensed distributor shall notify the Department of any
25 change in the information contained on the application form,
26 including any change in ownership and shall do so within 30

 

 

SB0451 Enrolled - 27 - LRB096 06559 RCE 16643 b

1 days after any such change.
2     Any person aggrieved by any decision of the Department
3 under this Section may, within 20 days after notice of the
4 decision, protest and request a hearing. Upon receiving a
5 request for a hearing, the Department shall give notice to the
6 person requesting the hearing of the time and place fixed for
7 the hearing and shall hold a hearing in conformity with the
8 provisions of this Act and then issue its final administrative
9 decision in the matter to that person. In the absence of a
10 protest and request for a hearing within 20 days, the
11 Department's decision shall become final without any further
12 determination being made or notice given.
13 (Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
14     (35 ILCS 130/4b)  (from Ch. 120, par. 453.4b)
15     Sec. 4b.
16     (a) The Department may, in its discretion, upon
17 application, issue permits authorizing the payment of the tax
18 herein imposed by out-of-State cigarette manufacturers who are
19 not required to be licensed as distributors of cigarettes in
20 this State, but who elect to qualify under this Act as
21 distributors of cigarettes in this State, and who, to the
22 satisfaction of the Department, furnish adequate security to
23 insure payment of the tax, provided that any such permit shall
24 extend only to cigarettes which such permittee manufacturer
25 places in original packages that are contained inside a sealed

 

 

SB0451 Enrolled - 28 - LRB096 06559 RCE 16643 b

1 transparent wrapper. Such permits shall be issued without
2 charge in such form as the Department may prescribe and shall
3 not be transferable or assignable.
4     The following are ineligible to receive a distributor's
5 permit under this subsection Act:
6     (1) a person who is not of good character and reputation in
7 the community in which he resides;
8     (2) a person who has been convicted of a felony under any
9 Federal or State law, if the Department, after investigation
10 and a hearing, if requested by the applicant, determines that
11 such person has not been sufficiently rehabilitated to warrant
12 the public trust;
13     (3) a corporation, if any officer, manager or director
14 thereof, or any stockholder or stockholders owning in the
15 aggregate more than 5% of the stock of such corporation, would
16 not be eligible to receive a permit under this Act for any
17 reason.
18     With respect to cigarettes which come within the scope of
19 such a permit and which any such permittee delivers or causes
20 to be delivered in Illinois to licensed distributors
21 purchasers, such permittee shall remit the tax imposed by this
22 Act at the times provided for in Section 3 of this Act. Each
23 such remittance shall be accompanied by a return filed with the
24 Department on a form to be prescribed and furnished by the
25 Department and shall disclose such information as the
26 Department may lawfully require. The Department may promulgate

 

 

SB0451 Enrolled - 29 - LRB096 06559 RCE 16643 b

1 rules to require that the permittee's return be accompanied by
2 appropriate computer-generated magnetic media supporting
3 schedule data in the format prescribed by the Department,
4 unless, as provided by rule, the Department grants an exception
5 upon petition of the permittee. Each such return shall be
6 accompanied by a copy of each invoice rendered by the permittee
7 to any licensed distributor purchaser to whom the permittee
8 delivered cigarettes of the type covered by the permit (or
9 caused cigarettes of the type covered by the permit to be
10 delivered) in Illinois during the period covered by such
11 return.
12     Such permit may be suspended, canceled or revoked when, at
13 any time, the Department considers that the security given is
14 inadequate, or that such tax can more effectively be collected
15 from distributors located in this State, or whenever the
16 permittee violates any provision of this Act or any lawful rule
17 or regulation issued by the Department pursuant to this Act or
18 is determined to be ineligible for a distributor's permit under
19 this Act as provided in this Section, whenever the permittee
20 shall notify the Department in writing of his desire to have
21 the permit canceled. The Department shall have the power, in
22 its discretion, to issue a new permit after such suspension,
23 cancellation or revocation, except when the person who would
24 receive the permit is ineligible to receive a distributor's
25 permit under this Act.
26     All permits issued by the Department under this Act shall

 

 

SB0451 Enrolled - 30 - LRB096 06559 RCE 16643 b

1 be valid for not to exceed one year after issuance unless
2 sooner revoked, canceled or suspended as in this Act provided.
3     (b) Out-of-state cigarette manufacturers who are not
4 required to be licensed as distributors of cigarettes in this
5 State and who do not elect to obtain approval under subsection
6 4b(a) to pay the tax imposed by this Act, but who elect to
7 qualify under this Act as distributors of cigarettes in this
8 State for purposes of shipping and delivering unstamped
9 original packages of cigarettes into this State to licensed
10 distributors, shall obtain a permit from the Department. These
11 permits shall be issued without charge in such form as the
12 Department may prescribe and shall not be transferable or
13 assignable.
14     The following are ineligible to receive a distributor's
15 permit under this subsection:
16         (1) a person who is not of good character and
17     reputation in the community in which he or she resides;
18         (2) a person who has been convicted of a felony under
19     any federal or State law, if the Department, after
20     investigation and a hearing, if requested by the applicant,
21     determines that the person has not been sufficiently
22     rehabilitated to warrant the public trust; and
23         (3) a corporation, if any officer, manager, or director
24     thereof, or any stockholder or stockholders owning in the
25     aggregate more than 5% of the stock of the corporation,
26     would not be eligible to receive a permit under this Act

 

 

SB0451 Enrolled - 31 - LRB096 06559 RCE 16643 b

1     for any reason.
2     With respect to original packages of cigarettes that such
3 permittee delivers or causes to be delivered in Illinois and
4 distributes to the public for promotional purposes without
5 consideration, the permittee shall pay the tax imposed by this
6 Act by remitting the amount thereof to the Department by the
7 5th day of each month covering cigarettes shipped or otherwise
8 delivered in Illinois for those purposes during the preceding
9 calendar month. The permittee, before delivering those
10 cigarettes or causing those cigarettes to be delivered in this
11 State, shall evidence his or her obligation to remit the taxes
12 due with respect to those cigarettes by imprinting language to
13 be prescribed by the Department on each original package of
14 cigarettes, in such place thereon and in such manner also to be
15 prescribed by the Department. The imprinted language shall
16 acknowledge the permittee's payment of or liability for the tax
17 imposed by this Act with respect to the distribution of those
18 cigarettes.
19     With respect to cigarettes that the permittee delivers or
20 causes to be delivered in Illinois to Illinois licensed
21 distributors or distributed to the public for promotional
22 purposes, the permittee shall, by the 5th day of each month,
23 file with the Department, a report covering cigarettes shipped
24 or otherwise delivered in Illinois to licensed distributors or
25 distributed to the public for promotional purposes during the
26 preceding calendar month on a form to be prescribed and

 

 

SB0451 Enrolled - 32 - LRB096 06559 RCE 16643 b

1 furnished by the Department and shall disclose such other
2 information as the Department may lawfully require. The
3 Department may promulgate rules to require that the permittee's
4 report be accompanied by appropriate computer-generated
5 magnetic media supporting schedule data in the format
6 prescribed by the Department, unless, as provided by rule, the
7 Department grants an exception upon petition of the permittee.
8 Each such report shall be accompanied by a copy of each invoice
9 rendered by the permittee to any purchaser to whom the
10 permittee delivered cigarettes of the type covered by the
11 permit (or caused cigarettes of the type covered by the permit
12 to be delivered) in Illinois during the period covered by such
13 report.
14     Such permit may be suspended, canceled, or revoked whenever
15 the permittee violates any provision of this Act or any lawful
16 rule or regulation issued by the Department pursuant to this
17 Act, is determined to be ineligible for a distributor's permit
18 under this Act as provided in this Section, or notifies the
19 Department in writing of his or her desire to have the permit
20 canceled. The Department shall have the power, in its
21 discretion, to issue a new permit after such suspension,
22 cancellation, or revocation, except when the person who would
23 receive the permit is ineligible to receive a distributor's
24 permit under this Act.
25     All permits issued by the Department under this Act shall
26 be valid for a period not to exceed one year after issuance

 

 

SB0451 Enrolled - 33 - LRB096 06559 RCE 16643 b

1 unless sooner revoked, canceled, or suspended as provided in
2 this Act.
3 (Source: P.A. 79-387.)
 
4     (35 ILCS 130/4d)
5     Sec. 4d. Sales of cigarettes to and by retailers.
6 Transactions only with licensed distributors, out-of-state
7 manufacturers holding a permit, and retailers holding a
8 certificate of registration. In-state makers, manufacturers,
9 and fabricators licensed as distributors under Section 4 of
10 this Act and out-of-state makers, manufacturers, and
11 fabricators holding permits under Section 4b of this Act may
12 not sell original packages of cigarettes to retailers. A
13 retailer may sell only original packages of cigarettes obtained
14 from licensed distributors other than in-state makers,
15 manufacturers, or fabricators licensed as distributors under
16 Section 4 of this Act and out-of-state makers, manufacturers,
17 or fabricators holding permits under Section 4b of this Act. A
18 distributor or manufacturer may sell or distribute cigarettes
19 to a person located or doing business within this State only if
20 such person is a licensed distributor or a retailer holding a
21 certificate of registration. A retailer may only sell
22 cigarettes obtained from a licensed distributor or an
23 out-of-state manufacturer holding a permit.
24 (Source: P.A. 95-1053, eff. 1-1-10.)
 

 

 

SB0451 Enrolled - 34 - LRB096 06559 RCE 16643 b

1     (35 ILCS 130/9c)  (from Ch. 120, par. 453.9c)
2     (Section scheduled to be repealed on January 1, 2010)
3     Sec. 9c. "Transporter" means any person transporting into
4 or within this State original packages of cigarettes that are
5 not tax stamped as required by this Act, except:
6     (a) a person transporting into this State unstamped
7 original packages containing a total of not more than 2,000
8 cigarettes in any single lot or shipment;
9     (b) a licensed cigarette distributor under this Act;
10     (c) a common carrier;
11     (d) a person transporting cigarettes under federal
12 internal bond or custom control that are non-tax paid under
13 Chapter 52 of the Internal Revenue Code of 1954, as amended;
14     (e) a person engaged in transporting cigarettes to a
15 licensed distributor under the Illinois Cigarette Tax Act or
16 the Illinois Cigarette Use Tax Act, or under the laws of any
17 other state, and who has in his or her possession during the
18 course of transporting those cigarettes a bill of lading,
19 waybill, or other similar commercial document that was issued
20 by or for a manufacturer of cigarettes who holds a valid permit
21 as a cigarette manufacturer under Chapter 52 of the Internal
22 Revenue Code of 1954, as amended, and that shows that the
23 cigarettes are being transported by or at the direction of that
24 manufacturer to that licensed distributor.
25     Any transporter desiring to possess or acquire for
26 transportation or transport upon the highways, roads, or

 

 

SB0451 Enrolled - 35 - LRB096 06559 RCE 16643 b

1 streets of this State more than 2,000 cigarettes that are not
2 contained in original packages that are Illinois tax stamped
3 shall obtain a permit from the Department authorizing that
4 transporter to possess or acquire for transportation or
5 transport the cigarettes, and he or she shall have the permit
6 in the transporting vehicle during the period of transportation
7 of the cigarettes. The application for the permit shall be in
8 such form and shall contain such information as may be
9 prescribed by the Department. The Department may issue a permit
10 for a single load or shipment or for a number of loads or
11 shipments to be transported under specified conditions.
12     Any cigarettes transported on the highways, roads, or
13 streets of this State under conditions that violate any
14 requirement of this Section, and the vehicle containing those
15 cigarettes, are subject to seizure by the Department, and to
16 confiscation and forfeiture in the same manner as is provided
17 for in Section 18a of this Act.
18     Any person who violates any requirement of this Section is
19 guilty of a Class 4 felony.
20     Any transporter who, with intent to defeat or evade or with
21 intent to aid another to defeat or evade the tax imposed by
22 this Act, at any given time, transports 40,000 or more
23 cigarettes upon the highways, roads, or streets of this State
24 under conditions that violate any requirement of this Section
25 is guilty of a Class 3 felony.
26 "Transporter" means any person transporting into or within this

 

 

SB0451 Enrolled - 36 - LRB096 06559 RCE 16643 b

1 State original packages of cigarettes which are not tax stamped
2 as required by this Act, except:
3     (a) A person transporting into this State unstamped
4 original packages containing a total of not more than 2000
5 cigarettes in any single lot or shipment;
6     (b) a licensed cigarette distributor under this Act;
7     (c) a common carrier;
8     (d) a person transporting cigarettes under Federal
9 internal bond or custom control that are non-tax paid under
10 Chapter 52 of the Internal Revenue Code of 1954, as amended;
11     (e) a person engaged in transporting cigarettes to a
12 cigarette dealer who is properly licensed as a distributor
13 under the Illinois Cigarette Tax Act or the Illinois Cigarette
14 Use Tax Act, or under the laws of any other state, and who has
15 in his possession during the course of transporting such
16 cigarettes a bill of lading, waybill, or other similar
17 commercial document which was issued by or for a manufacturer
18 of cigarettes who holds a valid permit as a cigarette
19 manufacturer under Chapter 52, Internal Revenue Code of 1954,
20 as subsequently amended, and which shows that the cigarettes
21 are being transported by or at the direction of such
22 manufacturer to such licensed cigarette dealer.
23     Any transporter desiring to possess or acquire for
24 transportation or transport upon the highways, roads or streets
25 of this State more than 2000 cigarettes which are not contained
26 in original packages that are Illinois tax stamped shall obtain

 

 

SB0451 Enrolled - 37 - LRB096 06559 RCE 16643 b

1 a permit from the Department authorizing such transporter to
2 possess or acquire for transportation or transport the
3 cigarettes, and he shall have the permit in the transporting
4 vehicle during the period of transportation of the cigarettes.
5 The application for the permit shall be in such form and shall
6 contain such information as may be prescribed by the
7 Department. The Department may issue a permit for a single load
8 or shipment or for a number of loads or shipments to be
9 transported under specified conditions.
10     Any cigarettes transported on the highways, roads or
11 streets of this State under conditions which violate any
12 requirement of this Section, and the vehicle containing such
13 cigarettes, are subject to seizure by the Department, and to
14 confiscation and forfeiture in the same manner as is provided
15 for in Section 18a of this Act. Any such confiscated and
16 forfeited property shall be sold in the same manner and under
17 the same conditions as provided for in Section 21 of this Act,
18 with the proceeds from any such sale being deposited in the
19 State Treasury.
20     Any person who violates any requirement of this Section is
21 guilty of a Class 4 felony.
22     Any transporter who, with intent to defeat or evade or with
23 intent to aid another to defeat or evade the tax imposed by
24 this Act, at any given time, transports 40,000 or more
25 cigarettes upon the highways, roads or streets of this State
26 under conditions which violate any requirement of this Section

 

 

SB0451 Enrolled - 38 - LRB096 06559 RCE 16643 b

1 shall be guilty of a Class 3 felony.
2 (Source: P.A. 83-1428. Repealed by P.A. 95-1053, eff. 1-1-10.)
 
3     (35 ILCS 130/18)  (from Ch. 120, par. 453.18)
4     Sec. 18. Any duly authorized employee of the Department may
5 arrest without warrant any person committing in his presence a
6 violation of any of the provisions of this Act, and may without
7 a search warrant inspect all cigarettes located in any place of
8 business and seize any original packages of contraband
9 cigarettes not tax stamped or tax imprinted underneath the
10 sealed transparent wrapper of such original packages in
11 accordance with the provisions of this Act and any vending
12 device in which such packages may be found, and such original
13 packages or vending devices so seized shall be subject to
14 confiscation and forfeiture as hereinafter provided.
15 (Source: P.A. 82-1009.)
 
16     (35 ILCS 130/18a)  (from Ch. 120, par. 453.18a)
17     Sec. 18a. After seizing any original packages of
18 cigarettes, or cigarette vending devices, as provided in
19 Section 18 of this Act, the Department shall hold a hearing and
20 shall determine whether such original packages of cigarettes,
21 at the time of their seizure by the Department, were contraband
22 cigarettes not tax stamped or tax imprinted underneath the
23 sealed transparent wrapper of such original packages in
24 accordance with this Act, or whether such cigarette vending

 

 

SB0451 Enrolled - 39 - LRB096 06559 RCE 16643 b

1 devices, at the time of their seizure by the Department,
2 contained original packages of contraband cigarettes not tax
3 stamped or tax imprinted underneath the sealed transparent
4 wrapper of such original packages as required by this Act. The
5 Department shall give not less than 7 days' notice of the time
6 and place of such hearing to the owner of such property if he
7 is known, and also to the person in whose possession the
8 property so taken was found, if such person is known and if
9 such person in possession is not the owner of said property. In
10 case neither the owner nor the person in possession of such
11 property is known, the Department shall cause publication of
12 the time and place of such hearing to be made at least once in
13 each week for 3 weeks successively in a newspaper of general
14 circulation in the county where such hearing is to be held.
15     If, as the result of such hearing, the Department shall
16 determine that the original packages of cigarettes seized were
17 at the time of seizure contraband cigarettes not tax stamped or
18 tax imprinted underneath the sealed transparent wrapper of such
19 original packages as required by this Act, or that any
20 cigarette vending device at the time of its seizure contained
21 original packages of contraband cigarettes not tax stamped or
22 tax imprinted underneath the sealed transparent wrapper of such
23 original packages as required by this Act, the Department shall
24 enter an order declaring such original packages of cigarettes
25 or such cigarette vending devices confiscated and forfeited to
26 the State, and to be held by the Department for disposal by it

 

 

SB0451 Enrolled - 40 - LRB096 06559 RCE 16643 b

1 as provided in Section 21 of this Act. The Department shall
2 give notice of such order to the owner of such property if he
3 is known, and also to the person in whose possession the
4 property so taken was found, if such person is known and if
5 such person in possession is not the owner of said property. In
6 case neither the owner nor the person in possession of such
7 property is known, the Department shall cause publication of
8 such order to be made at least once in each week for 3 weeks
9 successively in a newspaper of general circulation in the
10 county where such hearing was held.
11 (Source: P.A. 76-684.)
 
12     (35 ILCS 130/18b)  (from Ch. 120, par. 453.18b)
13     Sec. 18b. Possession of more than 100 original packages of
14 contraband cigarettes; penalty. With the exception of licensed
15 distributors and transporters, as defined in Section 9c of this
16 Act, possessing unstamped original packages of cigarettes, and
17 licensed distributors possessing original packages of
18 cigarettes that bear a tax stamp of another state or taxing
19 jurisdiction, anyone possessing contraband cigarettes
20 contained in original packages is which are not tax stamped as
21 required by this Act, or which are improperly tax stamped,
22 shall be liable to pay, to the Department for deposit in the
23 Tax Compliance and Administration Fund State Treasury, a
24 penalty of $25 $15 for each such package of cigarettes in
25 excess of 100 packages, unless reasonable cause can be

 

 

SB0451 Enrolled - 41 - LRB096 06559 RCE 16643 b

1 established by the person upon whom the penalty is imposed.
2 This penalty is in addition to the taxes imposed by this Act.
3 Reasonable cause shall be determined in each situation in
4 accordance with rules adopted by the Department. The provisions
5 of the Uniform Penalty and Interest Act do not apply to this
6 Section. Such penalty may be recovered by the Department in a
7 civil action.
8 (Source: P.A. 83-1428.)
 
9     (35 ILCS 130/18c)
10     Sec. 18c. Possession of not less than 10 and not more than
11 100 original packages of contraband cigarettes not tax stamped
12 or improperly tax stamped; penalty. With the exception of
13 licensed distributors and transporters, as defined in Section
14 9c of this Act, possessing unstamped original packages of
15 cigarettes, and licensed distributors possessing original
16 packages of cigarettes that bear a tax stamp of another state
17 or taxing jurisdiction, anyone possessing not less than 10 and
18 not more than 100 packages of contraband cigarettes contained
19 in original packages that are not tax stamped as required by
20 this Act, or that are improperly tax stamped, is liable to pay
21 to the Department, for deposit into the Tax Compliance and
22 Administration Fund, a penalty of $10 for each such package of
23 cigarettes, unless reasonable cause can be established by the
24 person upon whom the penalty is imposed. Reasonable cause shall
25 be determined in each situation in accordance with rules

 

 

SB0451 Enrolled - 42 - LRB096 06559 RCE 16643 b

1 adopted by the Department. The provisions of the Uniform
2 Penalty and Interest Act do not apply to this Section.
3 (Source: P.A. 92-322, eff. 1-1-02.)
 
4     (35 ILCS 130/20)  (from Ch. 120, par. 453.20)
5     Sec. 20. Whenever any peace officer of the State or any
6 duly authorized officer or employee of the Department shall
7 have reason to believe that any violation of this Act has
8 occurred and that the person so violating the Act has in his,
9 her or its possession any original package of contraband
10 cigarettes, not tax stamped or tax imprinted underneath the
11 sealed transparent wrapper of such original package as required
12 by this Act, or any vending device containing such original
13 packages of contraband cigarettes to which stamps have not been
14 affixed, or on which an authorized substitute for stamps has
15 not been imprinted underneath the sealed transparent wrapper of
16 such original packages, as required by this Act, he may file or
17 cause to be filed his complaint in writing, verified by
18 affidavit, with any court within whose jurisdiction the
19 premises to be searched are situated, stating the facts upon
20 which such belief is founded, the premises to be searched, and
21 the property to be seized, and procure a search warrant and
22 execute the same. Upon the execution of such search warrant,
23 the peace officer, or officer or employee of the Department,
24 executing such search warrant shall make due return thereof to
25 the court issuing the same, together with an inventory of the

 

 

SB0451 Enrolled - 43 - LRB096 06559 RCE 16643 b

1 property taken thereunder. The court shall thereupon issue
2 process against the owner of such property if he is known;
3 otherwise, such process shall be issued against the person in
4 whose possession the property so taken is found, if such person
5 is known. In case of inability to serve such process upon the
6 owner or the person in possession of the property at the time
7 of its seizure, as hereinbefore provided, notice of the
8 proceedings before the court shall be given as required by the
9 statutes of the State governing cases of Attachment. Upon the
10 return of the process duly served or upon the posting or
11 publishing of notice made, as hereinabove provided, the court
12 or jury, if a jury shall be demanded, shall proceed to
13 determine whether or not such property so seized was held or
14 possessed in violation of this Act, or whether, if a vending
15 device has been so seized, it contained at the time of its
16 seizure original packages of contraband cigarettes not tax
17 stamped or tax imprinted underneath the sealed transparent
18 wrapper of such original packages as required by this Act. In
19 case of a finding that the original packages seized were
20 contraband cigarettes not tax stamped or tax imprinted
21 underneath the sealed transparent wrapper of such original
22 packages in accordance with the provisions of this Act, or that
23 any vending device so seized contained at the time of its
24 seizure original packages of contraband cigarettes not tax
25 stamped or tax imprinted underneath the sealed transparent
26 wrapper of such original packages in accordance with the

 

 

SB0451 Enrolled - 44 - LRB096 06559 RCE 16643 b

1 provisions of this Act, judgment shall be entered confiscating
2 and forfeiting the property to the State and ordering its
3 delivery to the Department, and in addition thereto, the court
4 shall have power to tax and assess the costs of the
5 proceedings.
6     When any original packages or any cigarette vending device
7 shall have been declared forfeited to the State by any court,
8 as hereinbefore provided, and when such confiscated and
9 forfeited property shall have been delivered to the Department,
10 as provided in this Act, the said Department shall destroy or
11 maintain and use such property in an undercover capacity. The
12 Department may, prior to any destruction of cigarettes, permit
13 the true holder of the trademark rights in the cigarette brand
14 to inspect such contraband cigarettes, in order to assist the
15 Department in any investigation regarding such cigarettes.
16 (Source: P.A. 95-1053, eff. 1-1-10.)
 
17     (35 ILCS 130/24)  (from Ch. 120, par. 453.24)
18     Sec. 24. Punishment for sale or possession of unstamped
19 packages of contraband cigarettes.
20     (a) Possession or sale of 100 or less packages of
21 contraband cigarettes. With the exception of licensed
22 distributors or transporters, as defined in Section 9c of this
23 Act, any person who has in his or her possession or sells 100
24 or less original packages of contraband cigarettes is guilty of
25 a Class A misdemeanor.

 

 

SB0451 Enrolled - 45 - LRB096 06559 RCE 16643 b

1     (b) Possession or sale of more than 100 but less than 251
2 packages of contraband cigarettes. With the exception of
3 licensed distributors or transporters, as defined in Section 9c
4 of this Act, any person who has in his or her possession or
5 sells more than 100 but less than 251 original packages of
6 contraband cigarettes is guilty of a Class A misdemeanor for a
7 first offense and a Class 4 felony for each subsequent offense.
8     (c) Possession or sale of more than 250 but less than 1,001
9 packages of contraband cigarettes. With the exception of
10 licensed distributors or transporters, as defined in Section 9c
11 of this Act, any person who has in his or her possession or
12 sells more than 250 but less than 1,001 original packages of
13 contraband cigarettes is guilty of a Class 4 felony.
14     (d) Possession or sale of more than 1,000 packages of
15 contraband cigarettes. With the exception of licensed
16 distributors or transporters, as defined in Section 9c of this
17 Act, any person who has in his or her possession or sells more
18 than 1,000 original packages of contraband cigarettes is guilty
19 of a Class 3 felony.
20     (e) Any person licensed as a distributor or transporter, as
21 defined in Section 9c of this Act, who has in his or her
22 possession or sells 100 or less original packages of contraband
23 cigarettes is guilty of a Class A misdemeanor.
24     (f) Any person licensed as a distributor or transporter, as
25 defined in Section 9c of this Act, who has in his or her
26 possession or sells more than 100 original packages of

 

 

SB0451 Enrolled - 46 - LRB096 06559 RCE 16643 b

1 contraband cigarettes is guilty of a Class 4 felony.
2     (g) Notwithstanding subsections (e) through (f), licensed
3 distributors and transporters, as defined in Section 9c of this
4 Act, may possess unstamped packages of cigarettes.
5 Notwithstanding subsections (e) through (f), licensed
6 distributors may possess cigarettes that bear a tax stamp of
7 another state or taxing jurisdiction. Notwithstanding
8 subsections (e) through (f), a licensed distributor may possess
9 contraband cigarettes returned to the distributor by a retailer
10 if the distributor immediately conducts an inventory of the
11 cigarettes being returned, the distributor and the retailer
12 returning the contraband cigarettes sign the inventory, the
13 distributor provides a copy of the signed inventory to the
14 retailer, and the distributor retains the inventory in its
15 books and records and promptly notifies the Department of
16 Revenue.
17     (h) Notwithstanding subsections (a) through (d) of this
18 Section, a retailer unknowingly possessing contraband
19 cigarettes obtained from a licensed distributor or knowingly
20 possessing contraband cigarettes obtained from a licensed
21 distributor is not subject to penalties under this Section if
22 the retailer, within 48 hours after discovering that the
23 cigarettes are contraband cigarettes, excluding Saturdays,
24 Sundays, and holidays: (i) notifies the Department and the
25 licensed distributor from whom the cigarettes were obtained,
26 orally and in writing, that he or she possesses contraband

 

 

SB0451 Enrolled - 47 - LRB096 06559 RCE 16643 b

1 cigarettes obtained from a licensed distributor; (ii) places
2 the contraband cigarettes in one or more containers and seals
3 those containers; and (iii) places on the containers the
4 following or similar language: "Contraband Cigarettes. Not For
5 Sale." All contraband cigarettes in the possession of a
6 retailer remain subject to forfeiture under the provisions of
7 this Act.
8     (a) Any person other than a licensed distributor who sells,
9 offers for sale, or has in his possession with intent to sell
10 or offer for sale, more than 100 original packages, not tax
11 stamped or tax imprinted underneath the sealed transparent
12 wrapper of such original package in accordance with this Act,
13 shall be guilty of a Class 4 felony.
14     (a-5) Any person other than a licensed distributor who
15 sells, offers for sale, or has in his possession with intent to
16 sell or offer for sale, 100 or fewer original packages, not tax
17 stamped or tax imprinted underneath the sealed transparent
18 wrapper of the original package in accordance with this Act, is
19 guilty of a Class A misdemeanor for the first offense and a
20 Class 4 felony for each subsequent offense.
21     (b) Any distributor who sells an original package of
22 cigarettes, not tax stamped or tax imprinted underneath the
23 sealed transparent wrapper of such original package in
24 accordance with this Act, except when the sale is made under
25 such circumstances that the tax imposed by this Act may not
26 legally be levied because of the Constitution or laws of the

 

 

SB0451 Enrolled - 48 - LRB096 06559 RCE 16643 b

1 United States, shall be guilty of a Class 3 felony.
2 (Source: P.A. 92-322, eff. 1-1-02.)
 
3     (35 ILCS 130/28a new)
4     Sec. 28a. If, at the time of terminating his or her
5 business, any licensed distributor has on hand unused stamps,
6 the distributor or his or her legal representative may, after
7 Department approval, transfer or sell those unused stamps to
8 another distributor licensed under this Act. The transferring
9 distributor, or his or her legal representative, shall report
10 to the Department in writing an intention to so sell or
11 transfer the stamps and the name and address of the distributor
12 to whom the sale or transfer is to be made, together with the
13 total of the face amount of each denomination of stamps to be
14 so sold or transferred. The Department shall approve or
15 disapprove the requested transfer within 48 hours after
16 receiving the report. Approval shall be deemed granted if not
17 received by the distributor within 5 business days after the
18 Department's receipt of the report.
 
19     (35 ILCS 130/3-15 rep.)
20     Section 10. The Cigarette Tax Act is amended by repealing
21 Section 3-15.
 
22     Section 15. The Cigarette Use Tax Act is amended by
23 changing Sections 1, 3, 3-10, 4, 7, 24, 25, 25a, 25b, and 30

 

 

SB0451 Enrolled - 49 - LRB096 06559 RCE 16643 b

1 and by adding Section 4d as follows:
 
2     (35 ILCS 135/1)  (from Ch. 120, par. 453.31)
3     Sec. 1. For the purpose of this Act, unless otherwise
4 required by the context:
5     "Use" means the exercise by any person of any right or
6 power over cigarettes incident to the ownership or possession
7 thereof, other than the making of a sale thereof in the course
8 of engaging in a business of selling cigarettes and shall
9 include the keeping or retention of cigarettes for use, except
10 that "use" does not include the use of cigarettes by a
11 not-for-profit research institution conducting tests
12 concerning the health effects of tobacco products, provided the
13 cigarettes are not offered for resale.
14     "Brand Style" means a variety of cigarettes distinguished
15 by the tobacco used, tar and nicotine content, flavoring used,
16 size of the cigarette, filtration on the cigarette or
17 packaging.
18     "Cigarette" means any roll for smoking made wholly or in
19 part of tobacco irrespective of size or shape and whether or
20 not such tobacco is flavored, adulterated or mixed with any
21 other ingredient, and the wrapper or cover of which is made of
22 paper or any other substance or material except tobacco.
23     "Contraband cigarettes" means:
24         (a) cigarettes that do not bear a required tax stamp
25     under this Act;

 

 

SB0451 Enrolled - 50 - LRB096 06559 RCE 16643 b

1         (b) cigarettes for which any required federal taxes
2     have not been paid;
3         (c) cigarettes that bear a counterfeit tax stamp;
4         (d) cigarettes that are manufactured, fabricated,
5     assembled, processed, packaged, or labeled by any person
6     other than (i) the owner of the trademark rights in the
7     cigarette brand or (ii) a person that is directly or
8     indirectly authorized by such owner;
9         (e) cigarettes imported into the United States, or
10     otherwise distributed, in violation of the federal
11     Imported Cigarette Compliance Act of 2000 (Title IV of
12     Public Law 106-476); or
13         (f) cigarettes that have false manufacturing labels; .
14         (g) cigarettes identified in Section 3-10(a)(1) of
15     this Act; or
16         (h) cigarettes that are improperly tax stamped,
17     including cigarettes that bear a tax stamp of another state
18     or taxing jurisdiction.
19     "Person" means any natural individual, firm, partnership,
20 association, joint stock company, joint adventure, public or
21 private corporation, however formed, limited liability
22 company, or a receiver, executor, administrator, trustee,
23 guardian or other representative appointed by order of any
24 court.
25     "Department" means the Department of Revenue.
26     "Sale" means any transfer, exchange or barter in any manner

 

 

SB0451 Enrolled - 51 - LRB096 06559 RCE 16643 b

1 or by any means whatsoever for a consideration, and includes
2 and means all sales made by any person.
3     "Original Package" means the individual packet, box or
4 other container whatsoever used to contain and to convey
5 cigarettes to the consumer.
6     "Distributor" means any and each of the following:
7         a. Any person engaged in the business of selling
8     cigarettes in this State who brings or causes to be brought
9     into this State from without this State any original
10     packages of cigarettes, on which original packages there is
11     no authorized evidence underneath a sealed transparent
12     wrapper showing that the tax liability imposed by this Act
13     has been paid or assumed by the out-of-State seller of such
14     cigarettes, for sale in the course of such business.
15         b. Any person who makes, manufactures or fabricates
16     cigarettes in this State for sale, except a person who
17     makes, manufactures or fabricates cigarettes for sale to
18     residents incarcerated in penal institutions or resident
19     patients or a State-operated mental health facility.
20         c. Any person who makes, manufactures or fabricates
21     cigarettes outside this State, which cigarettes are placed
22     in original packages contained in sealed transparent
23     wrappers, for delivery or shipment into this State, and who
24     elects to qualify and is accepted by the Department as a
25     distributor under Section 7 of this Act.
26     "Distributor" does not include any person who transfers

 

 

SB0451 Enrolled - 52 - LRB096 06559 RCE 16643 b

1 cigarettes to a not-for-profit research institution that
2 conducts tests concerning the health effects of tobacco
3 products and who does not offer the cigarettes for resale.
4     "Distributor maintaining a place of business in this
5 State", or any like term, means any distributor having or
6 maintaining within this State, directly or by a subsidiary, an
7 office, distribution house, sales house, warehouse or other
8 place of business, or any agent operating within this State
9 under the authority of the distributor or its subsidiary,
10 irrespective of whether such place of business or agent is
11 located here permanently or temporarily, or whether such
12 distributor or subsidiary is licensed to transact business
13 within this State.
14     "Business" means any trade, occupation, activity or
15 enterprise engaged in or conducted in this State for the
16 purpose of selling cigarettes.
17     "Prior Continuous Compliance Taxpayer" means any person
18 who is licensed under this Act and who, having been a licensee
19 for a continuous period of 5 years, is determined by the
20 Department not to have been either delinquent or deficient in
21 the payment of tax liability during that period or otherwise in
22 violation of this Act. Also, any taxpayer who has, as verified
23 by the Department, continuously complied with the condition of
24 his bond or other security under provisions of this Act of a
25 period of 5 consecutive years shall be considered to be a
26 "prior continuous compliance taxpayer". In calculating the

 

 

SB0451 Enrolled - 53 - LRB096 06559 RCE 16643 b

1 consecutive period of time described herein for qualification
2 as a "prior continuous compliance taxpayer", a consecutive
3 period of time of qualifying compliance immediately prior to
4 the effective date of this amendatory Act of 1987 shall be
5 credited to any licensee who became licensed on or before the
6 effective date of this amendatory Act of 1987.
7     "Stamp" or "stamps" mean the indicia required to be affixed
8 on a pack of cigarettes that evidence payment of the tax on
9 cigarettes under Section 2 of this Act (35 ILCS 130/2), or the
10 indicia used to indicate that the cigarettes are intended for a
11 sale or distribution within this State that is exempt from
12 State tax under any applicable provision of law.
13     "Within this State" means within the exterior limits of the
14 State of Illinois and includes all territory within these
15 limits owned by or ceded to the United States of America.
16     "Related party" means any person that is associated with
17 any other person because he or she:
18         (a) is an officer or director of a business; or
19         (b) is legally recognized as a partner in business. ;
20     or
21         (c) is directly or indirectly controlled by another.
22 (Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10.)
 
23     (35 ILCS 135/3)  (from Ch. 120, par. 453.33)
24     Sec. 3. Stamp payment. The tax hereby imposed shall be
25 collected by a distributor maintaining a place of business in

 

 

SB0451 Enrolled - 54 - LRB096 06559 RCE 16643 b

1 this State or a distributor authorized by the Department
2 pursuant to Section 7 hereof to collect the tax, and the amount
3 of the tax shall be added to the price of the cigarettes sold
4 by such distributor. Collection of the tax shall be evidenced
5 by a stamp or stamps affixed to each original package of
6 cigarettes or by an authorized substitute for such stamp
7 imprinted on each original package of such cigarettes
8 underneath the sealed transparent outside wrapper of such
9 original package, except as hereinafter provided. Each
10 distributor who is required or authorized to collect the tax
11 herein imposed, before delivering or causing to be delivered
12 any original packages of cigarettes in this State to any
13 purchaser, shall firmly affix a proper stamp or stamps to each
14 such package, or (in the case of manufacturers of cigarettes in
15 original packages which are contained inside a sealed
16 transparent wrapper) shall imprint the required language on the
17 original package of cigarettes beneath such outside wrapper as
18 hereinafter provided. Such stamp or stamps need not be affixed
19 to the original package of any cigarettes with respect to which
20 the distributor is required to affix a like stamp or stamps by
21 virtue of the Cigarette Tax Act, however, and no tax imprint
22 need be placed underneath the sealed transparent wrapper of an
23 original package of cigarettes with respect to which the
24 distributor is required or authorized to employ a like tax
25 imprint by virtue of the Cigarette Tax Act.
26     No stamp or imprint may be affixed to, or made upon, any

 

 

SB0451 Enrolled - 55 - LRB096 06559 RCE 16643 b

1 package of cigarettes unless that package complies with all
2 requirements of the federal Cigarette Labeling and Advertising
3 Act, 15 U.S.C. 1331 and following, for the placement of labels,
4 warnings, or any other information upon a package of cigarettes
5 that is sold within the United States. Under the authority of
6 Section 6, the Department shall revoke the license of any
7 distributor that is determined to have violated this paragraph.
8 A person may not affix a stamp on a package of cigarettes,
9 cigarette papers, wrappers, or tubes if that individual package
10 has been marked for export outside the United States with a
11 label or notice in compliance with Section 290.185 of Title 27
12 of the Code of Federal Regulations. It is not a defense to a
13 proceeding for violation of this paragraph that the label or
14 notice has been removed, mutilated, obliterated, or altered in
15 any manner.
16     Only distributors licensed under this Act and
17 transporters, as defined in Section 9c of the Cigarette Tax
18 Act, may possess unstamped original packages of cigarettes.
19 Prior to shipment to an Illinois retailer, a stamp shall be
20 applied to each original package of cigarettes sold to the
21 retailer. A distributor may apply a tax stamp only to an
22 original package of cigarettes purchased or obtained directly
23 from an in-state maker, manufacturer, or fabricator licensed as
24 a distributor under Section 4 of this Act or an out-of-state
25 maker, manufacturer, or fabricator holding a permit under
26 Section 7 of this Act. A licensed distributor may ship or

 

 

SB0451 Enrolled - 56 - LRB096 06559 RCE 16643 b

1 otherwise cause to be delivered unstamped original packages of
2 cigarettes in, into, or from this State. A licensed distributor
3 may transport unstamped original packages of cigarettes to a
4 facility, wherever located, owned or controlled by such
5 distributor; however, a distributor may not transport
6 unstamped original packages of cigarettes to a facility where
7 retail sales of cigarettes take place. Any licensed distributor
8 that ships or otherwise causes to be delivered unstamped
9 original packages of cigarettes into, within, or from this
10 State shall ensure that the invoice or equivalent documentation
11 and the bill of lading or freight bill for the shipment
12 identifies the true name and address of the consignor or
13 seller, the true name and address of the consignee or
14 purchaser, and the quantity by brand style of the cigarettes so
15 transported, provided that this Section shall not be construed
16 as to impose any requirement or liability upon any common or
17 contract carrier.
18     Stamps, when required hereunder, shall be purchased from
19 the Department, or any person authorized by the Department, by
20 distributors. On and after July 1, 2003, payment for such
21 stamps must be made by means of electronic funds transfer. The
22 Department may refuse to sell stamps to any person who does not
23 comply with the provisions of this Act. Beginning on June 6,
24 2002 and through June 30, 2002, persons holding valid licenses
25 as distributors may purchase cigarette tax stamps up to an
26 amount equal to 115% of the distributor's average monthly

 

 

SB0451 Enrolled - 57 - LRB096 06559 RCE 16643 b

1 cigarette tax stamp purchases over the 12 calendar months prior
2 to June 6, 2002.
3     Prior to December 1, 1985, the Department shall allow a
4 distributor 21 days in which to make final payment of the
5 amount to be paid for such stamps, by allowing the distributor
6 to make payment for the stamps at the time of purchasing them
7 with a draft which shall be in such form as the Department
8 prescribes, and which shall be payable within 21 days
9 thereafter: Provided that such distributor has filed with the
10 Department, and has received the Department's approval of, a
11 bond, which is in addition to the bond required under Section 4
12 of this Act, payable to the Department in an amount equal to
13 80% of such distributor's average monthly tax liability to the
14 Department under this Act during the preceding calendar year or
15 $500,000, whichever is less. The bond shall be joint and
16 several and shall be in the form of a surety company bond in
17 such form as the Department prescribes, or it may be in the
18 form of a bank certificate of deposit or bank letter of credit.
19 The bond shall be conditioned upon the distributor's payment of
20 the amount of any 21-day draft which the Department accepts
21 from that distributor for the delivery of stamps to that
22 distributor under this Act. The distributor's failure to pay
23 any such draft, when due, shall also make such distributor
24 automatically liable to the Department for a penalty equal to
25 25% of the amount of such draft.
26     On and after December 1, 1985 and until July 1, 2003, the

 

 

SB0451 Enrolled - 58 - LRB096 06559 RCE 16643 b

1 Department shall allow a distributor 30 days in which to make
2 final payment of the amount to be paid for such stamps, by
3 allowing the distributor to make payment for the stamps at the
4 time of purchasing them with a draft which shall be in such
5 form as the Department prescribes, and which shall be payable
6 within 30 days thereafter, and beginning on January 1, 2003 and
7 thereafter, the draft shall be payable by means of electronic
8 funds transfer: Provided that such distributor has filed with
9 the Department, and has received the Department's approval of,
10 a bond, which is in addition to the bond required under Section
11 4 of this Act, payable to the Department in an amount equal to
12 150% of such distributor's average monthly tax liability to the
13 Department under this Act during the preceding calendar year or
14 $750,000, whichever is less, except that as to bonds filed on
15 or after January 1, 1987, such additional bond shall be in an
16 amount equal to 100% of such distributor's average monthly tax
17 liability under this Act during the preceding calendar year or
18 $750,000, whichever is less. The bond shall be joint and
19 several and shall be in the form of a surety company bond in
20 such form as the Department prescribes, or it may be in the
21 form of a bank certificate of deposit or bank letter of credit.
22 The bond shall be conditioned upon the distributor's payment of
23 the amount of any 30-day draft which the Department accepts
24 from that distributor for the delivery of stamps to that
25 distributor under this Act. The distributor's failure to pay
26 any such draft, when due, shall also make such distributor

 

 

SB0451 Enrolled - 59 - LRB096 06559 RCE 16643 b

1 automatically liable to the Department for a penalty equal to
2 25% of the amount of such draft.
3     Every prior continuous compliance taxpayer shall be exempt
4 from all requirements under this Section concerning the
5 furnishing of such bond, as defined in this Section, as a
6 condition precedent to his being authorized to engage in the
7 business licensed under this Act. This exemption shall continue
8 for each such taxpayer until such time as he may be determined
9 by the Department to be delinquent in the filing of any
10 returns, or is determined by the Department (either through the
11 Department's issuance of a final assessment which has become
12 final under the Act, or by the taxpayer's filing of a return
13 which admits tax to be due that is not paid) to be delinquent
14 or deficient in the paying of any tax under this Act, at which
15 time that taxpayer shall become subject to the bond
16 requirements of this Section and, as a condition of being
17 allowed to continue to engage in the business licensed under
18 this Act, shall be required to furnish bond to the Department
19 in such form as provided in this Section. Such taxpayer shall
20 furnish such bond for a period of 2 years, after which, if the
21 taxpayer has not been delinquent in the filing of any returns,
22 or delinquent or deficient in the paying of any tax under this
23 Act, the Department may reinstate such person as a prior
24 continuance compliance taxpayer. Any taxpayer who fails to pay
25 an admitted or established liability under this Act may also be
26 required to post bond or other acceptable security with the

 

 

SB0451 Enrolled - 60 - LRB096 06559 RCE 16643 b

1 Department guaranteeing the payment of such admitted or
2 established liability.
3     Any person aggrieved by any decision of the Department
4 under this Section may, within the time allowed by law, protest
5 and request a hearing, whereupon the Department shall give
6 notice and shall hold a hearing in conformity with the
7 provisions of this Act and then issue its final administrative
8 decision in the matter to such person. In the absence of such a
9 protest filed within the time allowed by law, the Department's
10 decision shall become final without any further determination
11 being made or notice given.
12     The Department shall discharge any surety and shall release
13 and return any bond or security deposited, assigned, pledged,
14 or otherwise provided to it by a taxpayer under this Section
15 within 30 days after:
16         (1) such Taxpayer becomes a prior continuous
17     compliance taxpayer; or
18         (2) such taxpayer has ceased to collect receipts on
19     which he is required to remit tax to the Department, has
20     filed a final tax return, and has paid to the Department an
21     amount sufficient to discharge his remaining tax liability
22     as determined by the Department under this Act. The
23     Department shall make a final determination of the
24     taxpayer's outstanding tax liability as expeditiously as
25     possible after his final tax return has been filed. If the
26     Department cannot make such final determination within 45

 

 

SB0451 Enrolled - 61 - LRB096 06559 RCE 16643 b

1     days after receiving the final tax return, within such
2     period it shall so notify the taxpayer, stating its reasons
3     therefor.
4     At the time of purchasing such stamps from the Department
5 when purchase is required by this Act, or at the time when the
6 tax which he has collected is remitted by a distributor to the
7 Department without the purchase of stamps from the Department
8 when that method of remitting the tax that has been collected
9 is required or authorized by this Act, the distributor shall be
10 allowed a discount during any year commencing July 1 and ending
11 the following June 30 in accordance with the schedule set out
12 hereinbelow, from the amount to be paid by him to the
13 Department for such stamps, or to be paid by him to the
14 Department on the basis of monthly remittances (as the case may
15 be), to cover the cost, to such distributor, of collecting the
16 tax herein imposed by affixing such stamps to the original
17 packages of cigarettes sold by such distributor or by placing
18 tax imprints underneath the sealed transparent wrapper of
19 original packages of cigarettes sold by such distributor (as
20 the case may be): (1) Prior to December 1, 1985, a discount
21 equal to 1-2/3% of the amount of the tax up to and including
22 the first $700,000 paid hereunder by such distributor to the
23 Department during any such year; 1-1/3% of the next $700,000 of
24 tax or any part thereof, paid hereunder by such distributor to
25 the Department during any such year; 1% of the next $700,000 of
26 tax, or any part thereof, paid hereunder by such distributor to

 

 

SB0451 Enrolled - 62 - LRB096 06559 RCE 16643 b

1 the Department during any such year; and 2/3 of 1% of the
2 amount of any additional tax paid hereunder by such distributor
3 to the Department during any such year or (2) On and after
4 December 1, 1985, a discount equal to 1.75% of the amount of
5 the tax payable under this Act up to and including the first
6 $3,000,000 paid hereunder by such distributor to the Department
7 during any such year and 1.5% of the amount of any additional
8 tax paid hereunder by such distributor to the Department during
9 any such year.
10     Two or more distributors that use a common means of
11 affixing revenue tax stamps or that are owned or controlled by
12 the same interests shall be treated as a single distributor for
13 the purpose of computing the discount.
14     Cigarette manufacturers who are distributors under Section
15 7(a) of this Act, and who place their cigarettes in original
16 packages which are contained inside a sealed transparent
17 wrapper, shall be required to remit the tax which they are
18 required to collect under this Act to the Department by
19 remitting the amount thereof to the Department by the 5th day
20 of each month, covering cigarettes shipped or otherwise
21 delivered to points in Illinois to purchasers during the
22 preceding calendar month, but a distributor need not remit to
23 the Department the tax so collected by him from purchasers
24 under this Act to the extent to which such distributor is
25 required to remit the tax imposed by the Cigarette Tax Act to
26 the Department with respect to the same cigarettes. All taxes

 

 

SB0451 Enrolled - 63 - LRB096 06559 RCE 16643 b

1 upon cigarettes under this Act are a direct tax upon the retail
2 consumer and shall conclusively be presumed to be precollected
3 for the purpose of convenience and facility only. Cigarette
4 manufacturers that are distributors licensed under Section
5 7(a) of this Act and Distributors who place their are
6 manufacturers of cigarettes in original packages which are
7 contained inside a sealed transparent wrapper, before
8 delivering such cigarettes or causing such cigarettes to be
9 delivered in this State to purchasers, shall evidence their
10 obligation to collect and remit the tax due with respect to
11 such cigarettes by imprinting language to be prescribed by the
12 Department on each original package of such cigarettes
13 underneath the sealed transparent outside wrapper of such
14 original package, in such place thereon and in such manner as
15 the Department may prescribe; provided (as stated
16 hereinbefore) that this requirement does not apply when such
17 distributor is required or authorized by the Cigarette Tax Act
18 to place the tax imprint provided for in the last paragraph of
19 Section 3 of that Act underneath the sealed transparent wrapper
20 of such original package of cigarettes. Such imprinted language
21 shall acknowledge the manufacturer's collection and payment of
22 or liability for the tax imposed by this Act with respect to
23 such cigarettes.
24     The Department shall adopt the design or designs of the tax
25 stamps and shall procure the printing of such stamps in such
26 amounts and denominations as it deems necessary to provide for

 

 

SB0451 Enrolled - 64 - LRB096 06559 RCE 16643 b

1 the affixation of the proper amount of tax stamps to each
2 original package of cigarettes.
3     Where tax stamps are required, the Department may authorize
4 distributors to affix revenue tax stamps by imprinting tax
5 meter stamps upon original packages of cigarettes. The
6 Department shall adopt rules and regulations relating to the
7 imprinting of such tax meter stamps as will result in payment
8 of the proper taxes as herein imposed. No distributor may affix
9 revenue tax stamps to original packages of cigarettes by
10 imprinting meter stamps thereon unless such distributor has
11 first obtained permission from the Department to employ this
12 method of affixation. The Department shall regulate the use of
13 tax meters and may, to assure the proper collection of the
14 taxes imposed by this Act, revoke or suspend the privilege,
15 theretofore granted by the Department to any distributor, to
16 imprint tax meter stamps upon original packages of cigarettes.
17     The tax hereby imposed and not paid pursuant to this
18 Section shall be paid to the Department directly by any person
19 using such cigarettes within this State, pursuant to Section 12
20 hereof.
21     A distributor shall not affix, or cause to be affixed, any
22 stamp or imprint to a package of cigarettes, as provided for in
23 this Section, if the tobacco product manufacturer, as defined
24 in Section 10 of the Tobacco Product Manufacturers' Escrow Act,
25 that made or sold the cigarettes has failed to become a
26 participating manufacturer, as defined in subdivision (a)(1)

 

 

SB0451 Enrolled - 65 - LRB096 06559 RCE 16643 b

1 of Section 15 of the Tobacco Product Manufacturers' Escrow Act,
2 or has failed to create a qualified escrow fund for any
3 cigarettes manufactured by the tobacco product manufacturer
4 and sold in this State or otherwise failed to bring itself into
5 compliance with subdivision (a)(2) of Section 15 of the Tobacco
6 Product Manufacturers' Escrow Act.
7 (Source: P.A. 92-322, eff. 1-1-02; 92-536, eff. 6-6-02; 92-737,
8 eff. 7-25-02; 93-22, eff. 6-20-03.)
 
9     (35 ILCS 135/3-10)
10     Sec. 3-10. Cigarette enforcement.
11     (a) Prohibitions. It is unlawful for any person:
12         (1) to sell or distribute in this State; to acquire,
13     hold, own, possess, or transport, for sale or distribution
14     in this State; or to import, or cause to be imported into
15     this State for sale or distribution in this State:
16             (A) any cigarettes the package of which:
17                 (i) bears any statement, label, stamp,
18             sticker, or notice indicating that the
19             manufacturer did not intend the cigarettes to be
20             sold, distributed, or used in the United States,
21             including but not limited to labels stating "For
22             Export Only", "U.S. Tax Exempt", "For Use Outside
23             U.S.", or similar wording; or
24                 (ii) does not comply with:
25                     (aa) all requirements imposed by or

 

 

SB0451 Enrolled - 66 - LRB096 06559 RCE 16643 b

1                 pursuant to federal law regarding warnings and
2                 other information on packages of cigarettes
3                 manufactured, packaged, or imported for sale,
4                 distribution, or use in the United States,
5                 including but not limited to the precise
6                 warning labels specified in the federal
7                 Cigarette Labeling and Advertising Act, 15
8                 U.S.C. 1333; and
9                     (bb) all federal trademark and copyright
10                 laws;
11             (B) any cigarettes imported into the United States
12         in violation of 26 U.S.C. 5754 or any other federal
13         law, or implementing federal regulations;
14             (C) any cigarettes that such person otherwise
15         knows or has reason to know the manufacturer did not
16         intend to be sold, distributed, or used in the United
17         States; or
18             (D) any cigarettes for which there has not been
19         submitted to the Secretary of the U.S. Department of
20         Health and Human Services the list or lists of the
21         ingredients added to tobacco in the manufacture of the
22         cigarettes required by the federal Cigarette Labeling
23         and Advertising Act, 15 U.S.C. 1335a;
24         (2) to alter the package of any cigarettes, prior to
25     sale or distribution to the ultimate consumer, so as to
26     remove, conceal, or obscure:

 

 

SB0451 Enrolled - 67 - LRB096 06559 RCE 16643 b

1             (A) any statement, label, stamp, sticker, or
2         notice described in subdivision (a)(1)(A)(i) of this
3         Section;
4             (B) any health warning that is not specified in, or
5         does not conform with the requirements of, the federal
6         Cigarette Labeling and Advertising Act, 15 U.S.C.
7         1333; or
8         (3) to affix any stamp required pursuant to this Act to
9     the package of any cigarettes described in subdivision
10     (a)(1) of this Section or altered in violation of
11     subdivision (a)(2). ; or
12         (4) to knowingly possess, or possess for sale,
13     contraband cigarettes.
14     (b) Documentation. On the first business day of each month,
15 each person licensed to affix the State tax stamp to cigarettes
16 shall file with the Department, for all cigarettes imported
17 into the United States to which the person has affixed the tax
18 stamp in the preceding month:
19         (1) a copy of:
20             (A) the permit issued pursuant to the Internal
21         Revenue Code, 26 U.S.C. 5713, to the person importing
22         the cigarettes into the United States allowing the
23         person to import the cigarettes; and
24             (B) the customs form containing, with respect to
25         the cigarettes, the internal revenue tax information
26         required by the U.S. Bureau of Alcohol, Tobacco and

 

 

SB0451 Enrolled - 68 - LRB096 06559 RCE 16643 b

1         Firearms;
2         (2) a statement, signed by the person under penalty of
3     perjury, which shall be treated as confidential by the
4     Department and exempt from disclosure under the Freedom of
5     Information Act, identifying the brand and brand styles of
6     all such cigarettes, the quantity of each brand style of
7     such cigarettes, the supplier of such cigarettes, and the
8     person or persons, if any, to whom such cigarettes have
9     been conveyed for resale; and a separate statement, signed
10     by the individual under penalty of perjury, which shall not
11     be treated as confidential or exempt from disclosure,
12     separately identifying the brands and brand styles of such
13     cigarettes; and
14         (3) a statement, signed by an officer of the
15     manufacturer or importer under penalty of perjury,
16     certifying that the manufacturer or importer has complied
17     with:
18             (A) the package health warning and ingredient
19         reporting requirements of the federal Cigarette
20         Labeling and Advertising Act, 15 U.S.C. 1333 and 1335a,
21         with respect to such cigarettes; and
22             (B) the provisions of Exhibit T of the Master
23         Settlement Agreement entered in the case of People of
24         the State of Illinois v. Philip Morris, et al. (Circuit
25         Court of Cook County, No. 96-L13146), including a
26         statement indicating whether the manufacturer is, or

 

 

SB0451 Enrolled - 69 - LRB096 06559 RCE 16643 b

1         is not, a participating tobacco manufacturer within
2         the meaning of Exhibit T.
3     (c) Administrative sanctions.
4         (1) Upon finding that a distributor or a person has
5     committed any of the acts prohibited by subsection (a),
6     knowing or having reason to know that he or she has done
7     so, or has failed to comply with any requirement of
8     subsection (b), the Department may revoke or suspend the
9     license or licenses of any distributor pursuant to the
10     procedures set forth in Section 6 and impose on the
11     distributor, or on the person, a civil penalty in an amount
12     not to exceed the greater of 500% of the retail value of
13     the cigarettes involved or $5,000.
14         (2) Cigarettes that are acquired, held, owned,
15     possessed, transported in, imported into, or sold or
16     distributed in this State in violation of this Section
17     shall be deemed contraband under this Act and are subject
18     to seizure and forfeiture as provided in this Act, and all
19     such cigarettes seized and forfeited shall be destroyed or
20     maintained and used in an undercover capacity. Such
21     cigarettes shall be deemed contraband whether the
22     violation of this Section is knowing or otherwise.
23     (d) Unfair trade practices. In addition to any other
24 penalties provided for in this Act, a A violation of subsection
25 (a) or subsection (b) of this Section shall constitute an
26 unlawful practice as provided in the Consumer Fraud and

 

 

SB0451 Enrolled - 70 - LRB096 06559 RCE 16643 b

1 Deceptive Business Practices Act.
2     (d-1) Retailers shall not be liable under subsections
3 (c)(1) and (d) of this Section for unknowingly possessing,
4 selling, or distributing to consumers or users cigarettes
5 identified in subsection (a)(1) of this Section if the
6 cigarettes possessed, sold, or distributed by the retailer were
7 obtained from a distributor licensed under this Act or the
8 Cigarette Tax Act.
9     (e) Unfair cigarette sales. For purposes of the Trademark
10 Registration and Protection Act and the Counterfeit Trademark
11 Act, cigarettes imported or reimported into the United States
12 for sale or distribution under any trade name, trade dress, or
13 trademark that is the same as, or is confusingly similar to,
14 any trade name, trade dress, or trademark used for cigarettes
15 manufactured in the United States for sale or distribution in
16 the United States shall be presumed to have been purchased
17 outside of the ordinary channels of trade.
18     (f) General provisions.
19         (1) This Section shall be enforced by the Department;
20     provided that, at the request of the Director of Revenue or
21     the Director's duly authorized agent, the State police and
22     all local police authorities shall enforce the provisions
23     of this Section. The Attorney General has concurrent power
24     with the State's Attorney of any county to enforce this
25     Section.
26         (2) For the purpose of enforcing this Section, the

 

 

SB0451 Enrolled - 71 - LRB096 06559 RCE 16643 b

1     Director of Revenue and any agency to which the Director
2     has delegated enforcement responsibility pursuant to
3     subdivision (f)(1) may request information from any State
4     or local agency and may share information with and request
5     information from any federal agency and any agency of any
6     other state or any local agency of any other state.
7         (3) In addition to any other remedy provided by law,
8     including enforcement as provided in subdivision (a)(1),
9     any person may bring an action for appropriate injunctive
10     or other equitable relief for a violation of this Section;
11     actual damages, if any, sustained by reason of the
12     violation; and, as determined by the court, interest on the
13     damages from the date of the complaint, taxable costs, and
14     reasonable attorney's fees. If the trier of fact finds that
15     the violation is flagrant, it may increase recovery to an
16     amount not in excess of 3 times the actual damages
17     sustained by reason of the violation.
18     (g) Definitions. As used in this Section:
19     "Importer" means that term as defined in 26 U.S.C. 5702(1).
20     "Package" means that term as defined in 15 U.S.C. 1332(4).
21     (h) Applicability.
22         (1) This Section does not apply to:
23             (A) cigarettes allowed to be imported or brought
24         into the United States for personal use; and
25             (B) cigarettes sold or intended to be sold as
26         duty-free merchandise by a duty-free sales enterprise

 

 

SB0451 Enrolled - 72 - LRB096 06559 RCE 16643 b

1         in accordance with the provisions of 19 U.S.C. 1555(b)
2         and any implementing regulations; except that this
3         Section shall apply to any such cigarettes that are
4         brought back into the customs territory for resale
5         within the customs territory.
6         (2) The penalties provided in this Section are in
7     addition to any other penalties imposed under other
8     provision of law.
9 (Source: P.A. 95-1053, eff. 1-1-10.)
 
10     (35 ILCS 135/4)  (from Ch. 120, par. 453.34)
11     Sec. 4. Distributor's license. A distributor maintaining a
12 place of business in this State, if required to procure a
13 license or allowed to obtain a permit as a distributor under
14 the Cigarette Tax Act, need not obtain an additional license or
15 permit under this Act, but shall be deemed to be sufficiently
16 licensed or registered by virtue of his being licensed or
17 registered under the Cigarette Tax Act.
18     Every distributor maintaining a place of business in this
19 State, if not required to procure a license or allowed to
20 obtain a permit as a distributor under the Cigarette Tax Act,
21 shall make a verified application to the Department (upon a
22 form prescribed and furnished by the Department) for a license
23 to act as a distributor under this Act. In completing such
24 application, the applicant shall furnish such information as
25 the Department may reasonably require.

 

 

SB0451 Enrolled - 73 - LRB096 06559 RCE 16643 b

1     The annual license fee payable to the Department for each
2 distributor's license shall be $250. The purpose of such annual
3 license fee is to defray the cost, to the Department, of
4 serializing cigarette tax stamps. The applicant for license
5 shall pay such fee to the Department at the time of submitting
6 the application for license to the Department.
7     Such applicant shall file, with his application, a joint
8 and several bond. Such bond shall be executed to the Department
9 of Revenue, with good and sufficient surety or sureties
10 residing or licensed to do business within the State of
11 Illinois, in the amount of $2,500, conditioned upon the true
12 and faithful compliance by the licensee with all of the
13 provisions of this Act. Such bond, or a reissue thereof, or a
14 substitute therefor, shall be kept in effect during the entire
15 period covered by the license. A separate application for
16 license shall be made, a separate annual license fee paid, and
17 a separate bond filed, for each place of business at or from
18 which the applicant proposes to act as a distributor under this
19 Act and for which the applicant is not required to procure a
20 license or allowed to obtain a permit as a distributor under
21 the Cigarette Tax Act.
22     The following are ineligible to receive a distributor's
23 license under this Act:
24         (1) a person who is not of good character and
25     reputation in the community in which he resides;
26         (2) a person who has been convicted of a felony under

 

 

SB0451 Enrolled - 74 - LRB096 06559 RCE 16643 b

1     any Federal or State law, if the Department, after
2     investigation and a hearing, if requested by the applicant,
3     determines that such person has not been sufficiently
4     rehabilitated to warrant the public trust;
5         (3) a corporation, if any officer, manager or director
6     thereof, or any stockholder or stockholders owning in the
7     aggregate more than 5% of the stock of such corporation,
8     would not be eligible to receive a license hereunder for
9     any reason; .
10         (4) a person, or any person who owns more than 15
11     percent of the ownership interests in a person or a related
12     party who:
13             (a) owes, at the time of application, any $500 or
14         more in delinquent cigarette taxes that have been
15         determined by law to be due and unpaid, unless the
16         license applicant has entered into an agreement
17         approved by the Department to pay the amount due;
18             (b) had a license under this Act revoked within the
19         past 2 years by the Department for willful misconduct
20         relating to stolen or contraband cigarettes or has been
21         convicted of a State or federal crime, punishable by
22         imprisonment of one year or more, relating to stolen or
23         contraband cigarettes;
24             (c) is a distributor who manufactures cigarettes,
25         whether in this State or out of this State, and who is
26         neither (i) a participating manufacturer as defined in

 

 

SB0451 Enrolled - 75 - LRB096 06559 RCE 16643 b

1         subsection II(jj) of the "Master Settlement Agreement"
2         as defined in Sections 10 of the Tobacco Products
3         Manufacturers' Escrow Act and the Tobacco Products
4         Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS
5         168/10 and 30 ILCS 167/10); nor (ii) in full compliance
6         with Tobacco Products Manufacturers' Escrow Act and
7         the Tobacco Products Manufacturers' Escrow Enforcement
8         Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);
9             (d) has been found by the Department, after notice
10         and a hearing, to have willfully imported or caused to
11         be imported into the United States for sale or
12         distribution any cigarette in violation of 19 U.S.C.
13         1681a;
14             (e) has been found by the Department, after notice
15         and a hearing, to have willfully imported or caused to
16         be imported into the United States for sale or
17         distribution or manufactured for sale or distribution
18         in the United States any cigarette that does not fully
19         comply with the Federal Cigarette Labeling and
20         Advertising Act (15 U.S.C. 1331, et seq.); or
21             (f) has been found by the Department, after notice
22         and a hearing, to have willfully made a material false
23         statement in the application or has willfully failed to
24         produce records required to be maintained by this Act.
25     Upon approval of such application and bond and payment of
26 the required annual license fee, the Department shall issue a

 

 

SB0451 Enrolled - 76 - LRB096 06559 RCE 16643 b

1 license to the applicant. Such license shall permit the
2 applicant to engage in business as a distributor at or from the
3 place shown in his application. All licenses issued by the
4 Department under this Act shall be valid for not to exceed one
5 year after issuance unless sooner revoked, canceled or
6 suspended as in this Act provided. No license issued under this
7 Act is transferable or assignable. Such license shall be
8 conspicuously displayed at the place of business for which it
9 is issued.
10     No distributor licensee acquires any vested interest or
11 compensable property right in a license issued under this Act.
12     A licensed distributor shall notify the Department of any
13 change in the information contained on the application form,
14 including any change in ownership, and shall do so within 30
15 days after any such change.
16     Any person aggrieved by any decision of the Department
17 under this Section may, within 20 days after notice of the
18 decision, protest and request a hearing. Upon receiving a
19 request for a hearing, the Department shall give notice to the
20 person requesting the hearing of the time and place fixed for
21 the hearing and shall hold a hearing in conformity with the
22 provisions of this Act and then issue its final administrative
23 decision in the matter to that person. In the absence of a
24 protest and request for a hearing within 20 days, the
25 Department's decision shall become final without any further
26 determination being made or notice given.

 

 

SB0451 Enrolled - 77 - LRB096 06559 RCE 16643 b

1 (Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
2     (35 ILCS 135/4d new)
3     Sec. 4d. Sales of cigarettes to and by retailers. In-state
4 makers, manufacturers, or fabricators licensed as distributors
5 under Section 4 of this Act and out-of-state makers,
6 manufacturers, or fabricators holding permits under Section 7
7 of this Act may not sell original packages of cigarettes to
8 retailers. A retailer may sell only original packages of
9 cigarettes obtained from licensed distributors other than
10 in-state makers, manufacturers, or fabricators licensed as
11 distributors under Section 4 of this Act and out-of-state
12 makers, manufacturers, or fabricators holding permits under
13 Section 7 of this Act.
 
14     (35 ILCS 135/7)  (from Ch. 120, par. 453.37)
15     Sec. 7. Distributor's permits.
16     (a) The Department may, in its discretion, upon
17 application, issue permits authorizing the collection of the
18 tax herein imposed by those out-of-State cigarette
19 manufacturers who are not required to be licensed as
20 distributors of cigarettes in this State, but who elect to
21 qualify under this Act as distributors of cigarettes in this
22 State, and who, to the satisfaction of the Department, furnish
23 adequate security to insure collection and payment of the tax,
24 provided that any such permit shall extend only to cigarettes

 

 

SB0451 Enrolled - 78 - LRB096 06559 RCE 16643 b

1 which such permittee manufacturer places in original packages
2 that are contained inside a sealed transparent wrapper, and
3 provided that no such permit shall be issued under this Act to
4 such a manufacturer who has obtained the permit provided for in
5 Section 4b(a) of the Cigarette Tax Act. Such distributor shall
6 be issued, without charge, a permit to collect such tax in such
7 manner, and subject to such reasonable regulations and
8 agreements as the Department shall prescribe. When so
9 authorized, it shall be the duty of such distributor to collect
10 the tax upon all cigarettes which he delivers (or causes to be
11 delivered) within this State to licensed distributors
12 purchasers, in the same manner and subject to the same
13 requirements as a distributor maintaining a place of business
14 within this State. Such permit shall be in such form as the
15 Department may prescribe and shall not be transferable or
16 assignable.
17     The following are ineligible to receive a distributor's
18 permit under this Act:
19     (1) a person who is not of good character and reputation in
20 the community in which he resides;
21     (2) a person who has been convicted of a felony under any
22 Federal or State law, if the Department, after investigation
23 and a hearing, if requested by the applicant, determines that
24 such person has not been sufficiently rehabilitated to warrant
25 the public trust;
26     (3) a corporation, if any officer, manager or director

 

 

SB0451 Enrolled - 79 - LRB096 06559 RCE 16643 b

1 thereof, or any stockholder or stockholders owning in the
2 aggregate more than 5% of the stock of such corporation, would
3 not be eligible to receive a permit under this Act for any
4 reason.
5     With respect to cigarettes which come within the scope of
6 such a permit and which any such permittee delivers or causes
7 to be delivered in Illinois to licensed distributors
8 purchasers, such permittee shall collect the tax imposed by
9 this Act and shall remit such tax to the Department by the 5th
10 day of each month for the preceding calendar month. Each such
11 remittance shall be accompanied by a return filed with the
12 Department on a form to be prescribed and furnished by the
13 Department and shall disclose such information as the
14 Department may lawfully require. The Department may promulgate
15 rules to require that the permittee's return be accompanied by
16 appropriate computer-generated magnetic media supporting
17 schedule data in the format prescribed by the Department,
18 unless, as provided by rule, the Department grants an exception
19 upon petition of the permittee. Each such return shall be
20 accompanied by a copy of each invoice rendered by the permittee
21 to any licensed distributor purchaser to whom the permittee
22 delivered cigarettes of the type covered by the permit (or
23 caused cigarettes of the type covered by the permit to be
24 delivered) in Illinois during the period covered by such
25 return.
26     Such authority and permit may be suspended, canceled or

 

 

SB0451 Enrolled - 80 - LRB096 06559 RCE 16643 b

1 revoked when, at any time, the Department considers that the
2 security given is inadequate, or that such tax can more
3 effectively be collected from the person using such cigarettes
4 in this State or through distributors located in this State, or
5 whenever the permittee violates any provision of this Act or
6 any lawful rule or regulation issued by the Department pursuant
7 to this Act or is determined to be ineligible for a
8 distributor's permit under this Act as provided in this
9 Section, or whenever the permittee shall notify the Department
10 in writing of his desire to have the permit canceled. The
11 Department shall have the power, in its discretion, to issue a
12 new permit after such suspension, cancellation or revocation,
13 except when the person who would receive the permit is
14 ineligible to receive a distributor's permit under this Act.
15     All permits issued by the Department under this Act shall
16 be valid for not to exceed one year after issuance unless
17 sooner revoked, canceled or suspended as in this Act provided.
18     (b) Out-of-state cigarette manufacturers who are not
19 required to be licensed as distributors of cigarettes in this
20 State and who do not elect to obtain approval under subsection
21 (a) to pay the tax imposed by this Act, but who elect to
22 qualify under this Act as distributors of cigarettes in this
23 State for purposes of shipping and delivering unstamped
24 original packages of cigarettes into this State to licensed
25 distributors, shall obtain a permit from the Department,
26 provided that no such permit shall be issued under this

 

 

SB0451 Enrolled - 81 - LRB096 06559 RCE 16643 b

1 subsection to a manufacturer who has obtained the permit
2 provided for in Section 4b(b) of the Cigarette Tax Act. These
3 permits shall be issued without charge in such form as the
4 Department may prescribe and shall not be transferable or
5 assignable.
6     The following are ineligible to receive a distributor's
7 permit under this subsection:
8         (1) a person who is not of good character and
9     reputation in the community in which he or she resides;
10         (2) a person who has been convicted of a felony under
11     any federal or State law, if the Department, after
12     investigation and a hearing, if requested by the applicant,
13     determines that the person has not been sufficiently
14     rehabilitated to warrant the public trust; and
15         (3) a corporation, if any officer, manager or director
16     thereof, or any stockholder or stockholders owning in the
17     aggregate more than 5% of the stock of the corporation,
18     would not be eligible to receive a permit under this Act
19     for any reason.
20     With respect to original packages of cigarettes such
21 permittee delivers or causes to be delivered in Illinois and
22 distributed to the public for promotional purposes without
23 consideration, the permittee shall pay the tax imposed by this
24 Act by remitting the amount thereof to the Department by the
25 5th day of each month covering cigarettes shipped or otherwise
26 delivered in Illinois for those purposes during the preceding

 

 

SB0451 Enrolled - 82 - LRB096 06559 RCE 16643 b

1 calendar month. The permittee, before delivering those
2 cigarettes or causing those cigarettes to be delivered in this
3 State, shall evidence his or her obligation to remit the taxes
4 due with respect to those cigarettes by imprinting language to
5 be prescribed by the Department on each original package of
6 cigarettes, in such place thereon and in such manner also to be
7 prescribed by the Department. The imprinted language shall
8 acknowledge the permittee's payment of or liability for the tax
9 imposed by this Act with respect to the distribution of those
10 cigarettes.
11     With respect to cigarettes such permittee delivers or
12 causes to be delivered in Illinois to Illinois licensed
13 distributors or distributed to the public for promotional
14 purposes, the permittee shall, by the 5th day of each month,
15 file with the Department, a report covering cigarettes shipped
16 or otherwise delivered in Illinois to licensed distributors or
17 distributed to the public for promotional purposes during the
18 preceding calendar month on a form to be prescribed and
19 furnished by the Department and shall disclose such other
20 information as the Department may lawfully require. The
21 Department may promulgate rules to require that the permittee's
22 report be accompanied by appropriate computer-generated
23 magnetic media supporting schedule data in the format
24 prescribed by the Department, unless, as provided by rule, the
25 Department grants an exception upon petition of the permittee.
26 Each such report shall be accompanied by a copy of each invoice

 

 

SB0451 Enrolled - 83 - LRB096 06559 RCE 16643 b

1 rendered by the permittee to any purchaser to whom the
2 permittee delivered cigarettes of the type covered by the
3 permit (or caused cigarettes of the type covered by the permit
4 to be delivered) in Illinois during the period covered by such
5 report.
6     Such permit may be suspended, canceled, or revoked whenever
7 the permittee violates any provision of this Act or any lawful
8 rule or regulation issued by the Department pursuant to this
9 Act, is determined to be ineligible for a distributor's permit
10 under this Act as provided in this Section, or notifies the
11 Department in writing of his or her desire to have the permit
12 canceled. The Department shall have the power, in its
13 discretion, to issue a new permit after such suspension,
14 cancellation, or revocation, except when the person who would
15 receive the permit is ineligible to receive a distributor's
16 permit under this Act.
17     All permits issued by the Department under this Act shall
18 be valid for not to exceed one year after issuance unless
19 sooner revoked, canceled, or suspended as in this Act provided.
20 (Source: P.A. 79-387.)
 
21     (35 ILCS 135/24)  (from Ch. 120, par. 453.54)
22     Sec. 24. Any duly authorized employee of the Department may
23 arrest without warrant any person committing in his presence a
24 violation of any of the provisions of this Act, and may without
25 a search warrant seize any original packages of contraband

 

 

SB0451 Enrolled - 84 - LRB096 06559 RCE 16643 b

1 cigarettes not tax stamped or tax imprinted underneath the
2 sealed transparent wrapper of such original packages in
3 accordance with the provisions of this Act and any vending
4 device in which such packages may be found, and such original
5 packages or vending devices so seized shall be subject to
6 confiscation and forfeiture as hereinafter provided.
7 (Source: Laws 1953, p. 265.)
 
8     (35 ILCS 135/25)  (from Ch. 120, par. 453.55)
9     Sec. 25. After seizing any original packages of cigarettes,
10 or cigarette vending devices, as provided in Section 24 of this
11 Act, the Department shall hold a hearing and shall determine
12 whether such original packages of cigarettes, at the time of
13 their seizure by the Department, were contraband cigarettes not
14 tax stamped or tax imprinted underneath the sealed transparent
15 wrapper of such original packages in accordance with this Act,
16 or whether such cigarette vending devices, at the time of their
17 seizure by the Department, contained original packages of
18 contraband cigarettes not tax stamped or tax imprinted
19 underneath the sealed transparent wrapper of such original
20 packages as required by this Act. The Department shall give not
21 less than 7 days' notice of the time and place of such hearing
22 to the owner of such property if he is known, and also to the
23 person in whose possession the property so taken was found, if
24 such person is known and if such person in possession is not
25 the owner of said property. In case neither the owner nor the

 

 

SB0451 Enrolled - 85 - LRB096 06559 RCE 16643 b

1 person in possession of such property is known, the Department
2 shall cause publication of the time and place of such hearing
3 to be made at least once in each week for 3 weeks successively
4 in a newspaper of general circulation in the county where such
5 hearing is to be held.
6     If, as the result of such hearing, the Department shall
7 determine that the original packages of cigarettes seized were
8 at the time of seizure contraband cigarettes not tax stamped or
9 tax imprinted underneath the sealed transparent wrapper of such
10 original packages as required by this Act, or that any
11 cigarette vending device at the time of its seizure contained
12 original packages of contraband cigarettes not tax stamped or
13 tax imprinted underneath the sealed transparent wrapper of such
14 original packages as required by this Act, the Department shall
15 enter an order declaring such original packages of cigarettes
16 or such cigarette vending devices confiscated and forfeited to
17 the State, and to be held by the Department for disposal by it
18 as provided in Section 27 of this Act. The Department shall
19 give notice of such order to the owner of such property if he
20 is known, and also to the person in whose possession the
21 property so taken was found, if such person is known and if
22 such person in possession is not the owner of said property. In
23 case neither the owner nor the person in possession of such
24 property is known, the Department shall cause publication of
25 such order to be made at least once in each week for 3 weeks
26 successively in a newspaper of general circulation in the

 

 

SB0451 Enrolled - 86 - LRB096 06559 RCE 16643 b

1 county where such hearing was held.
2 (Source: P.A. 76-685.)
 
3     (35 ILCS 135/25a)  (from Ch. 120, par. 453.55a)
4     Sec. 25a. Possession of more than 100 original packages of
5 contraband cigarettes; penalty. With the exception of licensed
6 distributors or transporters, as defined in Section 9c of the
7 Cigarette Tax Act, possessing unstamped original packages of
8 cigarettes, and licensed distributors possessing original
9 packages of cigarettes that bear a tax stamp of another state
10 or taxing jurisdiction, anyone possessing more than 100
11 packages of contraband cigarettes contained in original
12 packages is which are not tax stamped as required by this Act,
13 or which are improperly tax stamped, shall be liable to pay, to
14 the Department for deposit into in the Tax Compliance and
15 Administration Fund State Treasury, a penalty of $25 $15 for
16 each such package of cigarettes in excess of 100 packages,
17 unless reasonable cause can be established by the person upon
18 whom the penalty is imposed. Reasonable cause shall be
19 determined in each situation in accordance with rules adopted
20 by the Department. The provisions of the Uniform Penalty and
21 Interest Act do not apply to this Section. Such penalty may be
22 recovered by the Department in a civil action.
23 (Source: P.A. 83-1428.)
 
24     (35 ILCS 135/25b)

 

 

SB0451 Enrolled - 87 - LRB096 06559 RCE 16643 b

1     Sec. 25b. Possession of not less than 10 and not more than
2 100 original packages not tax stamped or improperly tax
3 stamped; penalty. With the exception of licensed distributors
4 and transporters, as defined in Section 9c of the Cigarette Tax
5 Act, possessing unstamped packages of cigarettes, and licensed
6 distributors possessing original packages of cigarettes that
7 bear a tax stamp of another state or taxing jurisdiction,
8 anyone possessing not less than 10 and not more than 100
9 packages of contraband cigarettes contained in original
10 packages that are not tax stamped as required by this Act, or
11 that are improperly tax stamped, is liable to pay to the
12 Department, for deposit into the Tax Compliance and
13 Administration Fund, a penalty of $20 $10 for each such package
14 of cigarettes, unless reasonable cause can be established by
15 the person upon whom the penalty is imposed. Reasonable cause
16 shall be determined in each situation in accordance with rules
17 adopted by the Department. Any person who purchases and
18 possesses a total of 9 or fewer original packages of unstamped
19 cigarettes per month is exempt from the penalties of this
20 Section. The provisions of the Uniform Penalty and Interest Act
21 do not apply to this Section.
22 (Source: P.A. 92-322, eff. 1-1-02.)
 
23     (35 ILCS 135/30)  (from Ch. 120, par. 453.60)
24     Sec. 30. Punishment for sale or possession of unstamped
25 packages of cigarettes, other than by a licensed distributor or

 

 

SB0451 Enrolled - 88 - LRB096 06559 RCE 16643 b

1 transporter.
2     (a) Possession or sale of more than 9 but less than 101
3 unstamped packages of cigarettes. With the exception of
4 licensed distributors or transporters, as defined in Section 9c
5 of the Cigarette Tax Act, any person who has in his or her
6 possession or sells more than 9 but less than 101 original
7 packages of contraband cigarettes is guilty of a Class A
8 misdemeanor.
9     (b) Possession or sale of more than 100 but less than 251
10 unstamped packages of cigarettes. With the exception of
11 licensed distributors or transporters, as defined in Section 9c
12 of the Cigarette Tax Act, any person who has in his or her
13 possession or sells more than 100 but less than 251 original
14 packages of contraband cigarettes is guilty of a Class A
15 misdemeanor for the first offense and a Class 4 felony for each
16 subsequent offense.
17     (c) Possession or sale of more than 250 but less than 1,001
18 unstamped packages of cigarettes. With the exception of
19 licensed distributors or transporters, as defined in Section 9c
20 of the Cigarette Tax Act, any person who has in his or her
21 possession or sells more than 250 but less than 1,001 original
22 packages of contraband cigarettes is guilty of a Class 4
23 felony.
24     (d) Possession or sale of more than 1,000 contraband
25 packages of cigarettes. With the exception of licensed
26 distributors or transporters, as defined in Section 9c of the

 

 

SB0451 Enrolled - 89 - LRB096 06559 RCE 16643 b

1 Cigarette Tax Act, any person who has in his or her possession
2 or sells, more than 1,000 original packages of contraband
3 cigarettes is guilty of a Class 3 felony.
4     (e) Any person licensed as a distributor or transporter, as
5 defined in Section 9c of the Cigarette Tax Act, who has in his
6 or her possession or sells 100 or less original packages of
7 contraband cigarettes is guilty of a Class A misdemeanor.
8     (f) Any person licensed as a distributor or transporter, as
9 defined in Section 9c of the Cigarette Tax Act, who has in his
10 or her possession or sells more than 100 original packages of
11 contraband cigarettes is guilty of a Class 4 felony.
12     (g) Notwithstanding subsections (e) through (f), licensed
13 distributors and transporters, as defined in Section 9c of the
14 Cigarette Tax Act, may possess unstamped packages of
15 cigarettes. Notwithstanding subsections (e) through (f),
16 licensed distributors may possess cigarettes that bear a tax
17 stamp of another state or taxing jurisdiction. Notwithstanding
18 subsections (e) through (f), a licensed distributor may possess
19 contraband cigarettes returned to the distributor by a retailer
20 if the distributor immediately conducts an inventory of the
21 cigarettes being returned, the distributor and the retailer
22 returning the contraband cigarettes sign the inventory, the
23 distributor provides a copy of the signed inventory to the
24 retailer, and the distributor retains the inventory in its
25 books and records and promptly notifies the Department of
26 Revenue.

 

 

SB0451 Enrolled - 90 - LRB096 06559 RCE 16643 b

1     (h) Notwithstanding subsections (a) through (d) of this
2 Section, a retailer unknowingly possessing contraband
3 cigarettes obtained from a licensed distributor or knowingly
4 possessing contraband cigarettes obtained from a licensed
5 distributor is not subject to penalties under this Section if
6 the retailer, within 48 hours after discovering that the
7 cigarettes are contraband cigarettes, excluding Saturdays,
8 Sundays, and holidays: (i) notifies the Department and the
9 licensed distributor from whom the cigarettes were obtained,
10 orally and in writing, that he or she possesses contraband
11 cigarettes obtained from a licensed distributor; (ii) places
12 the contraband cigarettes in one or more containers and seals
13 those containers; and (iii) places on the containers the
14 following or similar language: "Contraband Cigarettes. Not For
15 Sale." All contraband cigarettes in the possession of a
16 retailer remain subject to forfeiture under the provisions of
17 this Act.
18 Any person other than a licensed distributor who sells, offers
19 for sale, or has in his possession with intent to sell or offer
20 for sale, more than 100 original packages, not tax stamped or
21 tax imprinted underneath the sealed transparent wrapper of such
22 original package in accordance with this Act, shall be guilty
23 of a Class 4 felony.
24     Any person other than a licensed distributor who sells,
25 offers for sale, or has in his possession with intent to sell
26 or offer for sale, 100 or fewer original packages, not tax

 

 

SB0451 Enrolled - 91 - LRB096 06559 RCE 16643 b

1 stamped or tax imprinted underneath the sealed transparent
2 wrapper of the original package in accordance with this Act, is
3 guilty of a Class A misdemeanor for the first offense and a
4 Class 4 felony for each subsequent offense.
5     Any distributor who sells an original package of
6 cigarettes, not tax stamped or tax imprinted underneath the
7 sealed transparent wrapper of such original package in
8 accordance with this Act, except when the sale is made under
9 such circumstances that the tax imposed by this Act may not
10 legally be levied because of the Constitution or laws of the
11 United States, shall be guilty of a Class 3 felony.
12 (Source: P.A. 92-322, eff. 1-1-02.)
 
13     (35 ILCS 135/3-15 rep.)
14     Section 20. The Cigarette Use Tax Act is amended by
15 repealing Section 3-15.
 
16     Section 25. The Prevention of Cigarette Sales to Minors Act
17 is amended by changing Sections 2, 5, 6, 7, 8, and 10 and by
18 adding Section 33 as follows:
 
19     (720 ILCS 678/2)
20     (This Section may contain text from a Public Act with a
21 delayed effective date)
22     Sec. 2. Definitions. For the purpose of this Act:
23     "Cigarette", when used in this Act, means any roll for

 

 

SB0451 Enrolled - 92 - LRB096 06559 RCE 16643 b

1 smoking made wholly or in part of tobacco irrespective of size
2 or shape and whether or not the tobacco is flavored,
3 adulterated, or mixed with any other ingredient, and the
4 wrapper or cover of which is made of paper or any other
5 substance or material except whole leaf tobacco.
6     "Clear and conspicuous statement" means the statement is of
7 sufficient type size to be clearly readable by the recipient of
8 the communication.
9     "Consumer" means an individual who acquires or seeks to
10 acquire cigarettes for personal use.
11     "Delivery sale" means any sale of cigarettes to a consumer
12 if:
13         (a) the consumer submits the order for such sale by
14     means of a telephone or other method of voice transmission,
15     the mails, or the Internet or other online service, or the
16     seller is otherwise not in the physical presence of the
17     buyer when the request for purchase or order is made; or
18         (b) the cigarettes are delivered by use of a common
19     carrier, private delivery service, or the mails, or the
20     seller is not in the physical presence of the buyer when
21     the buyer obtains possession of the cigarettes.
22     "Delivery service" means any person (other than a person
23 that makes a delivery sale) who delivers to the consumer the
24 cigarettes sold in a delivery sale.
25     "Department" means the Department of Revenue.
26     "Government-issued identification" means a State driver's

 

 

SB0451 Enrolled - 93 - LRB096 06559 RCE 16643 b

1 license, State identification card, passport, a military
2 identification or an official naturalization or immigration
3 document, such as an alien registration recipient card
4 (commonly known as a "green card") or an immigrant visa.
5     "Legal minimum age" means the minimum age at which an
6 individual may legally purchase cigarettes within this State,
7 as determined by either State or local government.
8     "Mails" or "mailing" mean the shipment of cigarettes
9 through the United States Postal Service.
10     "Out-of-state sale" means a sale of cigarettes to a
11 consumer located outside of this State where the consumer
12 submits the order for such sale by means of a telephonic or
13 other method of voice transmission, the mails or any other
14 delivery service, facsimile transmission, or the Internet or
15 other online service and where the cigarettes are delivered by
16 use of the mails or other delivery service.
17     "Person" means any individual, corporation, partnership,
18 limited liability company, association, or other organization
19 that engages in any for-profit or not-for-profit activities.
20     "Shipping package" means a container in which packs or
21 cartons of cigarettes are shipped in connection with a delivery
22 sale.
23     "Shipping documents" means bills of lading, air bills, or
24 any other documents used to evidence the undertaking by a
25 delivery service to deliver letters, packages, or other
26 containers.

 

 

SB0451 Enrolled - 94 - LRB096 06559 RCE 16643 b

1     "Within this State" means within the exterior limits of the
2 State of Illinois and includes all territory within these
3 limits owned by or ceded to the United States of America.
4 (Source: P.A. 95-1053, eff. 1-1-10.)
 
5     (720 ILCS 678/5)
6     Sec. 5. Unlawful shipment or transportation of cigarettes.
7     (a) It is unlawful for any person engaged in the business
8 of selling cigarettes to ship or cause to be shipped any
9 cigarettes unless the person shipping the cigarettes:
10         (1) is licensed as a distributor under either the
11     Cigarette Tax Act, or the Cigarette Use Tax Act; or
12     delivers the cigarettes to a distributor licensed under
13     either the Cigarette Tax Act or the Cigarette Use Tax Act;
14     or
15         (2) ships them to an export warehouse proprietor
16     pursuant to Chapter 52 of the Internal Revenue Code, or an
17     operator of a customs bonded warehouse pursuant to Section
18     1311 or 1555 of Title 19 of the United States Code.
19     For purposes of this subsection (a), a person is a licensed
20 distributor if the person's name appears on a list of licensed
21 distributors published by the Illinois Department of Revenue.
22 The term cigarette has the same meaning as defined in Section 1
23 of the Cigarette Tax Act and Section 1 of the Cigarette Use Tax
24 Act. Nothing in this Act prohibits a person licensed as a
25 distributor under the Cigarette Tax Act or the Cigarette Use

 

 

SB0451 Enrolled - 95 - LRB096 06559 RCE 16643 b

1 Tax Act from shipping or causing to be shipped any cigarettes
2 to a registered retailer under the Retailers' Occupation Tax
3 Act and the Cigarette Tax Act provided the cigarette tax or
4 cigarette use tax has been paid.
5     (b) A common or contract carrier may transport cigarettes
6 to any individual person in this State only if the carrier
7 reasonably believes such cigarettes have been received from a
8 person described in paragraph (a)(1). Common or contract
9 carriers may make deliveries of cigarettes to licensed
10 distributors described in paragraph (a)(1) of this Section.
11 Nothing in this subsection (b) shall be construed to prohibit a
12 person other than a common or contract carrier from
13 transporting not more than 1,000 cigarettes at any one time to
14 any person in this State.
15     (c) A common or contract carrier may not complete the
16 delivery of any cigarettes to persons other than those
17 described in paragraph (a)(1) of this Section without first
18 obtaining from the purchaser an official written
19 identification from any state or federal agency that displays
20 the person's date of birth or a birth certificate that includes
21 a reliable confirmation that the purchaser is at least 18 years
22 of age; that the cigarettes purchased are not intended for
23 consumption by an individual who is younger than 18 years of
24 age; and a written statement signed by the purchaser that
25 certifies the purchaser's address and that the purchaser is at
26 least 18 years of age. The statement shall also confirm: (1)

 

 

SB0451 Enrolled - 96 - LRB096 06559 RCE 16643 b

1 that the purchaser understands that signing another person's
2 name to the certification is illegal; (2) that the sale of
3 cigarettes to individuals under 18 years of age is illegal; and
4 (3) that the purchase of cigarettes by individuals under 18
5 years of age is illegal under the laws of Illinois.
6     (d) When a person engaged in the business of selling
7 cigarettes ships or causes to be shipped any cigarettes to any
8 person in this State, other than in the cigarette
9 manufacturer's or tobacco products manufacturer's original
10 container or wrapping, the container or wrapping must be
11 plainly and visibly marked with the word "cigarettes".
12     (e) When a peace officer of this State or any duly
13 authorized officer or employee of the Illinois Department of
14 Public Health or Department of Revenue discovers any cigarettes
15 which have been or which are being shipped or transported in
16 violation of this Section, he or she shall seize and take
17 possession of the cigarettes, and the cigarettes shall be
18 subject to a forfeiture action pursuant to the procedures
19 provided under the Cigarette Tax Act or Cigarette Use Tax Act.
20 (Source: P.A. 95-1053, eff. 1-1-10.)
 
21     (720 ILCS 678/6)
22     (This Section may contain text from a Public Act with a
23 delayed effective date)
24     Sec. 6. Prevention of delivery sales to minors.
25     (a) No person shall make a delivery sale of cigarettes to

 

 

SB0451 Enrolled - 97 - LRB096 06559 RCE 16643 b

1 any individual who is under 18 years of the legal minimum age.
2     (b) Each person accepting a purchase order for a delivery
3 sale shall comply with the provisions of this Act and all other
4 laws of this State generally applicable to sales of cigarettes
5 that occur entirely within this State, including, but not
6 limited to, those laws imposing: (i) excise taxes; (ii) sales
7 taxes; (iii) license and revenue-stamping requirements; and
8 (iv) escrow payment obligations.
9 (Source: P.A. 95-1053, eff. 1-1-10.)
 
10     (720 ILCS 678/7)
11     (This Section may contain text from a Public Act with a
12 delayed effective date)
13     Sec. 7. Age verification and shipping requirements to
14 prevent delivery sales to minors.
15     (a) No person, other than a delivery service, shall mail,
16 ship, or otherwise cause to be delivered a shipping package in
17 connection with a delivery sale unless the person:
18         (1) prior to the first delivery sale to the prospective
19     consumer, obtains from the prospective consumer a written
20     certification which includes a statement signed by the
21     prospective consumer that certifies:
22             (A) the prospective consumer's current address;
23         and
24             (B) that the prospective consumer is at least the
25         legal minimum age;

 

 

SB0451 Enrolled - 98 - LRB096 06559 RCE 16643 b

1         (2) informs, in writing, such prospective consumer
2     that:
3             (A) the signing of another person's name to the
4         certification described in this Section is illegal;
5             (B) sales of cigarettes to individuals under 18
6         years of the legal minimum age are illegal;
7             (C) the purchase of cigarettes by individuals
8         under 18 years of the legal minimum age is illegal; and
9             (D) the name and identity of the prospective
10         consumer may be reported to the state of the consumer's
11         current address under the Act of October 19, 1949 (15
12         U.S.C. § 375, et seq.), commonly known as the Jenkins
13         Act;
14         (3) makes a good faith effort to verify the date of
15     birth of the prospective consumer provided pursuant to this
16     Section by:
17             (A) comparing the date of birth against a
18         commercially available database; or
19             (B) obtaining a photocopy or other image of a
20         valid, government-issued identification stating the
21         date of birth or age of the prospective consumer;
22         (4) provides to the prospective consumer a notice that
23     meets the requirements of subsection (b);
24         (5) receives payment for the delivery sale from the
25     prospective consumer by a credit or debit card that has
26     been issued in such consumer's name, or by a check or other

 

 

SB0451 Enrolled - 99 - LRB096 06559 RCE 16643 b

1     written instrument in such consumer's name; and
2         (6) ensures that the shipping package is delivered to
3     the same address as is shown on the government-issued
4     identification or contained in the commercially available
5     database.
6     (b) The notice required under this Section shall include:
7         (1) a statement that cigarette sales to consumers below
8     18 years of the legal minimum age are illegal;
9         (2) a statement that sales of cigarettes are restricted
10     to those consumers who provide verifiable proof of age in
11     accordance with subsection (a);
12         (3) a statement that cigarette sales are subject to tax
13     under Section 2 of the Cigarette Tax Act (35 ILCS 130/2),
14     Section 2 of the Cigarette Use Tax Act, and Section 3 of
15     the Use Tax Act and an explanation of how the correct such
16     tax has been, or is to be, paid with respect to such
17     delivery sale.
18     (c) A statement meets the requirement of this Section if:
19         (1) the statement is clear and conspicuous;
20         (2) the statement is contained in a printed box set
21     apart from the other contents of the communication;
22         (3) the statement is printed in bold, capital letters;
23         (4) the statement is printed with a degree of color
24     contrast between the background and the printed statement
25     that is no less than the color contrast between the
26     background and the largest text used in the communication;

 

 

SB0451 Enrolled - 100 - LRB096 06559 RCE 16643 b

1     and
2         (5) for any printed material delivered by electronic
3     means, the statement appears at both the top and the bottom
4     of the electronic mail message or both the top and the
5     bottom of the Internet website homepage.
6     (d) Each person, other than a delivery service, who mails,
7 ships, or otherwise causes to be delivered a shipping package
8 in connection with a delivery sale shall:
9         (1) include as part of the shipping documents a clear
10     and conspicuous statement stating: "Cigarettes: Illinois
11     Law Prohibits Shipping to Individuals Under 18 and Requires
12     the Payment of All Applicable Taxes";
13         (2) use a method of mailing, shipping, or delivery that
14     requires a signature before the shipping package is
15     released to the consumer; and
16         (3) ensure that the shipping package is not delivered
17     to any post office box.
18 (Source: P.A. 95-1053, eff. 1-1-10; revised 4-17-09.)
 
19     (720 ILCS 678/8)
20     (This Section may contain text from a Public Act with a
21 delayed effective date)
22     Sec. 8. Registration and reporting requirements to prevent
23 delivery sales to minors.
24     (a) Not later than the 15th day of each month, each person
25 making a delivery sale during the previous calendar month shall

 

 

SB0451 Enrolled - 101 - LRB096 06559 RCE 16643 b

1 file a report with the Department containing the following
2 information: Each person who makes a delivery sale of
3 cigarettes to a consumer located within this State shall file
4 with the Department for each individual sale:
5         (1) the seller's a statement setting forth such
6     person's name, trade name, and the address of such person's
7     principal place of business and any other place of
8     business; and
9         (2) not later than the tenth day of each calendar
10     month, a memorandum or copy of the invoice for each and
11     every such delivery sale made during the previous calendar
12     month, which includes the following information:
13         (2) (A) the name and address of the consumer to whom
14     such delivery sale was made;
15         (3) (B) the brand style or brand styles of the
16     cigarettes that were sold in such delivery sale;
17         (4) (C) the quantity of cigarettes that were sold in
18     such delivery sale; and
19         (5) (D) an indication of whether or not the cigarettes
20     sold in the delivery sale bore a tax stamp evidencing
21     payment of the tax under Section 2 of the Cigarette Tax Act
22     (35 ILCS 130/2); and .
23         (6) such other information the Department may require.
24     (b) Each person engaged in business within this State who
25 makes an out-of-state sale shall, for each individual sale,
26 submit to the appropriate tax official of the state in which

 

 

SB0451 Enrolled - 102 - LRB096 06559 RCE 16643 b

1 the consumer is located the information required in subsection
2 (a).
3     (c) Any person that satisfies the requirements of 15 U.S.C.
4 Section 376 shall be deemed to satisfy the requirements of
5 subsections (a) and (b).
6     (d) The Department is authorized to disclose to the
7 Attorney General any information received under this title and
8 requested by the Attorney General. The Department and the
9 Attorney General shall share with each other the information
10 received under this title and may share the information with
11 other federal, State, or local agencies for purposes of
12 enforcement of this title or the laws of the federal government
13 or of other states.
14     (e) This Section shall not be construed to impose liability
15 upon any delivery service, or officers or employees thereof,
16 when acting within the scope of business of the delivery
17 service.
18     (f) The Department may establish procedures requiring
19 electronic transmission of the information required by this
20 Section directly to the Department on forms prescribed and
21 furnished by the Department.
22 (Source: P.A. 95-1053, eff. 1-1-10.)
 
23     (720 ILCS 678/10)
24     Sec. 10. Violation.
25     (a) A person who violates subsection (a), (b), or (c) of

 

 

SB0451 Enrolled - 103 - LRB096 06559 RCE 16643 b

1 Section 5 or Section 6, 7, 8, or 9 is guilty of a Class A
2 misdemeanor. A second or subsequent violation of subsection
3 (a), (b), or (c) of Section 5 or Section 6, 7, 8, or 9 is a
4 Class 4 felony.
5     (b) The Department of Revenue shall impose a civil penalty
6 not to exceed $5,000 on any person who violates subsection (a),
7 (b), or (c) of Section 5 or Section 6, 7, 8, or 9. The
8 Department of Revenue shall impose a civil penalty not to
9 exceed $5,000 on any person engaged in the business of selling
10 cigarettes who ships or causes to be shipped any such
11 cigarettes to any person in this State in violation of
12 subsection (d) of Section 5. Civil penalties imposed and
13 collected by the Department shall be deposited into the Tax
14 Compliance and Administration Fund.
15     (c) All cigarettes sold or attempted to be sold in a
16 delivery sale that does not meet the requirements of this Act
17 shall be forfeited to the State. All cigarettes forfeited to
18 this State under this Act shall be destroyed or maintained and
19 used in an undercover capacity. The Department may, prior to
20 any destruction of cigarettes, permit the true holder of the
21 trademark rights in the cigarette brand to inspect such
22 contraband cigarettes, in order to assist the Department in any
23 investigation regarding such cigarettes.
24     (d) Any person aggrieved by any decision of the Department
25 of Revenue may, within 60 days after notice of that decision,
26 protest in writing and request a hearing. The Department of

 

 

SB0451 Enrolled - 104 - LRB096 06559 RCE 16643 b

1 Revenue shall give notice to the person of the time and place
2 for the hearing and shall hold a hearing before it issues a
3 final administrative decision. Absent a written protest within
4 60 days, the Department's decision shall become final without
5 any further determination made or notice given.
6     (e) The penalties provided for in this Section are in
7 addition to any other penalties provided for by law.
8 (Source: P.A. 95-1053, eff. 1-1-10.)
 
9     (720 ILCS 678/33 new)
10     Sec. 33. Rulemaking. The Department may adopt rules to
11 implement and administer this Act.
 
12     Section 90. "An Act concerning revenue", approved April 10,
13 2009, Public Act 95-1053, is amended by changing Section 10 as
14 follows:
 
15     (P.A. 95-1053, Sec. 10)
16     Sec. 10. The Cigarette Tax Act is amended by repealing
17 Section Sections 9c and 28.
18 (Source: P.A. 95-1053, eff. 1-1-10.)
 
19     Section 99. Effective date. This Act takes effect January
20 1, 2010, except that Sections 90 and 99 take effect upon
21 becoming law.