SB2545 95TH GENERAL ASSEMBLY

LRB095 18241 BDD 46178 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB2545

Introduced 2/15/2008, by Sen. John J. Cullerton

SYNOPSIS AS INTRODUCED:

30 ILCS 105/5.708 new
30 ILCS 105/6z-73 new
35 ILCS 130/2	from Ch. 120, par. 453.2
35 ILCS 135/2	from Ch. 120, par. 453.32
55 ILCS 5/5-1008.7 new

Amends the Cigarette Tax Act and the Cigarette Use Tax Act. Increases the taxes under the Acts by an additional 45 mills per cigarette. Requires that the proceeds of the additional taxes be paid into the Tax Compliance and Enforcement Fund, the Healthcare Provider Relief Fund, and the Pension Stabilization Fund. Amends the State Finance Act to create the Healthcare Provider Relief Fund for use by Department of Healthcare and Family Services only for the purpose of making reimbursements to providers of goods or services under certain programs. Amends the Counties Code. Authorizes counties to impose an occupation tax on cigarettes at a rate of 50 mills per cigarette. Sets forth procedures for the collection and administration of the tax. Effective immediately.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Finance Act is amended by adding Sections 5.708 and 6z-73 as follows:

(30 ILCS 105/5.708 new)

Sec. 5.708. The Healthcare Provider Relief Fund.

(30 ILCS 105/6z-73 new)

Sec. 6z-73. The Healthcare Provider Relief Fund. The Healthcare Provider Relief Fund is created as a special fund in the State treasury. Moneys in the Fund may be used, subject to appropriation, by Department of Healthcare and Family Services only for the purpose of making reimbursements to providers of goods or services under the medical assistance program under Article V of the Illinois Public Aid Code, the Children's Health Insurance Program Act, the Covering All Kids Health Insurance Act, and the pharmaceutical assistance program under the Senior Citizens and Disabled Persons Property Tax Relief and Pharmaceutical Assistance Act. The Department shall make all such reimbursements from the Fund in the order that claims for those reimbursements were received by the Department.

Any interest earnings that are attributable to moneys in the Fund must be deposited into the Fund.

Section 10. The Cigarette Tax Act is amended by changing Section 2 as follows:

(35 ILCS 130/2) (from Ch. 120, par. 453.2)

Sec. 2. Tax imposed; rate; collection, payment, and distribution; discount.

(a) A tax is imposed upon any person engaged in business as a retailer of cigarettes in this State at the rate of 5 1/2 mills per cigarette sold, or otherwise disposed of in the course of such business in this State. In addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes in this State at a rate of 1/2 mill per cigarette sold or otherwise disposed of in the course of such business in this State on and after January 1, 1947, and shall be paid into the Metropolitan Fair and Exposition Authority Reconstruction Fund or as otherwise provided in Section 29. On and after December 1, 1985, in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes in this State at a rate of 4 mills per cigarette sold or otherwise disposed of in the course of such business in this State. Of the additional tax imposed by this amendatory Act of 1985, $9,000,000 of the moneys received by the Department of Revenue pursuant to this Act shall be paid each month into the Common School Fund. On and after the effective date of this amendatory Act of 1989, in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes at the rate of 5 mills per cigarette sold or otherwise disposed of in the course of such business in this State. On and after the effective date of this amendatory Act of 1993, in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes at the rate of 7 mills per cigarette sold or otherwise disposed of in the course of such business in this State. On and after December 15, 1997, in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes at the rate of 7 mills per cigarette sold or otherwise disposed of in the course of such business of this State. All of the moneys received by the Department of Revenue pursuant to this Act and the Cigarette Use Tax Act from the additional taxes imposed by this amendatory Act of 1997, shall be paid each month into the Common School Fund. On and after July 1, 2002, in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes at the rate of 20.0 mills per cigarette sold or otherwise disposed of in the course of such business in this State. Beginning on September 1, 2008 in addition to any other tax imposed by this Act, a tax is imposed upon any person engaged in business as a retailer of cigarettes at the rate of 45 mills per cigarette sold or otherwise disposed of in the course of such business in this State. Of the moneys received by the Department of Revenue under this Act and the Cigarette Use Tax Act from the additional taxes imposed by this amendatory Act of the 95th General Assembly: (i) 0.57% must be paid each month into the Tax Compliance and Enforcement Fund for the purpose of the enforcement of this Act and of the Cigarette Use Tax Act; (ii) 28.57% must be paid each month into the Healthcare Provider Relief Fund; and (iii) 70.86% must be paid each month into the Pension Stabilization Fund. The payment of such taxes shall be evidenced by a stamp affixed to each original package of cigarettes, or an authorized substitute for such stamp imprinted on each original package of such cigarettes underneath the sealed transparent outside wrapper of such original package, as hereinafter provided. However, such taxes are not imposed upon any activity in such business in interstate commerce or otherwise, which activity may not under the Constitution and statutes of the United States be made the subject of taxation by this State.

Beginning on the effective date of this amendatory Act of the 92nd General Assembly and through June 30, 2006, all of the moneys received by the Department of Revenue pursuant to this Act and the Cigarette Use Tax Act, other than the moneys that are dedicated to the Common School Fund, shall be distributed each month as follows: first, there shall be paid into the General Revenue Fund an amount which, when added to the amount paid into the Common School Fund for that month, equals $33,300,000, except that in the month of August of 2004, this amount shall equal $83,300,000; then, from the moneys remaining, if any amounts required to be paid into the General Revenue Fund in previous months remain unpaid, those amounts shall be paid into the General Revenue Fund; then, beginning on April 1, 2003, from the moneys remaining, $5,000,000 per month shall be paid into the School Infrastructure Fund; then, if any amounts required to be paid into the School Infrastructure Fund in previous months remain unpaid, those amounts shall be paid into the School Infrastructure Fund; then the moneys remaining, if any, shall be paid into the Long-Term Care Provider Fund. To the extent that more than $25,000,000 has been paid into the General Revenue Fund and Common School Fund per month for the period of July 1, 1993 through the effective date of this amendatory Act of 1994 from combined receipts of the Cigarette Tax Act and the Cigarette Use Tax Act, notwithstanding the distribution provided in this Section, the Department of Revenue is hereby directed to adjust the distribution provided in this Section to increase the next monthly payments to the Long Term Care Provider Fund by the amount paid to the General Revenue Fund and Common School Fund in excess of $25,000,000 per month and to decrease the next monthly payments to the General Revenue Fund and Common School Fund by that same excess amount.

Beginning on July 1, 2006, all of the moneys received by the Department of Revenue pursuant to this Act and the Cigarette Use Tax Act, other than the moneys that are dedicated to the Common School Fund and, beginning on the effective date of this amendatory Act of the 95th General Assembly, other than the moneys from the additional taxes imposed by this amendatory Act of the 95th General Assembly that must be paid each month into the Tax Compliance and Enforcement Fund, the Healthcare Provider Relief Fund, and the Pension Stabilization Fund, shall be distributed each month as follows: first, there shall be paid into the General Revenue Fund an amount that, when added to the amount paid into the Common School Fund for that month, equals $29,200,000; then, from the moneys remaining, if any amounts required to be paid into the General Revenue Fund in previous months remain unpaid, those amounts shall be paid into the General Revenue Fund; then from the moneys remaining, $5,000,000 per month shall be paid into the School Infrastructure Fund; then, if any amounts required to be paid into the School Infrastructure Fund in previous months remain unpaid, those amounts shall be paid into the School Infrastructure Fund; then the moneys remaining, if any, shall be paid into the Long-Term Care Provider Fund.

When any tax imposed herein terminates or has terminated, distributors who have bought stamps while such tax was in effect and who therefore paid such tax, but who can show, to the Department's satisfaction, that they sold the cigarettes to which they affixed such stamps after such tax had terminated and did not recover the tax or its equivalent from purchasers, shall be allowed by the Department to take credit for such absorbed tax against subsequent tax stamp purchases from the Department by such distributor.

The impact of the tax levied by this Act is imposed upon the retailer and shall be prepaid or pre-collected by the distributor for the purpose of convenience and facility only, and the amount of the tax shall be added to the price of the cigarettes sold by such distributor. Collection of the tax shall be evidenced by a stamp or stamps affixed to each original package of cigarettes, as hereinafter provided.

Each distributor shall collect the tax from the retailer at or before the time of the sale, shall affix the stamps as hereinafter required, and shall remit the tax collected from retailers to the Department, as hereinafter provided. Any distributor who fails to properly collect and pay the tax imposed by this Act shall be liable for the tax. Any distributor having cigarettes to which stamps have been affixed in his possession for sale on the effective date of this amendatory Act of 1989 shall not be required to pay the additional tax imposed by this amendatory Act of 1989 on such stamped cigarettes. Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale at 12:01 a.m. on the effective date of this amendatory Act of 1993, is required to pay the additional tax imposed by this amendatory Act of 1993 on such stamped cigarettes. This payment, less the discount provided in subsection (b), shall be due when the distributor first makes a purchase of cigarette tax stamps after the effective date of this amendatory Act of 1993, or on the first due date of a return under this Act after the effective date of this amendatory Act of 1993, whichever occurs first. Any distributor having cigarettes to which stamps have been affixed in his possession for sale on December 15, 1997 shall not be required to pay the additional tax imposed by this amendatory Act of 1997 on such stamped cigarettes.

Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale on July 1, 2002 shall not be required to pay the additional tax imposed by this amendatory Act of the 92nd General Assembly on those stamped cigarettes. Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale on or after September 1, 2008 is required to pay the additional tax imposed by this amendatory Act of the 95th General Assembly on those stamped cigarettes. This payment, less the discount provided in subsection (b), is due when the distributor first makes a purchase of cigarette tax stamps on or after September 1, 2008 or on the first due date of a return under this Act occurring on or after September 1, 2008, whichever occurs first.

The amount of the Cigarette Tax imposed by this Act shall be separately stated, apart from the price of the goods, by both distributors and retailers, in all advertisements, bills and sales invoices.

(b) The distributor shall be required to collect the taxes provided under paragraph (a) hereof, and, to cover the costs of such collection, shall be allowed a discount during any year commencing July 1st and ending the following June 30th in accordance with the schedule set out hereinbelow, which discount shall be allowed at the time of purchase of the stamps when purchase is required by this Act, or at the time when the tax is remitted to the Department without the purchase of stamps from the Department when that method of paying the tax is required or authorized by this Act. Prior to December 1, 1985, a discount equal to 1 2/3% of the amount of the tax up to and including the first $700,000 paid hereunder by such distributor to the Department during any such year; 1 1/3% of the next $700,000 of tax or any part thereof, paid hereunder by such distributor to the Department during any such year; 1% of the next $700,000 of tax, or any part thereof, paid hereunder by such distributor to the Department during any such year, and 2/3 of 1% of the amount of any additional tax paid hereunder by such distributor to the Department during any such year shall apply. On and after December 1, 1985, a discount equal to 1.75% of the amount of the tax payable under this Act up to and including the first $3,000,000 paid hereunder by such distributor to the Department during any such year and 1.5% of the amount of any additional tax paid hereunder by such distributor to the Department during any such year shall apply.

Two or more distributors that use a common means of affixing revenue tax stamps or that are owned or controlled by the same interests shall be treated as a single distributor for the purpose of computing the discount.

(c) The taxes herein imposed are in addition to all other occupation or privilege taxes imposed by the State of Illinois, or by any political subdivision thereof, or by any municipal corporation.

(Source: P.A. 93-839, eff. 7-30-04; 94-91, eff. 7-1-05; 94-839, eff. 6-6-06.)

Section 15. The Cigarette Use Tax Act is amended by changing Section 2 as follows:

(35 ILCS 135/2) (from Ch. 120, par. 453.32)

Sec. 2. A tax is imposed upon the privilege of using cigarettes in this State, at the rate of 6 mills per cigarette so used. On and after December 1, 1985, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at a rate of 4 mills per cigarette so used. On and after the effective date of this amendatory Act of 1989, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at the rate of 5 mills per cigarette so used. On and after the effective date of this amendatory Act of 1993, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at a rate of 7 mills per cigarette so used. On and after December 15, 1997, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at a rate of 7 mills per cigarette so used. On and after July 1, 2002, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at a rate of 20.0 mills per cigarette so used. Beginning on September 1, 2008, in addition to any other tax imposed by this Act, a tax is imposed upon the privilege of using cigarettes in this State at a rate of 45 mills per cigarette so used. The taxes herein imposed shall be in addition to all other occupation or privilege taxes imposed by the State of Illinois or by any political subdivision thereof or by any municipal corporation.

When any tax imposed herein terminates or has terminated, distributors who have bought stamps while such tax was in effect and who therefore paid such tax, but who can show, to the Department's satisfaction, that they sold the cigarettes to which they affixed such stamps after such tax had terminated and did not recover the tax or its equivalent from purchasers, shall be allowed by the Department to take credit for such absorbed tax against subsequent tax stamp purchases from the Department by such distributors.

When the word "tax" is used in this Act, it shall include any tax or tax rate imposed by this Act and shall mean the singular of "tax" or the plural "taxes" as the context may require.

Any distributor having cigarettes to which stamps have been affixed in his possession for sale on the effective date of this amendatory Act of 1989 shall not be required to pay the additional tax imposed by this amendatory Act of 1989 on such stamped cigarettes. Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale at 12:01 a.m. on the effective date of this amendatory Act of 1993, is required to pay the additional tax imposed by this amendatory Act of 1993 on such stamped cigarettes. This payment shall be due when the distributor first makes a purchase of cigarette tax stamps after the effective date of this amendatory Act of 1993, or on the first due date of a return under this Act after the effective date of this amendatory Act of 1993, whichever occurs first. Once a distributor tenders payment of the additional tax to the Department, the distributor may purchase stamps from the Department. Any distributor having cigarettes to which stamps have been affixed in his possession for sale on December 15, 1997 shall not be required to pay the additional tax imposed by this amendatory Act of 1997 on such stamped cigarettes.

Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale on July 1, 2002 shall not be required to pay the additional tax imposed by this amendatory Act of the 92nd General Assembly on those stamped cigarettes. Any distributor having cigarettes to which stamps have been affixed in his or her possession for sale on or after September 1, 2008 is required to pay the additional tax imposed by this amendatory Act of the 95th General Assembly on those stamped cigarettes. This payment is due when the distributor first makes a purchase of cigarette tax stamps on or after September 1, 2008 or on the first due date of a return under this Act occurring on or after September 1, 2008, whichever occurs first.

(Source: P.A. 92-536, eff. 6-6-02.)

Section 20. The Counties Code is amended by adding Section 5-1008.7 as follows:

(55 ILCS 5/5-1008.7 new)

Sec. 5-1008.7. County cigarette tax.

(a) The definitions as used in the Cigarette Tax Act (35 ILCS 130/) are hereby expressly adopted as if fully set forth in this Section and apply to all provisions of this Section.

(b) A county board may, by ordinance or resolution, impose a county cigarette tax upon any person engaged in business as a retailer of cigarettes in the county. If imposed, the tax must be at the rate of 50 mills per cigarette sold or otherwise disposed of in the course of such business in this State. The tax shall be administered by the county imposing that tax. The payment of the taxes must be evidenced by a stamp affixed to each original package of cigarettes, or an authorized substitute for such a stamp, imprinted on each original package of the cigarettes underneath the sealed transparent outside wrapper or on the exterior of the outside wrapper of the original package.

The tax under this Section, however, is not imposed upon any activity in any business in interstate commerce or otherwise that may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.

The impact of the tax levied by this Act is imposed upon the retailer and must be prepaid or precollected by the distributor for the purpose of convenience and facility only, and the amount of the tax must be added to the price of the cigarettes sold by the distributor. The collection of the tax must be evidenced by a stamp or stamps affixed to each original package of cigarettes.

Each distributor must collect the tax from the retailer at or before the time of the sale, must affix the stamps, and must remit, to the county, the tax collected from the retailer. Any distributor who fails to properly collect and pay the tax imposed by this Section is liable for the tax.

The amount of the tax imposed under this Section must be separately stated, apart from the price of the goods, by both distributors and retailers, in all advertisements, bills, and sales invoices.

(c) The taxes imposed under this Section are in addition to all other occupation or privilege taxes imposed by the State of Illinois, or by any political subdivision thereof, or by any municipal corporation.

(d) Any proceeds collected from the tax imposed under this Section may be used by the county only for the purpose of public health and safety.

(e) An ordinance or resolution imposing or discontinuing the tax under this Section must be adopted by the county board and a certified copy of the ordinance or resolution be filed with the county clerk on or before the first day of the month following the adoption of the ordinance or resolution, whereupon the county shall proceed to administer and enforce this Section no sooner than 60 days after the adoption and filing.

(f) All of the provisions of the Cigarette Tax Act (35 ILCS 130/) that are not inconsistent with this Section apply, as far as practical, to the subject matter of this Section to the same extent as if the provisions were included in this Section.

Section 99. Effective date. This Act takes effect upon becoming law.