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92_SB0853eng SB853 Engrossed LRB9204504REdv 1 AN ACT concerning taxes. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Tobacco Products Tax Act of 1995 is 5 amended by changing Sections 10-5, 10-10, 10-20, and 10-50 as 6 follows: 7 (35 ILCS 143/10-5) 8 Sec. 10-5. Definitions. For purposes of this Act: 9 "Business" means any trade, occupation, activity, or 10 enterprise engaged in, at any location whatsoever, for the 11 purpose of selling tobacco productsin this State. 12 "Cigarette" has the meaning ascribed to the term in 13 Section 1 of the Cigarette Tax Act. 14 "Correctional Industries program" means a program run by 15 a State penal institution in which residents of the penal 16 institution produce tobacco products for sale to persons 17 incarcerated in penal institutions or resident patients of a 18 State operated mental health facility. 19 "Department" means the Illinois Department of Revenue. 20 "Distributor" means any of the following: 21 (1) Any manufacturer or wholesaler in this State 22 engaged in the business of selling tobacco products who 23 sells, exchanges, or distributes tobacco products to 24 retailers or consumers in this State. 25 (2) Any manufacturer or wholesalerlocated outside26of Illinoisengaged in the business of selling tobacco 27 products from without this State who sells, exchanges, 28 distributes, ships, or transports tobacco products to 29 retailers or consumers located in this State, so long as 30 that manufacturer or wholesaler has or maintains within 31 this State, directly or by subsidiary, an office, sales SB853 Engrossed -2- LRB9204504REdv 1 house, or other place of business, or any agent or other 2 representative operating within this State under the 3 authority of the person or subsidiary, irrespective of 4 whether the place of business or agent or other 5 representative is located here permanently or 6 temporarily. 7 (3) Any retailer who receives tobacco products on 8 which the tax has not been or will not be paid by another 9 distributor. 10 "Distributor" does not include any person, wherever 11 resident or located, who makes, manufactures, or fabricates 12 tobacco products as part of a Correctional Industries program 13 for sale to residents incarcerated in penal institutions or 14 resident patients of a State operated mental health facility. 15 "Manufacturer" means any person, wherever resident or 16 located, who manufactures and sells tobacco products, except 17 a person who makes, manufactures, or fabricates tobacco 18 products as a part of a Correctional Industries program for 19 sale to persons incarcerated in penal institutions or 20 resident patients of a State operated mental health facility. 21 "Person" means any natural individual, firm, partnership, 22 association, joint stock company, joint venture, limited 23 liability company, or public or private corporation, however 24 formed, or a receiver, executor, administrator, trustee, 25 conservator, or other representative appointed by order of 26 any court. 27 "Place of business" means and includes any place where 28 tobacco products are sold or where tobacco products are 29 manufactured, stored, or kept for the purpose of sale or 30 consumption, including any vessel, vehicle, airplane, train, 31 or vending machine. 32 "Retailer" means any person in this State engaged in the 33 business of selling tobacco products to consumers in this 34 State, regardless of quantity or number of sales. SB853 Engrossed -3- LRB9204504REdv 1 "Sale" means any transfer, exchange, or barter in any 2 manner or by any means whatsoever for a consideration and 3 includes all sales made by persons. 4 "Tobacco products" means any cigars; cheroots; stogies; 5 periques; granulated, plug cut, crimp cut, ready rubbed, and 6 other smoking tobacco; snuff or snuff flour; cavendish; plug 7 and twist tobacco; fine-cut and other chewing tobaccos; 8 shorts; refuse scraps, clippings, cuttings, and sweeping of 9 tobacco; and other kinds and forms of tobacco, prepared in 10 such manner as to be suitable for chewing or smoking in a 11 pipe or otherwise, or both for chewing and smoking; but does 12 not include cigarettes or tobacco purchased for the 13 manufacture of cigarettes by cigarette distributors and 14 manufacturers defined in the Cigarette Tax Act and persons 15 who make, manufacture, or fabricate cigarettes as a part of a 16 Correctional Industries program for sale to residents 17 incarcerated in penal institutions or resident patients of a 18 State operated mental health facility. 19 "Wholesale price" means the established list price for 20 which a manufacturer sells tobacco products to a distributor, 21 before the allowance of any discount, trade allowance, 22 rebate, or other reduction. In the absence of such an 23 established list price, the manufacturer's invoice price at 24 which the manufacturer sells the tobacco product to 25 unaffiliated distributors, before any discounts, trade 26 allowances, rebates, or other reductions, shall be presumed 27 to be the wholesale price. 28 "Wholesaler" means any person, wherever resident or 29 located, engaged in the business of selling tobacco products 30 to others for the purpose of resale. 31 (Source: P.A. 89-21, eff. 6-6-95.) 32 (35 ILCS 143/10-10) 33 Sec. 10-10. Tax imposed. On the first day of the third SB853 Engrossed -4- LRB9204504REdv 1 month after the month in which this Act becomes law, a tax is 2 imposed on any person engaged in business as a distributor of 3 tobacco products, as defined in Section 10-5, at the rate of 4 18% of the wholesale price of tobacco products sold or 5 otherwise disposed of to retailers or consumers located in 6 this State. The tax is in addition to all other occupation or 7 privilege taxes imposed by the State of Illinois, by any 8 political subdivision thereof, or by any municipal 9 corporation. However, the tax is not imposed upon any 10 activity in that business in interstate commerce or 11 otherwise, to the extent to which that activity may not, 12 under the Constitution and Statutes of the United States, be 13 made the subject of taxation by this State. The tax is also 14 not imposed on sales made to the United States or any entity 15 thereof. 16 All moneys received by the Department under this Act 17 shall be paid into the Long-Term Care Provider Fund of the 18 State Treasury. 19 (Source: P.A. 89-21, eff. 6-6-95.) 20 (35 ILCS 143/10-20) 21 Sec. 10-20. Licenses. It shall be unlawful for any 22 person to engage in business as a distributor of tobacco 23 productsin this Statewithin the meaning of this Act without 24 first having obtained a license to do so from the Department. 25 Application for that license shall be made to the Department 26 in a form prescribed and furnished by the Department. Each 27 applicant for a license shall furnish to the Department on a 28 form, signed and verified by the applicant, the following 29 information: 30 (1) The name of the applicant. 31 (2) The address of the location at which the 32 applicant proposes to engage in business as a distributor 33 of tobacco productsin this State. SB853 Engrossed -5- LRB9204504REdv 1 (3) Other information the Department may reasonably 2 require. 3 Except as otherwise provided in this Section, every 4 applicant who is required to procure a distributor's license 5 shall file with his or her application a joint and several 6 bond. The bond shall be executed to the Department of 7 Revenue, with good and sufficient surety or sureties residing 8 or licensed to do business within the State of Illinois, 9 conditioned upon the true and faithful compliance by the 10 licensee with all of the provisions of this Act. The 11 Department shall fix the amount of the bond for each 12 applicant, taking into consideration the amount of money 13 expected to become due from the applicant under this Act. 14 The amount of bond required by the Department shall be an 15 amount that, in its opinion, will protect the State of 16 Illinois against failure to pay the amount that may become 17 due from the applicant under this Act, but the amount of the 18 security required by the Department shall not exceed 3 times 19 the amount of the applicant's average monthly tax liability, 20 or $50,000, whichever amount is lower. The bond, a reissue, 21 or a substitute shall be kept in full force and effect during 22 the entire period covered by the license. A separate 23 application for license shall be made, and bond filed, for 24 each place of business at which a person who is required to 25 procure a distributor's license proposes to engage in 26 business as a distributorin Illinoisunder this Act. 27 The Department, upon receipt of an application and bond 28 in proper form, shall issue to the applicant a license, in a 29 form prescribed by the Department, which shall permit the 30 applicant to whom it is issued to engage in business as a 31 distributor at the place shown on his or her application. 32 The license shall be issued by the Department without charge 33 or cost to the applicant. No license issued under this Act 34 is transferable or assignable. The license shall be SB853 Engrossed -6- LRB9204504REdv 1 conspicuously displayed in the place of business conducted by 2 the licenseein Illinoisunder the license. 3 The bonding requirement in this Section does not apply to 4 an applicant for a distributor's license who is already 5 bonded under the Cigarette Tax Act or the Cigarette Use Tax 6 Act. Licenses issued by the Department under this Act shall 7 be valid for a period not to exceed one year after issuance 8 unless sooner revoked, canceled, or suspended as provided in 9 this Act. 10 No license shall be issued to any person who is in 11 default to the State of Illinois for moneys due under this 12 Act or any other tax Act administered by the Department. 13 The Department may, in its discretion, upon application, 14 authorize the payment of the tax imposed under Section 10-10 15 by any distributor or manufacturer not otherwise subject to 16 the tax imposed under this Act who, to the satisfaction of 17 the Department, furnishes adequate security to ensure payment 18 of the tax. The distributor or manufacturer shall be issued, 19 without charge, a license to remit the tax. When so 20 authorized, it shall be the duty of the distributor or 21 manufacturer to remit the tax imposed upon the wholesale 22 price of tobacco products sold or otherwise disposed of to 23 retailers or consumers located in this State, in the same 24 manner and subject to the same requirements as any othera25 distributor or manufacturer licensed under this Actoperating26within this State. 27 Any person aggrieved by any decision of the Department 28 under this Section may, within 20 days after notice of that 29 decision, protest and request a hearing, whereupon the 30 Department must give notice to that person of the time and 31 place fixed for the hearing and must hold a hearing in 32 conformity with the provisions of this Act and then issue its 33 final administrative decision in the matter to that person. 34 In the absence of such a protest within 20 days, the SB853 Engrossed -7- LRB9204504REdv 1 Department's decision becomes final without any further 2 determination being made or notice given. 3 (Source: P.A. 89-21, eff. 6-6-95.) 4 (35 ILCS 143/10-50) 5 Sec. 10-50. Violations and penalties. When the amount 6 due is under $300, any distributor who fails to file a 7 return, wilfully fails or refuses to make any payment to the 8 Department of the tax imposed by this Act, or files a 9 fraudulent return, or any officer or agent of a corporation 10 engaged in the business of distributing tobacco products to 11 retailers and consumers located in this State who signs a 12 fraudulent return filed on behalf of the corporation, or any 13 accountant or other agent who knowingly enters false 14 information on the return of any taxpayer under this Act is 15 guilty of a Class 4 felony. 16 Any person who violates any provision of Section 10-20 of 17 this Act, fails to keep books and records as required under 18 this Act, or wilfully violates a rule or regulation of the 19 Department for the administration and enforcement of this Act 20 is guilty of a Class 4 felony. A person commits a separate 21 offense on each day that he or she engages in business in 22 violation of Section 10-20 of this Act. 23 When the amount due is under $300, any person who accepts 24 money that is due to the Department under this Act from a 25 taxpayer for the purpose of acting as the taxpayer's agent to 26 make the payment to the Department, but who fails to remit 27 the payment to the Department when due, is guilty of a Class 28 4 felony. 29 When the amount due is $300 or more, any distributor who 30 files, or causes to be filed, a fraudulent return, or any 31 officer or agent of a corporation engaged in the business of 32 distributing tobacco products to retailers and consumers 33 located in this State who files or causes to be filed or SB853 Engrossed -8- LRB9204504REdv 1 signs or causes to be signed a fraudulent return filed on 2 behalf of the corporation, or any accountant or other agent 3 who knowingly enters false information on the return of any 4 taxpayer under this Act is guilty of a Class 3 felony. 5 When the amount due is $300 or more, any person engaged 6 in the business of distributing tobacco products to retailers 7 and consumers located in this State who fails to file a 8 return, wilfully fails or refuses to make any payment to the 9 Department of the tax imposed by this Act, or accepts money 10 that is due to the Department under this Act from a taxpayer 11 for the purpose of acting as the taxpayer's agent to make 12 payment to the Department but fails to remit such payment to 13 the Department when due is guilty of a Class 3 felony. 14 Any person whose principal place of business is in this 15 State and who is charged with a violation under this Section 16 shall be tried in the county where his or her principal place 17 of business is located unless he or she asserts a right to be 18 tried in another venue. If the taxpayer does not have his or 19 her principal place of business in this State, however, the 20 hearing must be held in Sangamon County unless the taxpayer 21 asserts a right to be tried in another venue. 22 Any taxpayer or agent of a taxpayer who with the intent 23 to defraud purports to make a payment due to the Department 24 by issuing or delivering a check or other order upon a real 25 or fictitious depository for the payment of money, knowing 26 that it will not be paid by the depository, is guilty of a 27 deceptive practice in violation of Section 17-1 of the 28 Criminal Code of 1961. 29 A prosecution for a violation described in this Section 30 may be commenced within 3 years after the commission of the 31 act constituting the violation. 32 (Source: P.A. 89-21, eff. 6-6-95.) 33 Section 99. Effective date. This Act takes effect upon SB853 Engrossed -9- LRB9204504REdv 1 becoming law.