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92_SB2017enr SB2017 Enrolled LRB9215600SMdv 1 AN ACT concerning tobacco. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short Title. This Act may be cited as the 5 Tobacco Product Manufacturers' Escrow Enforcement Act. 6 Section 5. Definitions. As used in this Act: 7 "Cigarette" means that term as defined in Section 10 of 8 the Tobacco Product Manufacturers' Escrow Act, which includes 9 roll-your-own tobacco. 10 "Distributor" has the same meaning as that term is 11 defined in Section 1 of the Cigarette Tax Act, Section 1 of 12 the Cigarette Use Tax Act, or Section 10-5 of the Tobacco 13 Products Tax Act of 1995, as appropriate. 14 "Participating manufacturer" has the same meaning as that 15 term is defined in subdivision (a)(1) of Section 15 of the 16 Tobacco Product Manufacturers' Escrow Act. 17 "Qualified escrow fund" has the same meaning as that term 18 is defined in subdivision (a)(2)(A) of Section 15 of the 19 Tobacco Product Manufacturers' Escrow Act. 20 "Stamps or imprints" means (i) revenue tax stamps or 21 imprints as provided for in Section 3 of the Cigarette Tax 22 Act or (ii) stamps or imprints evidencing the payment of use 23 tax as provided for in Section 3 of the Cigarette Use Tax 24 Act, as appropriate. 25 "Tobacco product manufacturer" has the same meaning as 26 that term is defined in Section 10 of the Tobacco Product 27 Manufacturers' Escrow Act. 28 Section 15. Distributor's determination of tobacco 29 product manufacturer compliance. 30 (a) A distributor of cigarettes under the Cigarette Tax SB2017 Enrolled -2- LRB9215600SMdv 1 Act or the Cigarette Use Tax Act, as appropriate, may not 2 affix or cause to be affixed stamps or imprints to individual 3 packages of cigarettes delivered or caused to be delivered by 4 the distributor in this State if the tobacco product 5 manufacturer of those cigarettes has: 6 (1) failed to become a participating manufacturer, 7 as defined in subdivision (a)(1) of Section 15 of the 8 Tobacco Product Manufacturers' Escrow Act; or 9 (2) failed to create a qualified escrow fund for 10 any cigarettes manufactured by the tobacco product 11 manufacturer and sold in this State or otherwise failed 12 to bring itself into compliance with subdivision (a)(2) 13 of Section 15 of the Tobacco Product Manufacturers' 14 Escrow Act. 15 (b) The Department of Revenue may revoke, suspend, or 16 cancel the license of a distributor of roll-your-own tobacco 17 under the Tobacco Products Tax Act of 1995 that is delivered 18 or caused to be delivered by the distributor in this State if 19 the tobacco product manufacturer of the roll-your-own tobacco 20 has: 21 (1) failed to become a participating manufacturer, 22 as defined in subdivision (a)(1) of Section 15 of the 23 Tobacco Product Manufacturers' Escrow Act; or 24 (2) failed to create a qualified escrow fund for 25 any roll-your-own tobacco manufactured by the tobacco 26 product manufacturer and sold in this State or otherwise 27 failed to bring itself into compliance with subdivision 28 (a)(2) of Section 15 of the Tobacco Product 29 Manufacturers' Escrow Act. 30 Section 20. Penalties. A distributor who violates this 31 Act is subject to the same penalties as provided in Section 6 32 of the Cigarette Tax Act, Section 6 of the Cigarette Use Tax 33 Act, or Section 10-25 of the Tobacco Products Tax Act of SB2017 Enrolled -3- LRB9215600SMdv 1 1995, as appropriate. 2 Section 25. Rules. The Illinois Attorney General, in 3 consultation with the Illinois Department of Revenue, shall 4 adopt rules as necessary to effectuate compliance with this 5 Act. 6 Section 905. The Cigarette Tax Act is amended by 7 changing Sections 3 and 6 as follows: 8 (35 ILCS 130/3) (from Ch. 120, par. 453.3) 9 Sec. 3. Affixing tax stamp; remitting tax to the 10 Department. Payment of the taxes imposed by Section 2 of 11 this Act shall (except as hereinafter provided) be evidenced 12 by revenue tax stamps affixed to each original package of 13 cigarettes. Each distributor of cigarettes, before delivering 14 or causing to be delivered any original package of cigarettes 15 in this State to a purchaser, shall firmly affix a proper 16 stamp or stamps to each such package, or (in case of 17 manufacturers of cigarettes in original packages which are 18 contained inside a sealed transparent wrapper) shall imprint 19 the required language on the original package of cigarettes 20 beneath such outside wrapper, as hereinafter provided. 21 No stamp or imprint may be affixed to, or made upon, any 22 package of cigarettes unless that package complies with all 23 requirements of the federal Cigarette Labeling and 24 Advertising Act, 15 U.S.C. 1331 and following, for the 25 placement of labels, warnings, or any other information upon 26 a package of cigarettes that is sold within the United 27 States. Under the authority of Section 6, the Department 28 shall revoke the license of any distributor that is 29 determined to have violated this paragraph. A person may not 30 affix a stamp on a package of cigarettes, cigarette papers, 31 wrappers, or tubes if that individual package has been marked SB2017 Enrolled -4- LRB9215600SMdv 1 for export outside the United States with a label or notice 2 in compliance with Section 290.185 of Title 27 of the Code of 3 Federal Regulations. It is not a defense to a proceeding for 4 violation of this paragraph that the label or notice has been 5 removed, mutilated, obliterated, or altered in any manner. 6 The Department, or any person authorized by the 7 Department, shall sell such stamps only to persons holding 8 valid licenses as distributors under this Act. The Department 9 may refuse to sell stamps to any person who does not comply 10 with the provisions of this Act. 11 Prior to December 1, 1985, the Department shall allow a 12 distributor 21 days in which to make final payment of the 13 amount to be paid for such stamps, by allowing the 14 distributor to make payment for the stamps at the time of 15 purchasing them with a draft which shall be in such form as 16 the Department prescribes, and which shall be payable within 17 21 days thereafter: Provided that such distributor has filed 18 with the Department, and has received the Department's 19 approval of, a bond, which is in addition to the bond 20 required under Section 4 of this Act, payable to the 21 Department in an amount equal to 80% of such distributor's 22 average monthly tax liability to the Department under this 23 Act during the preceding calendar year or $500,000, whichever 24 is less. The Bond shall be joint and several and shall be in 25 the form of a surety company bond in such form as the 26 Department prescribes, or it may be in the form of a bank 27 certificate of deposit or bank letter of credit. The bond 28 shall be conditioned upon the distributor's payment of amount 29 of any 21-day draft which the Department accepts from that 30 distributor for the delivery of stamps to that distributor 31 under this Act. The distributor's failure to pay any such 32 draft, when due, shall also make such distributor 33 automatically liable to the Department for a penalty equal to 34 25% of the amount of such draft. SB2017 Enrolled -5- LRB9215600SMdv 1 On and after December 1, 1985, the Department shall allow 2 a distributor 30 days in which to make final payment of the 3 amount to be paid for such stamps, by allowing the 4 distributor to make payment for the stamps at the time of 5 purchasing them with a draft which shall be in such form as 6 the Department prescribes, and which shall be payable within 7 30 days thereafter, and beginning on January 1, 2003 and 8 thereafter, the draft shall be payable by means of electronic 9 funds transfer: Provided that such distributor has filed 10 with the Department, and has received the Department's 11 approval of, a bond, which is in addition to the bond 12 required under Section 4 of this Act, payable to the 13 Department in an amount equal to 150% of such distributor's 14 average monthly tax liability to the Department under this 15 Act during the preceding calendar year or $750,000, whichever 16 is less, except that as to bonds filed on or after January 1, 17 1987, such additional bond shall be in an amount equal to 18 100% of such distributor's average monthly tax liability 19 under this Act during the preceding calendar year or 20 $750,000, whichever is less. The bond shall be joint and 21 several and shall be in the form of a surety company bond in 22 such form as the Department prescribes, or it may be in the 23 form of a bank certificate of deposit or bank letter of 24 credit. The bond shall be conditioned upon the distributor's 25 payment of the amount of any 30-day draft which the 26 Department accepts from that distributor for the delivery of 27 stamps to that distributor under this Act. The distributor's 28 failure to pay any such draft, when due, shall also make such 29 distributor automatically liable to the Department for a 30 penalty equal to 25% of the amount of such draft. 31 Every prior continuous compliance taxpayer shall be 32 exempt from all requirements under this Section concerning 33 the furnishing of such bond, as defined in this Section, as a 34 condition precedent to his being authorized to engage in the SB2017 Enrolled -6- LRB9215600SMdv 1 business licensed under this Act. This exemption shall 2 continue for each such taxpayer until such time as he may be 3 determined by the Department to be delinquent in the filing 4 of any returns, or is determined by the Department (either 5 through the Department's issuance of a final assessment which 6 has become final under the Act, or by the taxpayer's filing 7 of a return which admits tax to be due that is not paid) to 8 be delinquent or deficient in the paying of any tax under 9 this Act, at which time that taxpayer shall become subject to 10 the bond requirements of this Section and, as a condition of 11 being allowed to continue to engage in the business licensed 12 under this Act, shall be required to furnish bond to the 13 Department in such form as provided in this Section. Such 14 taxpayer shall furnish such bond for a period of 2 years, 15 after which, if the taxpayer has not been delinquent in the 16 filing of any returns, or delinquent or deficient in the 17 paying of any tax under this Act, the Department may 18 reinstate such person as a prior continuance compliance 19 taxpayer. Any taxpayer who fails to pay an admitted or 20 established liability under this Act may also be required to 21 post bond or other acceptable security with the Department 22 guaranteeing the payment of such admitted or established 23 liability. 24 Any person aggrieved by any decision of the Department 25 under this Section may, within the time allowed by law, 26 protest and request a hearing, whereupon the Department shall 27 give notice and shall hold a hearing in conformity with the 28 provisions of this Act and then issue its final 29 administrative decision in the matter to such person. In the 30 absence of such a protest filed within the time allowed by 31 law, the Department's decision shall become final without any 32 further determination being made or notice given. 33 The Department shall discharge any surety and shall 34 release and return any bond or security deposited, assigned, SB2017 Enrolled -7- LRB9215600SMdv 1 pledged, or otherwise provided to it by a taxpayer under this 2 Section 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 6 which he is required to remit tax to the Department, has 7 filed a final tax return, and has paid to the Department an 8 amount 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 11 outstanding tax liability as expeditiously as possible after 12 his final tax return has been filed. If the Department 13 cannot make such final determination within 45 days after 14 receiving the final tax return, within such period it shall 15 so notify the taxpayer, stating its reasons therefor. 16 The Department may authorize distributors to affix 17 revenue tax stamps by imprinting tax meter stamps upon 18 original packages of cigarettes. The Department shall adopt 19 rules and regulations relating to the imprinting of such tax 20 meter stamps as will result in payment of the proper taxes as 21 herein imposed. No distributor may affix revenue tax stamps 22 to original packages of cigarettes by imprinting tax meter 23 stamps thereon unless such distributor has first obtained 24 permission from the Department to employ this method of 25 affixation. The Department shall regulate the use of tax 26 meters and may, to assure the proper collection of the taxes 27 imposed by this Act, revoke or suspend the privilege, 28 theretofore granted by the Department to any distributor, to 29 imprint tax meter stamps upon original packages of 30 cigarettes. 31 Illinois cigarette manufacturers who place their 32 cigarettes in original packages which are contained inside a 33 sealed transparent wrapper, and similar out-of-State 34 cigarette manufacturers who elect to qualify and are accepted SB2017 Enrolled -8- LRB9215600SMdv 1 by the Department as distributors under Section 4b of this 2 Act, shall pay the taxes imposed by this Act by remitting the 3 amount thereof to the Department by the 5th day of each month 4 covering cigarettes shipped or otherwise delivered in 5 Illinois to purchasers during the preceding calendar month. 6 Such manufacturers of cigarettes in original packages which 7 are 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 remit the taxes due with respect to such 11 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 designate. Such imprinted language shall 16 acknowledge the manufacturer's payment of or liability for 17 the tax imposed by this Act with respect to the distribution 18 of such cigarettes. 19 A distributor shall not affix, or cause to be affixed, 20 any stamp or imprint to a package of cigarettes, as provided 21 for in this Section, if the tobacco product manufacturer, as 22 defined in Section 10 of the Tobacco Product Manufacturers' 23 Escrow Act, that made or sold the cigarettes has failed to 24 become a participating manufacturer, as defined in 25 subdivision (a)(1) of Section 15 of the Tobacco Product 26 Manufacturers' Escrow Act, or has failed to create a 27 qualified escrow fund for any cigarettes manufactured by the 28 tobacco product manufacturer and sold in this State or 29 otherwise failed to bring itself into compliance with 30 subdivision (a)(2) of Section 15 of the Tobacco Product 31 Manufacturers' Escrow Act. 32 (Source: P.A. 91-246, eff. 7-22-99; 92-322, eff. 1-1-02.) 33 (35 ILCS 130/6) (from Ch. 120, par. 453.6) SB2017 Enrolled -9- LRB9215600SMdv 1 Sec. 6. Revocation, cancellation, or suspension of 2 license. The Department may, after notice and hearing as 3 provided for by this Act, revoke, cancel or suspend the 4 license of any distributor for the violation of any provision 5 of this Act, or for noncompliance with any provision herein 6 contained, or for any noncompliance with any lawful rule or 7 regulation promulgated by the Department under Section 8 of 8 this Act, or because the licensee is determined to be 9 ineligible for a distributor's license for any one or more of 10 the reasons provided for in Section 4 of this Act. However, 11 no such license shall be revoked, cancelled or suspended, 12 except after a hearing by the Department with notice to the 13 distributor, as aforesaid, and affording such distributor a 14 reasonable opportunity to appear and defend, and any 15 distributor aggrieved by any decision of the Department with 16 respect thereto may have the determination of the Department 17 judicially reviewed, as herein provided. 18 The Department may revoke, cancel, or suspend the license 19 of any distributor for a violation of the Tobacco Product 20 Manufacturers' Escrow Enforcement Act as provided in Section 21 20 of that Act. 22 Any distributor aggrieved by any decision of the 23 Department under this Section may, within 20 days after 24 notice of the decision, protest and request a hearing. Upon 25 receiving a request for a hearing, the Department shall give 26 notice in writing to the distributor requesting the hearing 27 that contains a statement of the charges preferred against 28 the distributor and that states the time and place fixed for 29 the hearing. The Department shall hold the hearing in 30 conformity with the provisions of this Act and then issue its 31 final administrative decision in the matter to the 32 distributor. In the absence of a protest and request for a 33 hearing within 20 days, the Department's decision shall 34 become final without any further determination being made or SB2017 Enrolled -10- LRB9215600SMdv 1 notice given. 2 No license so revoked, as aforesaid, shall be reissued to 3 any such distributor within a period of 6 months after the 4 date of the final determination of such revocation. No such 5 license shall be reissued at all so long as the person who 6 would receive the license is ineligible to receive a 7 distributor's license under this Act for any one or more of 8 the reasons provided for in Section 4 of this Act. 9 The Department upon complaint filed in the circuit court 10 may by injunction restrain any person who fails, or refuses, 11 to comply with any of the provisions of this Act from acting 12 as a distributor of cigarettes in this State. 13 (Source: P.A. 91-901, eff. 1-1-01.) 14 Section 910. The Cigarette Use Tax Act is amended by 15 changing Sections 3 and 6 as follows: 16 (35 ILCS 135/3) (from Ch. 120, par. 453.33) 17 Sec. 3. Stamp payment. The tax hereby imposed shall be 18 collected by a distributor maintaining a place of business in 19 this State or a distributor authorized by the Department 20 pursuant to Section 7 hereof to collect the tax, and the 21 amount of the tax shall be added to the price of the 22 cigarettes sold by such distributor. Collection of the tax 23 shall be evidenced by a stamp or stamps affixed to each 24 original package of cigarettes or by an authorized substitute 25 for such stamp imprinted on each original package of such 26 cigarettes underneath the sealed transparent outside wrapper 27 of such original package, except as hereinafter provided. 28 Each distributor who is required or authorized to collect the 29 tax herein imposed, before delivering or causing to be 30 delivered any original packages of cigarettes in this State 31 to any purchaser, shall firmly affix a proper stamp or stamps 32 to each such package, or (in the case of manufacturers of SB2017 Enrolled -11- LRB9215600SMdv 1 cigarettes in original packages which are contained inside a 2 sealed transparent wrapper) shall imprint the required 3 language on the original package of cigarettes beneath such 4 outside wrapper as hereinafter provided. Such stamp or stamps 5 need not be affixed to the original package of any cigarettes 6 with respect to which the distributor is required to affix a 7 like stamp or stamps by virtue of the Cigarette Tax Act, 8 however, and no tax imprint need be placed underneath the 9 sealed transparent wrapper of an original package of 10 cigarettes with respect to which the distributor is required 11 or authorized to employ a like tax imprint by virtue of the 12 Cigarette Tax Act. 13 No stamp or imprint may be affixed to, or made upon, any 14 package of cigarettes unless that package complies with all 15 requirements of the federal Cigarette Labeling and 16 Advertising Act, 15 U.S.C. 1331 and following, for the 17 placement of labels, warnings, or any other information upon 18 a package of cigarettes that is sold within the United 19 States. Under the authority of Section 6, the Department 20 shall revoke the license of any distributor that is 21 determined to have violated this paragraph. A person may not 22 affix a stamp on a package of cigarettes, cigarette papers, 23 wrappers, or tubes if that individual package has been marked 24 for export outside the United States with a label or notice 25 in compliance with Section 290.185 of Title 27 of the Code of 26 Federal Regulations. It is not a defense to a proceeding for 27 violation of this paragraph that the label or notice has been 28 removed, mutilated, obliterated, or altered in any manner. 29 Stamps, when required hereunder, shall be purchased from 30 the Department, or any person authorized by the Department, 31 by distributors. The Department may refuse to sell stamps to 32 any person who does not comply with the provisions of this 33 Act. 34 Prior to December 1, 1985, the Department shall allow a SB2017 Enrolled -12- LRB9215600SMdv 1 distributor 21 days in which to make final payment of the 2 amount to be paid for such stamps, by allowing the 3 distributor to make payment for the stamps at the time of 4 purchasing them with a draft which shall be in such form as 5 the Department prescribes, and which shall be payable within 6 21 days thereafter: Provided that such distributor has filed 7 with the Department, and has received the Department's 8 approval of, a bond, which is in addition to the bond 9 required under Section 4 of this Act, payable to the 10 Department in an amount equal to 80% of such distributor's 11 average monthly tax liability to the Department under this 12 Act during the preceding calendar year or $500,000, whichever 13 is less. The bond shall be joint and several and shall be in 14 the form of a surety company bond in such form as the 15 Department prescribes, or it may be in the form of a bank 16 certificate of deposit or bank letter of credit. The bond 17 shall be conditioned upon the distributor's payment of the 18 amount of any 21-day draft which the Department accepts from 19 that distributor for the delivery of stamps to that 20 distributor under this Act. The distributor's failure to pay 21 any such draft, when due, shall also make such distributor 22 automatically liable to the Department for a penalty equal to 23 25% of the amount of such draft. 24 On and after December 1, 1985, the Department shall allow 25 a distributor 30 days in which to make final payment of the 26 amount to be paid for such stamps, by allowing the 27 distributor to make payment for the stamps at the time of 28 purchasing them with a draft which shall be in such form as 29 the Department prescribes, and which shall be payable within 30 30 days thereafter, and beginning on January 1, 2003 and 31 thereafter, the draft shall be payable by means of electronic 32 funds transfer: Provided that such distributor has filed 33 with the Department, and has received the Department's 34 approval of, a bond, which is in addition to the bond SB2017 Enrolled -13- LRB9215600SMdv 1 required under Section 4 of this Act, payable to the 2 Department in an amount equal to 150% of such distributor's 3 average monthly tax liability to the Department under this 4 Act during the preceding calendar year or $750,000, whichever 5 is less, except that as to bonds filed on or after January 1, 6 1987, such additional bond shall be in an amount equal to 7 100% of such distributor's average monthly tax liability 8 under this Act during the preceding calendar year or 9 $750,000, whichever is less. The bond shall be joint and 10 several and shall be in the form of a surety company bond in 11 such form as the Department prescribes, or it may be in the 12 form of a bank certificate of deposit or bank letter of 13 credit. The bond shall be conditioned upon the distributor's 14 payment of the amount of any 30-day draft which the 15 Department accepts from that distributor for the delivery of 16 stamps to that distributor under this Act. The distributor's 17 failure to pay any such draft, when due, shall also make such 18 distributor automatically liable to the Department for a 19 penalty equal to 25% of the amount of such draft. 20 Every prior continuous compliance taxpayer shall be 21 exempt from all requirements under this Section concerning 22 the furnishing of such bond, as defined in this Section, as a 23 condition precedent to his being authorized to engage in the 24 business licensed under this Act. This exemption shall 25 continue for each such taxpayer until such time as he may be 26 determined by the Department to be delinquent in the filing 27 of any returns, or is determined by the Department (either 28 through the Department's issuance of a final assessment which 29 has become final under the Act, or by the taxpayer's filing 30 of a return which admits tax to be due that is not paid) to 31 be delinquent or deficient in the paying of any tax under 32 this Act, at which time that taxpayer shall become subject to 33 the bond requirements of this Section and, as a condition of 34 being allowed to continue to engage in the business licensed SB2017 Enrolled -14- LRB9215600SMdv 1 under this Act, shall be required to furnish bond to the 2 Department in such form as provided in this Section. Such 3 taxpayer shall furnish such bond for a period of 2 years, 4 after which, if the taxpayer has not been delinquent in the 5 filing of any returns, or delinquent or deficient in the 6 paying of any tax under this Act, the Department may 7 reinstate such person as a prior continuance compliance 8 taxpayer. Any taxpayer who fails to pay an admitted or 9 established liability under this Act may also be required to 10 post bond or other acceptable security with the Department 11 guaranteeing the payment of such admitted or established 12 liability. 13 Any person aggrieved by any decision of the Department 14 under this Section may, within the time allowed by law, 15 protest and request a hearing, whereupon the Department shall 16 give notice and shall hold a hearing in conformity with the 17 provisions of this Act and then issue its final 18 administrative decision in the matter to such person. In the 19 absence of such a protest filed within the time allowed by 20 law, the Department's decision shall become final without any 21 further determination being made or notice given. 22 The Department shall discharge any surety and shall 23 release and return any bond or security deposited, assigned, 24 pledged, or otherwise provided to it by a taxpayer under this 25 Section within 30 days after: 26 (1) such Taxpayer becomes a prior continuous 27 compliance taxpayer; or 28 (2) such taxpayer has ceased to collect receipts on 29 which he is required to remit tax to the Department, has 30 filed a final tax return, and has paid to the Department 31 an amount sufficient to discharge his remaining tax 32 liability as determined by the Department under this Act. 33 The Department shall make a final determination of the 34 taxpayer's outstanding tax liability as expeditiously as SB2017 Enrolled -15- LRB9215600SMdv 1 possible after his final tax return has been filed. If 2 the Department cannot make such final determination 3 within 45 days after receiving the final tax return, 4 within such period it shall so notify the taxpayer, 5 stating its reasons therefor. 6 At the time of purchasing such stamps from the Department 7 when purchase is required by this Act, or at the time when 8 the tax which he has collected is remitted by a distributor 9 to the Department without the purchase of stamps from the 10 Department when that method of remitting the tax that has 11 been collected is required or authorized by this Act, the 12 distributor shall be allowed a discount during any year 13 commencing July 1 and ending the following June 30 in 14 accordance with the schedule set out hereinbelow, from the 15 amount to be paid by him to the Department for such stamps, 16 or to be paid by him to the Department on the basis of 17 monthly remittances (as the case may be), to cover the cost, 18 to such distributor, of collecting the tax herein imposed by 19 affixing such stamps to the original packages of cigarettes 20 sold by such distributor or by placing tax imprints 21 underneath the sealed transparent wrapper of original 22 packages of cigarettes sold by such distributor (as the case 23 may be): (1) Prior to December 1, 1985, a discount equal to 24 1-2/3% of the amount of the tax up to and including the first 25 $700,000 paid hereunder by such distributor to the Department 26 during any such year; 1-1/3% of the next $700,000 of tax or 27 any part thereof, paid hereunder by such distributor to the 28 Department during any such year; 1% of the next $700,000 of 29 tax, or any part thereof, paid hereunder by such distributor 30 to the Department during any such year; and 2/3 of 1% of the 31 amount of any additional tax paid hereunder by such 32 distributor to the Department during any such year or (2) On 33 and after December 1, 1985, a discount equal to 1.75% of the 34 amount of the tax payable under this Act up to and including SB2017 Enrolled -16- LRB9215600SMdv 1 the first $3,000,000 paid hereunder by such distributor to 2 the Department during any such year and 1.5% of the amount of 3 any additional tax paid hereunder by such distributor to the 4 Department during any such year. 5 Two or more distributors that use a common means of 6 affixing revenue tax stamps or that are owned or controlled 7 by the same interests shall be treated as a single 8 distributor for the purpose of computing the discount. 9 Cigarette manufacturers who are distributors under this 10 Act, and who place their cigarettes in original packages 11 which are contained inside a sealed transparent wrapper, 12 shall be required to remit the tax which they are required to 13 collect under this Act to the Department by remitting the 14 amount thereof to the Department by the 5th day of each 15 month, covering cigarettes shipped or otherwise delivered to 16 points in Illinois to purchasers during the preceding 17 calendar month, but a distributor need not remit to the 18 Department the tax so collected by him from purchasers under 19 this Act to the extent to which such distributor is required 20 to remit the tax imposed by the Cigarette Tax Act to the 21 Department with respect to the same cigarettes. All taxes 22 upon cigarettes under this Act are a direct tax upon the 23 retail consumer and shall conclusively be presumed to be 24 precollected for the purpose of convenience and facility 25 only. Distributors who are manufacturers of cigarettes in 26 original packages which are contained inside a sealed 27 transparent wrapper, before delivering such cigarettes or 28 causing such cigarettes to be delivered in this State to 29 purchasers, shall evidence their obligation to collect and 30 remit the tax due with respect to such cigarettes by 31 imprinting language to be prescribed by the Department on 32 each original package of such cigarettes underneath the 33 sealed transparent outside wrapper of such original package, 34 in such place thereon and in such manner as the Department SB2017 Enrolled -17- LRB9215600SMdv 1 may prescribe; provided (as stated hereinbefore) that this 2 requirement does not apply when such distributor is required 3 or authorized by the Cigarette Tax Act to place the tax 4 imprint provided for in the last paragraph of Section 3 of 5 that Act underneath the sealed transparent wrapper of such 6 original package of cigarettes. Such imprinted language shall 7 acknowledge the manufacturer's collection and payment of or 8 liability for the tax imposed by this Act with respect to 9 such cigarettes. 10 The Department shall adopt the design or designs of the 11 tax stamps and shall procure the printing of such stamps in 12 such amounts and denominations as it deems necessary to 13 provide for the affixation of the proper amount of tax stamps 14 to each original package of cigarettes. 15 Where tax stamps are required, the Department may 16 authorize distributors to affix revenue tax stamps by 17 imprinting tax meter stamps upon original packages of 18 cigarettes. The Department shall adopt rules and regulations 19 relating to the imprinting of such tax meter stamps as will 20 result in payment of the proper taxes as herein imposed. No 21 distributor may affix revenue tax stamps to original packages 22 of cigarettes by imprinting meter stamps thereon unless such 23 distributor has first obtained permission from the Department 24 to employ this method of affixation. The Department shall 25 regulate the use of tax meters and may, to assure the proper 26 collection of the taxes imposed by this Act, revoke or 27 suspend the privilege, theretofore granted by the Department 28 to any distributor, to imprint tax meter stamps upon original 29 packages of cigarettes. 30 The tax hereby imposed and not paid pursuant to this 31 Section shall be paid to the Department directly by any 32 person using such cigarettes within this State, pursuant to 33 Section 12 hereof. 34 A distributor shall not affix, or cause to be affixed, SB2017 Enrolled -18- LRB9215600SMdv 1 any stamp or imprint to a package of cigarettes, as provided 2 for in this Section, if the tobacco product manufacturer, as 3 defined in Section 10 of the Tobacco Product Manufacturers' 4 Escrow Act, that made or sold the cigarettes has failed to 5 become a participating manufacturer, as defined in 6 subdivision (a)(1) of Section 15 of the Tobacco Product 7 Manufacturers' Escrow Act, or has failed to create a 8 qualified escrow fund for any cigarettes manufactured by the 9 tobacco product manufacturer and sold in this State or 10 otherwise failed to bring itself into compliance with 11 subdivision (a)(2) of Section 15 of the Tobacco Product 12 Manufacturers' Escrow Act. 13 (Source: P.A. 91-246, eff. 7-22-99; 92-322, eff. 1-1-02.) 14 (35 ILCS 135/6) (from Ch. 120, par. 453.36) 15 Sec. 6. Revocation, cancellation, or suspension of 16 license. The Department may, after notice and hearing as 17 provided for by this Act, revoke, cancel or suspend the 18 license of any distributor for the violation of any provision 19 of this Act, or for non-compliance with any provision herein 20 contained, or for any non-compliance with any lawful rule or 21 regulation promulgated by the Department under Section 21 of 22 this Act, or because the licensee is determined to be 23 ineligible for a distributor's license for any one or more of 24 the reasons provided for in Section 4 of this Act. However, 25 no such license shall be revoked, canceled or suspended, 26 except after a hearing by the Department with notice to the 27 distributor, as aforesaid, and affording such distributor a 28 reasonable opportunity to appear and defend, and any 29 distributor aggrieved by any decision of the Department with 30 respect thereto may have the determination of the Department 31 judicially reviewed, as herein provided. 32 The Department may revoke, cancel, or suspend the license 33 of any distributor for a violation of the Tobacco Product SB2017 Enrolled -19- LRB9215600SMdv 1 Manufacturers' Escrow Enforcement Act as provided in Section 2 20 of that Act. 3 Any distributor aggrieved by any decision of the 4 Department under this Section may, within 20 days after 5 notice of the decision, protest and request a hearing. Upon 6 receiving a request for a hearing, the Department shall give 7 notice in writing to the distributor requesting the hearing 8 that contains a statement of the charges preferred against 9 the distributor and that states the time and place fixed for 10 the hearing. The Department shall hold the hearing in 11 conformity with the provisions of this Act and then issue its 12 final administrative decision in the matter to the 13 distributor. In the absence of a protest and request for a 14 hearing within 20 days, the Department's decision shall 15 become final without any further determination being made or 16 notice given. 17 No license so revoked, shall be reissued to any such 18 distributor within a period of 6 months after the date of the 19 final determination of such revocation. No such license 20 shall be reissued at all so long as the person who would 21 receive the license is ineligible to receive a distributor's 22 license under this Act for any one or more of the reasons 23 provided for in Section 4 of this Act. 24 The Department upon complaint filed in the circuit court 25 may by injunction restrain any person who fails, or refuses, 26 to comply with this Act from acting as a distributor of 27 cigarettes in this State. 28 (Source: P.A. 91-901, eff. 1-1-01.) 29 Section 915. The Tobacco Products Tax Act of 1995 is 30 amended by changing Sections 10-20 and 10-25 as follows: 31 (35 ILCS 143/10-20) 32 Sec. 10-20. Licenses. It shall be unlawful for any SB2017 Enrolled -20- LRB9215600SMdv 1 person to engage in business as a distributor of tobacco 2 products within the meaning of this Act without first having 3 obtained a license to do so from the Department. Application 4 for that license shall be made to the Department in a form 5 prescribed and furnished by the Department. Each applicant 6 for a license shall furnish to the Department on a form, 7 signed and verified by the applicant, the following 8 information: 9 (1) The name of the applicant. 10 (2) The address of the location at which the 11 applicant proposes to engage in business as a distributor 12 of tobacco products. 13 (3) Other information the Department may reasonably 14 require. 15 Except as otherwise provided in this Section, every 16 applicant who is required to procure a distributor's license 17 shall file with his or her application a joint and several 18 bond. The bond shall be executed to the Department of 19 Revenue, with good and sufficient surety or sureties residing 20 or licensed to do business within the State of Illinois, 21 conditioned upon the true and faithful compliance by the 22 licensee with all of the provisions of this Act. The 23 Department shall fix the amount of the bond for each 24 applicant, taking into consideration the amount of money 25 expected to become due from the applicant under this Act. 26 The amount of bond required by the Department shall be an 27 amount that, in its opinion, will protect the State of 28 Illinois against failure to pay the amount that may become 29 due from the applicant under this Act, but the amount of the 30 security required by the Department shall not exceed 3 times 31 the amount of the applicant's average monthly tax liability, 32 or $50,000, whichever amount is lower. The bond, a reissue, 33 or a substitute shall be kept in full force and effect during 34 the entire period covered by the license. A separate SB2017 Enrolled -21- LRB9215600SMdv 1 application for license shall be made, and bond filed, for 2 each place of business at which a person who is required to 3 procure a distributor's license proposes to engage in 4 business as a distributor under this Act. 5 The Department, upon receipt of an application and bond 6 in proper form, shall issue to the applicant a license, in a 7 form prescribed by the Department, which shall permit the 8 applicant to whom it is issued to engage in business as a 9 distributor at the place shown on his or her application. 10 The license shall be issued by the Department without charge 11 or cost to the applicant. No license issued under this Act 12 is transferable or assignable. The license shall be 13 conspicuously displayed in the place of business conducted by 14 the licensee under the license. 15 The bonding requirement in this Section does not apply to 16 an applicant for a distributor's license who is already 17 bonded under the Cigarette Tax Act or the Cigarette Use Tax 18 Act. Licenses issued by the Department under this Act shall 19 be valid for a period not to exceed one year after issuance 20 unless sooner revoked, canceled, or suspended as provided in 21 this Act. 22 No license shall be issued to any person who is in 23 default to the State of Illinois for moneys due under this 24 Act or any other tax Act administered by the Department. 25 The Department may, in its discretion, upon application, 26 authorize the payment of the tax imposed under Section 10-10 27 by any distributor or manufacturer not otherwise subject to 28 the tax imposed under this Act who, to the satisfaction of 29 the Department, furnishes adequate security to ensure payment 30 of the tax. The distributor or manufacturer shall be issued, 31 without charge, a license to remit the tax. When so 32 authorized, it shall be the duty of the distributor or 33 manufacturer to remit the tax imposed upon the wholesale 34 price of tobacco products sold or otherwise disposed of to SB2017 Enrolled -22- LRB9215600SMdv 1 retailers or consumers located in this State, in the same 2 manner and subject to the same requirements as any other 3 distributor or manufacturer licensed under this Act. 4 The Department may revoke, suspend, or cancel the license 5 of a distributor of roll-your-own tobacco (as that term is 6 used in Section 10 of the Tobacco Product Manufacturers' 7 Escrow Act) under this Act if the tobacco product 8 manufacturer, as defined in Section 10 of the Tobacco Product 9 Manufacturers' Escrow Act, that made or sold the 10 roll-your-own tobacco has failed to become a participating 11 manufacturer, as defined in subdivision (a)(1) of Section 15 12 of the Tobacco Product Manufacturers' Escrow Act, or has 13 failed to create a qualified escrow fund for any 14 roll-your-own tobacco manufactured by the tobacco product 15 manufacturer and sold in this State or otherwise failed to 16 bring itself into compliance with subdivision (a)(2) of 17 Section 15 of the Tobacco Product Manufacturers' Escrow Act. 18 Any person aggrieved by any decision of the Department 19 under this Section may, within 20 days after notice of that 20 decision, protest and request a hearing, whereupon the 21 Department must give notice to that person of the time and 22 place fixed for the hearing and must hold a hearing in 23 conformity with the provisions of this Act and then issue its 24 final administrative decision in the matter to that person. 25 In the absence of such a protest within 20 days, the 26 Department's decision becomes final without any further 27 determination being made or notice given. 28 (Source: P.A. 92-231, eff. 8-2-01.) 29 (35 ILCS 143/10-25) 30 Sec. 10-25. License actions. The Department may, after 31 notice and a hearing, revoke, cancel, or suspend the license 32 of any distributor who violates any of the provisions of this 33 Act. The notice shall specify the alleged violation or SB2017 Enrolled -23- LRB9215600SMdv 1 violations upon which the revocation, cancellation, or 2 suspension proceeding is based. 3 The Department may revoke, cancel, or suspend the license 4 of any distributor for a violation of the Tobacco Product 5 Manufacturers' Escrow Enforcement Act as provided in Section 6 20 of that Act. 7 The Department may, by application to any circuit court, 8 obtain an injunction restraining any person who engages in 9 business as a distributor of tobacco products without a 10 license (either because his or her license has been revoked, 11 canceled, or suspended or because of a failure to obtain a 12 license in the first instance) from engaging in that business 13 until that person, as if that person were a new applicant for 14 a license, complies with all of the conditions, restrictions, 15 and requirements of Section 10-20 of this Act and qualifies 16 for and obtains a license. Refusal or neglect to obey the 17 order of the court may result in punishment for contempt. 18 (Source: P.A. 89-21, eff. 6-6-95.) 19 Section 999. Effective date. This Act takes effect upon 20 becoming law.