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92_SB2017eng SB2017 Engrossed 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" has the same meaning as that term is defined 8 in Section 10 of the Tobacco Product Manufacturers' Escrow 9 Act. 10 "Distributor" has the same meaning as that term is 11 defined in Section 1 of the Cigarette Tax Act. 12 "Participating manufacturer" has the same meaning as that 13 term is defined in subdivision (a)(1) of Section 15 of the 14 Tobacco Product Manufacturers' Escrow Act. 15 "Qualified escrow fund" has the same meaning as that term 16 is defined in subdivision (a)(2)(A) of Section 15 of the 17 Tobacco Product Manufacturers' Escrow Act. 18 "Stamps" means (i) revenue tax stamps as provided for in 19 Section 3 of the Cigarette Tax Act and (ii) stamps evidencing 20 the payment of use tax as provided for in Section 3 of the 21 Cigarette Use Tax Act. 22 "Tobacco product manufacturer" has the same meaning as 23 that term is defined in Section 10 of the Tobacco Product 24 Manufacturers' Escrow Act. 25 Section 15. Distributor's determination of tobacco 26 product manufacturer compliance. A distributor may not affix, 27 or cause to be affixed, stamps to individual packages of 28 cigarettes delivered or caused to be delivered by the 29 distributor in this State if the tobacco product manufacturer 30 of those cigarettes has: SB2017 Engrossed -2- LRB9215600SMdv 1 (1) failed to become a participating manufacturer; or 2 (2) 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 5 into compliance with subdivision (a)(2) of Section 15 of the 6 Tobacco Product Manufacturers' Escrow Act. 7 Section 20. Penalties. A distributor who violates this 8 Act is subject to the same penalties as provided in Section 6 9 of the Cigarette Tax Act or Section 6 of the Cigarette Use 10 Tax Act, as appropriate. 11 Section 25. Rules. The Illinois Attorney General, in 12 consultation with the Illinois Department of Revenue, shall 13 adopt rules as necessary to effectuate compliance with this 14 Act and with the Tobacco Product Manufacturers' Escrow Act. 15 Section 905. The Tobacco Product Manufacturers' Escrow 16 Act is amended by adding Section 20 as follows: 17 (30 ILCS 168/20 new) 18 Sec. 20. Rules. The Illinois Attorney General, in 19 consultation with the Illinois Department of Revenue, shall 20 adopt rules as provided under Section 25 of the Tobacco 21 Product Manufacturers' Escrow Enforcement Act. 22 Section 910. The Cigarette Tax Act is amended by 23 changing Sections 3 and 6 as follows: 24 (35 ILCS 130/3) (from Ch. 120, par. 453.3) 25 Sec. 3. Affixing tax stamp; remitting tax to the 26 Department. Payment of the taxes imposed by Section 2 of 27 this Act shall (except as hereinafter provided) be evidenced 28 by revenue tax stamps affixed to each original package of SB2017 Engrossed -3- LRB9215600SMdv 1 cigarettes. Each distributor of cigarettes, before delivering 2 or causing to be delivered any original package of cigarettes 3 in this State to a purchaser, shall firmly affix a proper 4 stamp or stamps to each such package, or (in case of 5 manufacturers of cigarettes in original packages which are 6 contained inside a sealed transparent wrapper) shall imprint 7 the required language on the original package of cigarettes 8 beneath such outside wrapper, as hereinafter provided. 9 No stamp or imprint may be affixed to, or made upon, any 10 package of cigarettes unless that package complies with all 11 requirements of the federal Cigarette Labeling and 12 Advertising Act, 15 U.S.C. 1331 and following, for the 13 placement of labels, warnings, or any other information upon 14 a package of cigarettes that is sold within the United 15 States. Under the authority of Section 6, the Department 16 shall revoke the license of any distributor that is 17 determined to have violated this paragraph. A person may not 18 affix a stamp on a package of cigarettes, cigarette papers, 19 wrappers, or tubes if that individual package has been marked 20 for export outside the United States with a label or notice 21 in compliance with Section 290.185 of Title 27 of the Code of 22 Federal Regulations. It is not a defense to a proceeding for 23 violation of this paragraph that the label or notice has been 24 removed, mutilated, obliterated, or altered in any manner. 25 The Department, or any person authorized by the 26 Department, shall sell such stamps only to persons holding 27 valid licenses as distributors under this Act. The Department 28 may refuse to sell stamps to any person who does not comply 29 with the provisions of this Act. 30 Prior to December 1, 1985, the Department shall allow a 31 distributor 21 days in which to make final payment of the 32 amount to be paid for such stamps, by allowing the 33 distributor to make payment for the stamps at the time of 34 purchasing them with a draft which shall be in such form as SB2017 Engrossed -4- LRB9215600SMdv 1 the Department prescribes, and which shall be payable within 2 21 days thereafter: Provided that such distributor has filed 3 with the Department, and has received the Department's 4 approval of, a bond, which is in addition to the bond 5 required under Section 4 of this Act, payable to the 6 Department in an amount equal to 80% of such distributor's 7 average monthly tax liability to the Department under this 8 Act during the preceding calendar year or $500,000, whichever 9 is less. The Bond shall be joint and several and shall be in 10 the form of a surety company bond in such form as the 11 Department prescribes, or it may be in the form of a bank 12 certificate of deposit or bank letter of credit. The bond 13 shall be conditioned upon the distributor's payment of amount 14 of any 21-day draft which the Department accepts from that 15 distributor for the delivery of stamps to that distributor 16 under this Act. The distributor's failure to pay any such 17 draft, when due, shall also make such distributor 18 automatically liable to the Department for a penalty equal to 19 25% of the amount of such draft. 20 On and after December 1, 1985, the Department shall allow 21 a distributor 30 days in which to make final payment of the 22 amount to be paid for such stamps, by allowing the 23 distributor to make payment for the stamps at the time of 24 purchasing them with a draft which shall be in such form as 25 the Department prescribes, and which shall be payable within 26 30 days thereafter, and beginning on January 1, 2003 and 27 thereafter, the draft shall be payable by means of electronic 28 funds transfer: Provided that such distributor has filed 29 with the Department, and has received the Department's 30 approval of, a bond, which is in addition to the bond 31 required under Section 4 of this Act, payable to the 32 Department in an amount equal to 150% of such distributor's 33 average monthly tax liability to the Department under this 34 Act during the preceding calendar year or $750,000, whichever SB2017 Engrossed -5- LRB9215600SMdv 1 is less, except that as to bonds filed on or after January 1, 2 1987, such additional bond shall be in an amount equal to 3 100% of such distributor's average monthly tax liability 4 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 9 credit. The bond shall be conditioned upon the distributor's 10 payment of the amount of any 30-day draft which the 11 Department accepts from that distributor for the delivery of 12 stamps to that distributor under this Act. The distributor's 13 failure to pay any such draft, when due, shall also make such 14 distributor automatically liable to the Department for a 15 penalty equal to 25% of the amount of such draft. 16 Every prior continuous compliance taxpayer shall be 17 exempt from all requirements under this Section concerning 18 the 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 21 continue for each such taxpayer until such time as he may be 22 determined by the Department to be delinquent in the filing 23 of any returns, or is determined by the Department (either 24 through the Department's issuance of a final assessment which 25 has become final under the Act, or by the taxpayer's filing 26 of a return which admits tax to be due that is not paid) to 27 be delinquent or deficient in the paying of any tax under 28 this Act, at which time that taxpayer shall become subject to 29 the bond requirements of this Section and, as a condition of 30 being allowed to continue to engage in the business licensed 31 under this Act, shall be required to furnish bond to the 32 Department in such form as provided in this Section. Such 33 taxpayer shall furnish such bond for a period of 2 years, 34 after which, if the taxpayer has not been delinquent in the SB2017 Engrossed -6- LRB9215600SMdv 1 filing of any returns, or delinquent or deficient in the 2 paying of any tax under this Act, the Department may 3 reinstate such person as a prior continuance compliance 4 taxpayer. Any taxpayer who fails to pay an admitted or 5 established liability under this Act may also be required to 6 post bond or other acceptable security with the Department 7 guaranteeing the payment of such admitted or established 8 liability. 9 Any person aggrieved by any decision of the Department 10 under this Section may, within the time allowed by law, 11 protest and request a hearing, whereupon the Department shall 12 give notice and shall hold a hearing in conformity with the 13 provisions of this Act and then issue its final 14 administrative decision in the matter to such person. In the 15 absence of such a protest filed within the time allowed by 16 law, the Department's decision shall become final without any 17 further determination being made or notice given. 18 The Department shall discharge any surety and shall 19 release and return any bond or security deposited, assigned, 20 pledged, or otherwise provided to it by a taxpayer under this 21 Section within 30 days after: 22 (1) Such taxpayer becomes a prior continuous compliance 23 taxpayer; or 24 (2) Such taxpayer has ceased to collect receipts on 25 which he is required to remit tax to the Department, has 26 filed a final tax return, and has paid to the Department an 27 amount sufficient to discharge his remaining tax liability as 28 determined by the Department under this Act. The Department 29 shall make a final determination of the taxpayer's 30 outstanding tax liability as expeditiously as possible after 31 his final tax return has been filed. If the Department 32 cannot make such final determination within 45 days after 33 receiving the final tax return, within such period it shall 34 so notify the taxpayer, stating its reasons therefor. SB2017 Engrossed -7- LRB9215600SMdv 1 The Department may authorize distributors to affix 2 revenue tax stamps by imprinting tax meter stamps upon 3 original packages of cigarettes. The Department shall adopt 4 rules and regulations relating to the imprinting of such tax 5 meter stamps as will result in payment of the proper taxes as 6 herein imposed. No distributor may affix revenue tax stamps 7 to original packages of cigarettes by imprinting tax meter 8 stamps thereon unless such distributor has first obtained 9 permission from the Department to employ this method of 10 affixation. The Department shall regulate the use of tax 11 meters and may, to assure the proper collection of the taxes 12 imposed by this Act, revoke or suspend the privilege, 13 theretofore granted by the Department to any distributor, to 14 imprint tax meter stamps upon original packages of 15 cigarettes. 16 Illinois cigarette manufacturers who place their 17 cigarettes in original packages which are contained inside a 18 sealed transparent wrapper, and similar out-of-State 19 cigarette manufacturers who elect to qualify and are accepted 20 by the Department as distributors under Section 4b of this 21 Act, shall pay the taxes imposed by this Act by remitting the 22 amount thereof to the Department by the 5th day of each month 23 covering cigarettes shipped or otherwise delivered in 24 Illinois to purchasers during the preceding calendar month. 25 Such manufacturers of cigarettes in original packages which 26 are contained inside a sealed transparent wrapper, before 27 delivering such cigarettes or causing such cigarettes to be 28 delivered in this State to purchasers, shall evidence their 29 obligation to remit the taxes due with respect to such 30 cigarettes by imprinting language to be prescribed by the 31 Department on each original package of such cigarettes 32 underneath the sealed transparent outside wrapper of such 33 original package, in such place thereon and in such manner as 34 the Department may designate. Such imprinted language shall SB2017 Engrossed -8- LRB9215600SMdv 1 acknowledge the manufacturer's payment of or liability for 2 the tax imposed by this Act with respect to the distribution 3 of such cigarettes. 4 No person may affix, or cause to be affixed, any stamp or 5 imprint to a package of cigarettes, as provided for in this 6 Section, unless the tobacco product manufacturer, as defined 7 in Section 10 of the Tobacco Product Manufacturers' Escrow 8 Act, that made or sold the cigarettes is a participating 9 manufacturer, as defined in subdivision (a)(1) of Section 15 10 of the Tobacco Product Manufacturers' Escrow Act, or has made 11 all escrow payments required by subdivision (a)(2)(A) of 12 Section 15 of the Tobacco Product Manufacturers' Escrow Act. 13 (Source: P.A. 91-246, eff. 7-22-99; 92-322, eff. 1-1-02.) 14 (35 ILCS 130/6) (from Ch. 120, par. 453.6) 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 noncompliance with any provision herein 20 contained, or for any noncompliance with any lawful rule or 21 regulation promulgated by the Department under Section 8 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, cancelled 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 Engrossed -9- 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, as aforesaid, shall be reissued to 18 any such distributor within a period of 6 months after the 19 date of the final determination of such revocation. No such 20 license shall be reissued at all so long as the person who 21 would receive the license is ineligible to receive a 22 distributor's license under this Act for any one or more of 23 the reasons 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 any of the provisions of this Act from acting 27 as a distributor of cigarettes in this State. 28 (Source: P.A. 91-901, eff. 1-1-01.) 29 Section 915. The Cigarette Use Tax Act is amended by 30 changing Sections 3 and 6 as follows: 31 (35 ILCS 135/3) (from Ch. 120, par. 453.33) 32 Sec. 3. Stamp payment. The tax hereby imposed shall be SB2017 Engrossed -10- LRB9215600SMdv 1 collected by a distributor maintaining a place of business in 2 this State or a distributor authorized by the Department 3 pursuant to Section 7 hereof to collect the tax, and the 4 amount of the tax shall be added to the price of the 5 cigarettes sold by such distributor. Collection of the tax 6 shall be evidenced by a stamp or stamps affixed to each 7 original package of cigarettes or by an authorized substitute 8 for such stamp imprinted on each original package of such 9 cigarettes underneath the sealed transparent outside wrapper 10 of such original package, except as hereinafter provided. 11 Each distributor who is required or authorized to collect the 12 tax herein imposed, before delivering or causing to be 13 delivered any original packages of cigarettes in this State 14 to any purchaser, shall firmly affix a proper stamp or stamps 15 to each such package, or (in the case of manufacturers of 16 cigarettes in original packages which are contained inside a 17 sealed transparent wrapper) shall imprint the required 18 language on the original package of cigarettes beneath such 19 outside wrapper as hereinafter provided. Such stamp or stamps 20 need not be affixed to the original package of any cigarettes 21 with respect to which the distributor is required to affix a 22 like stamp or stamps by virtue of the Cigarette Tax Act, 23 however, and no tax imprint need be placed underneath the 24 sealed transparent wrapper of an original package of 25 cigarettes with respect to which the distributor is required 26 or authorized to employ a like tax imprint by virtue of the 27 Cigarette Tax Act. 28 No stamp or imprint may be affixed to, or made upon, any 29 package of cigarettes unless that package complies with all 30 requirements of the federal Cigarette Labeling and 31 Advertising Act, 15 U.S.C. 1331 and following, for the 32 placement of labels, warnings, or any other information upon 33 a package of cigarettes that is sold within the United 34 States. Under the authority of Section 6, the Department SB2017 Engrossed -11- LRB9215600SMdv 1 shall revoke the license of any distributor that is 2 determined to have violated this paragraph. A person may not 3 affix a stamp on a package of cigarettes, cigarette papers, 4 wrappers, or tubes if that individual package has been marked 5 for export outside the United States with a label or notice 6 in compliance with Section 290.185 of Title 27 of the Code of 7 Federal Regulations. It is not a defense to a proceeding for 8 violation of this paragraph that the label or notice has been 9 removed, mutilated, obliterated, or altered in any manner. 10 Stamps, when required hereunder, shall be purchased from 11 the Department, or any person authorized by the Department, 12 by distributors. The Department may refuse to sell stamps to 13 any person who does not comply with the provisions of this 14 Act. 15 Prior to December 1, 1985, the Department shall allow a 16 distributor 21 days in which to make final payment of the 17 amount to be paid for such stamps, by allowing the 18 distributor to make payment for the stamps at the time of 19 purchasing them with a draft which shall be in such form as 20 the Department prescribes, and which shall be payable within 21 21 days thereafter: Provided that such distributor has filed 22 with the Department, and has received the Department's 23 approval of, a bond, which is in addition to the bond 24 required under Section 4 of this Act, payable to the 25 Department in an amount equal to 80% of such distributor's 26 average monthly tax liability to the Department under this 27 Act during the preceding calendar year or $500,000, whichever 28 is less. The bond shall be joint and several and shall be in 29 the form of a surety company bond in such form as the 30 Department prescribes, or it may be in the form of a bank 31 certificate of deposit or bank letter of credit. The bond 32 shall be conditioned upon the distributor's payment of the 33 amount of any 21-day draft which the Department accepts from 34 that distributor for the delivery of stamps to that SB2017 Engrossed -12- LRB9215600SMdv 1 distributor under this Act. The distributor's failure to pay 2 any such draft, when due, shall also make such distributor 3 automatically liable to the Department for a penalty equal to 4 25% of the amount of such draft. 5 On and after December 1, 1985, the Department shall allow 6 a distributor 30 days in which to make final payment of the 7 amount to be paid for such stamps, by allowing the 8 distributor to make payment for the stamps at the time of 9 purchasing them with a draft which shall be in such form as 10 the Department prescribes, and which shall be payable within 11 30 days thereafter, and beginning on January 1, 2003 and 12 thereafter, the draft shall be payable by means of electronic 13 funds transfer: Provided that such distributor has filed 14 with the Department, and has received the Department's 15 approval of, a bond, which is in addition to the bond 16 required under Section 4 of this Act, payable to the 17 Department in an amount equal to 150% of such distributor's 18 average monthly tax liability to the Department under this 19 Act during the preceding calendar year or $750,000, whichever 20 is less, except that as to bonds filed on or after January 1, 21 1987, such additional bond shall be in an amount equal to 22 100% of such distributor's average monthly tax liability 23 under this Act during the preceding calendar year or 24 $750,000, whichever is less. The bond shall be joint and 25 several and shall be in the form of a surety company bond in 26 such form as the Department prescribes, or it may be in the 27 form of a bank certificate of deposit or bank letter of 28 credit. The bond shall be conditioned upon the distributor's 29 payment of the amount of any 30-day draft which the 30 Department accepts from that distributor for the delivery of 31 stamps to that distributor under this Act. The distributor's 32 failure to pay any such draft, when due, shall also make such 33 distributor automatically liable to the Department for a 34 penalty equal to 25% of the amount of such draft. SB2017 Engrossed -13- LRB9215600SMdv 1 Every prior continuous compliance taxpayer shall be 2 exempt from all requirements under this Section concerning 3 the furnishing of such bond, as defined in this Section, as a 4 condition precedent to his being authorized to engage in the 5 business licensed under this Act. This exemption shall 6 continue for each such taxpayer until such time as he may be 7 determined by the Department to be delinquent in the filing 8 of any returns, or is determined by the Department (either 9 through the Department's issuance of a final assessment which 10 has become final under the Act, or by the taxpayer's filing 11 of a return which admits tax to be due that is not paid) to 12 be delinquent or deficient in the paying of any tax under 13 this Act, at which time that taxpayer shall become subject to 14 the bond requirements of this Section and, as a condition of 15 being allowed to continue to engage in the business licensed 16 under this Act, shall be required to furnish bond to the 17 Department in such form as provided in this Section. Such 18 taxpayer shall furnish such bond for a period of 2 years, 19 after which, if the taxpayer has not been delinquent in the 20 filing of any returns, or delinquent or deficient in the 21 paying of any tax under this Act, the Department may 22 reinstate such person as a prior continuance compliance 23 taxpayer. Any taxpayer who fails to pay an admitted or 24 established liability under this Act may also be required to 25 post bond or other acceptable security with the Department 26 guaranteeing the payment of such admitted or established 27 liability. 28 Any person aggrieved by any decision of the Department 29 under this Section may, within the time allowed by law, 30 protest and request a hearing, whereupon the Department shall 31 give notice and shall hold a hearing in conformity with the 32 provisions of this Act and then issue its final 33 administrative decision in the matter to such person. In the 34 absence of such a protest filed within the time allowed by SB2017 Engrossed -14- LRB9215600SMdv 1 law, the Department's decision shall become final without any 2 further determination being made or notice given. 3 The Department shall discharge any surety and shall 4 release and return any bond or security deposited, assigned, 5 pledged, or otherwise provided to it by a taxpayer under this 6 Section within 30 days after: 7 (1) such Taxpayer becomes a prior continuous 8 compliance taxpayer; or 9 (2) such taxpayer has ceased to collect receipts on 10 which he is required to remit tax to the Department, has 11 filed a final tax return, and has paid to the Department 12 an amount sufficient to discharge his remaining tax 13 liability as determined by the Department under this Act. 14 The Department shall make a final determination of the 15 taxpayer's outstanding tax liability as expeditiously as 16 possible after his final tax return has been filed. If 17 the Department cannot make such final determination 18 within 45 days after receiving the final tax return, 19 within such period it shall so notify the taxpayer, 20 stating its reasons therefor. 21 At the time of purchasing such stamps from the Department 22 when purchase is required by this Act, or at the time when 23 the tax which he has collected is remitted by a distributor 24 to the Department without the purchase of stamps from the 25 Department when that method of remitting the tax that has 26 been collected is required or authorized by this Act, the 27 distributor shall be allowed a discount during any year 28 commencing July 1 and ending the following June 30 in 29 accordance with the schedule set out hereinbelow, from the 30 amount to be paid by him to the Department for such stamps, 31 or to be paid by him to the Department on the basis of 32 monthly remittances (as the case may be), to cover the cost, 33 to such distributor, of collecting the tax herein imposed by 34 affixing such stamps to the original packages of cigarettes SB2017 Engrossed -15- LRB9215600SMdv 1 sold by such distributor or by placing tax imprints 2 underneath the sealed transparent wrapper of original 3 packages of cigarettes sold by such distributor (as the case 4 may be): (1) Prior to December 1, 1985, a discount equal to 5 1-2/3% of the amount of the tax up to and including the first 6 $700,000 paid hereunder by such distributor to the Department 7 during any such year; 1-1/3% of the next $700,000 of tax or 8 any part thereof, paid hereunder by such distributor to the 9 Department during any such year; 1% of the next $700,000 of 10 tax, or any part thereof, paid hereunder by such distributor 11 to the Department during any such year; and 2/3 of 1% of the 12 amount of any additional tax paid hereunder by such 13 distributor to the Department during any such year or (2) On 14 and after December 1, 1985, a discount equal to 1.75% of the 15 amount of the tax payable under this Act up to and including 16 the first $3,000,000 paid hereunder by such distributor to 17 the Department during any such year and 1.5% of the amount of 18 any additional tax paid hereunder by such distributor to the 19 Department during any such year. 20 Two or more distributors that use a common means of 21 affixing revenue tax stamps or that are owned or controlled 22 by the same interests shall be treated as a single 23 distributor for the purpose of computing the discount. 24 Cigarette manufacturers who are distributors under this 25 Act, and who place their cigarettes in original packages 26 which are contained inside a sealed transparent wrapper, 27 shall be required to remit the tax which they are required to 28 collect under this Act to the Department by remitting the 29 amount thereof to the Department by the 5th day of each 30 month, covering cigarettes shipped or otherwise delivered to 31 points in Illinois to purchasers during the preceding 32 calendar month, but a distributor need not remit to the 33 Department the tax so collected by him from purchasers under 34 this Act to the extent to which such distributor is required SB2017 Engrossed -16- LRB9215600SMdv 1 to remit the tax imposed by the Cigarette Tax Act to the 2 Department with respect to the same cigarettes. All taxes 3 upon cigarettes under this Act are a direct tax upon the 4 retail consumer and shall conclusively be presumed to be 5 precollected for the purpose of convenience and facility 6 only. Distributors who are manufacturers of cigarettes in 7 original packages which are contained inside a sealed 8 transparent wrapper, before delivering such cigarettes or 9 causing such cigarettes to be delivered in this State to 10 purchasers, shall evidence their obligation to collect and 11 remit the tax due with respect to such cigarettes by 12 imprinting language to be prescribed by the Department on 13 each original package of such cigarettes underneath the 14 sealed transparent outside wrapper of such original package, 15 in such place thereon and in such manner as the Department 16 may prescribe; provided (as stated hereinbefore) that this 17 requirement does not apply when such distributor is required 18 or authorized by the Cigarette Tax Act to place the tax 19 imprint provided for in the last paragraph of Section 3 of 20 that Act underneath the sealed transparent wrapper of such 21 original package of cigarettes. Such imprinted language shall 22 acknowledge the manufacturer's collection and payment of or 23 liability for the tax imposed by this Act with respect to 24 such cigarettes. 25 The Department shall adopt the design or designs of the 26 tax stamps and shall procure the printing of such stamps in 27 such amounts and denominations as it deems necessary to 28 provide for the affixation of the proper amount of tax stamps 29 to each original package of cigarettes. 30 Where tax stamps are required, the Department may 31 authorize distributors to affix revenue tax stamps by 32 imprinting tax meter stamps upon original packages of 33 cigarettes. The Department shall adopt rules and regulations 34 relating to the imprinting of such tax meter stamps as will SB2017 Engrossed -17- LRB9215600SMdv 1 result in payment of the proper taxes as herein imposed. No 2 distributor may affix revenue tax stamps to original packages 3 of cigarettes by imprinting meter stamps thereon unless such 4 distributor has first obtained permission from the Department 5 to employ this method of affixation. The Department shall 6 regulate the use of tax meters and may, to assure the proper 7 collection of the taxes imposed by this Act, revoke or 8 suspend the privilege, theretofore granted by the Department 9 to any distributor, to imprint tax meter stamps upon original 10 packages of cigarettes. 11 The tax hereby imposed and not paid pursuant to this 12 Section shall be paid to the Department directly by any 13 person using such cigarettes within this State, pursuant to 14 Section 12 hereof. 15 No person may affix, or cause to be affixed, any stamp or 16 imprint to a package of cigarettes, as provided for in this 17 Section, unless the tobacco product manufacturer, as defined 18 in Section 10 of the Tobacco Product Manufacturers' Escrow 19 Act, that made or sold the cigarettes is a participating 20 manufacturer, as defined in subdivision (a)(1) of Section 15 21 of the Tobacco Product Manufacturers' Escrow Act, or has made 22 all escrow payments required by subdivision (a)(2)(A) of 23 Section 15 of the Tobacco Product Manufacturers' Escrow Act. 24 (Source: P.A. 91-246, eff. 7-22-99; 92-322, eff. 1-1-02.) 25 (35 ILCS 135/6) (from Ch. 120, par. 453.36) 26 Sec. 6. Revocation, cancellation, or suspension of 27 license. The Department may, after notice and hearing as 28 provided for by this Act, revoke, cancel or suspend the 29 license of any distributor for the violation of any provision 30 of this Act, or for non-compliance with any provision herein 31 contained, or for any non-compliance with any lawful rule or 32 regulation promulgated by the Department under Section 21 of 33 this Act, or because the licensee is determined to be SB2017 Engrossed -18- LRB9215600SMdv 1 ineligible for a distributor's license for any one or more of 2 the reasons provided for in Section 4 of this Act. However, 3 no such license shall be revoked, canceled or suspended, 4 except after a hearing by the Department with notice to the 5 distributor, as aforesaid, and affording such distributor a 6 reasonable opportunity to appear and defend, and any 7 distributor aggrieved by any decision of the Department with 8 respect thereto may have the determination of the Department 9 judicially reviewed, as herein provided. 10 The Department may revoke, cancel, or suspend the license 11 of any distributor for a violation of the Tobacco Product 12 Manufacturers' Escrow Enforcement Act as provided in Section 13 20 of that Act. 14 Any distributor aggrieved by any decision of the 15 Department under this Section may, within 20 days after 16 notice of the decision, protest and request a hearing. Upon 17 receiving a request for a hearing, the Department shall give 18 notice in writing to the distributor requesting the hearing 19 that contains a statement of the charges preferred against 20 the distributor and that states the time and place fixed for 21 the hearing. The Department shall hold the hearing in 22 conformity with the provisions of this Act and then issue its 23 final administrative decision in the matter to the 24 distributor. In the absence of a protest and request for a 25 hearing within 20 days, the Department's decision shall 26 become final without any further determination being made or 27 notice given. 28 No license so revoked, shall be reissued to any such 29 distributor within a period of 6 months after the date of the 30 final determination of such revocation. No such license 31 shall be reissued at all so long as the person who would 32 receive the license is ineligible to receive a distributor's 33 license under this Act for any one or more of the reasons 34 provided for in Section 4 of this Act. SB2017 Engrossed -19- LRB9215600SMdv 1 The Department upon complaint filed in the circuit court 2 may by injunction restrain any person who fails, or refuses, 3 to comply with this Act from acting as a distributor of 4 cigarettes in this State. 5 (Source: P.A. 91-901, eff. 1-1-01.) 6 Section 920. The Tobacco Products Tax Act of 1995 is 7 amended by changing Section 10-10 as follows: 8 (35 ILCS 143/10-10) 9 Sec. 10-10. Tax imposed. On the first day of the third 10 month after the month in which this Act becomes law, a tax is 11 imposed on any person engaged in business as a distributor of 12 tobacco products, as defined in Section 10-5, at the rate of 13 18% of the wholesale price of tobacco products sold or 14 otherwise disposed of to retailers or consumers located in 15 this State. The tax is in addition to all other occupation or 16 privilege taxes imposed by the State of Illinois, by any 17 political subdivision thereof, or by any municipal 18 corporation. However, the tax is not imposed upon any 19 activity in that business in interstate commerce or 20 otherwise, to the extent to which that activity may not, 21 under the Constitution and Statutes of the United States, be 22 made the subject of taxation by this State. The tax is also 23 not imposed on sales made to the United States or any entity 24 thereof. 25 All moneys received by the Department under this Act 26 shall be paid into the Long-Term Care Provider Fund of the 27 State Treasury. 28 No person may pay the tax levied under this Section on a 29 tobacco product defined as a cigarette under Section 10 of 30 the Tobacco Product Manufacturers' Escrow Act unless the 31 tobacco product manufacturer, as defined in Section 10 of the 32 Tobacco Product Manufacturers' Escrow Act, that made or sold SB2017 Engrossed -20- LRB9215600SMdv 1 the cigarettes is a participating manufacturer, as defined in 2 subdivision (a)(1) of Section 15 of the Tobacco Product 3 Manufacturers' Escrow Act, or has made all escrow payments 4 required by subdivision (a)(2)(A) of Section 15 of the 5 Tobacco Product Manufacturers' Escrow Act. 6 (Source: P.A. 92-231, eff. 8-2-01.) 7 Section 999. Effective date. This Act takes effect upon 8 becoming law.