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Public Act 92-0322
SB856 Enrolled LRB9205820SMdv
AN ACT in relation to taxation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Cigarette Tax Act is amended by changing
Sections 3, 4, 5, 9, 9a, 9b, and 24 and by adding Section 18c
as follows:
(35 ILCS 130/3) (from Ch. 120, par. 453.3)
Sec. 3. Affixing tax stamp; remitting tax to the
Department. Payment of the taxes imposed by Section 2 of
this Act shall (except as hereinafter provided) be evidenced
by revenue tax stamps affixed to each original package of
cigarettes. Each distributor of cigarettes, before delivering
or causing to be delivered any original package of cigarettes
in this State to a purchaser, shall firmly affix a proper
stamp or stamps to each such package, or (in case of
manufacturers of cigarettes in original packages which are
contained inside a sealed transparent wrapper) shall imprint
the required language on the original package of cigarettes
beneath such outside wrapper, as hereinafter provided.
No stamp or imprint may be affixed to, or made upon, any
package of cigarettes unless that package complies with all
requirements of the federal Cigarette Labeling and
Advertising Act, 15 U.S.C. 1331 and following, for the
placement of labels, warnings, or any other information upon
a package of cigarettes that is sold within the United
States. Under the authority of Section 6, the Department
shall revoke the license of any distributor that is
determined to have violated this paragraph. A person may not
affix a stamp on a package of cigarettes, cigarette papers,
wrappers, or tubes if that individual package has been marked
for export outside the United States with a label or notice
in compliance with Section 290.185 of Title 27 of the Code of
Federal Regulations. It is not a defense to a proceeding for
violation of this paragraph that the label or notice has been
removed, mutilated, obliterated, or altered in any manner.
The Department, or any person authorized by the
Department, shall sell such stamps only to persons holding
valid licenses as distributors under this Act. The Department
may refuse to sell stamps to any person who does not comply
with the provisions of this Act.
Prior to December 1, 1985, the Department shall allow a
distributor 21 days in which to make final payment of the
amount to be paid for such stamps, by allowing the
distributor to make payment for the stamps at the time of
purchasing them with a draft which shall be in such form as
the Department prescribes, and which shall be payable within
21 days thereafter: Provided that such distributor has filed
with the Department, and has received the Department's
approval of, a bond, which is in addition to the bond
required under Section 4 of this Act, payable to the
Department in an amount equal to 80% of such distributor's
average monthly tax liability to the Department under this
Act during the preceding calendar year or $500,000, whichever
is less. The Bond shall be joint and several and shall be in
the form of a surety company bond in such form as the
Department prescribes, or it may be in the form of a bank
certificate of deposit or bank letter of credit. The bond
shall be conditioned upon the distributor's payment of amount
of any 21-day draft which the Department accepts from that
distributor for the delivery of stamps to that distributor
under this Act. The distributor's failure to pay any such
draft, when due, shall also make such distributor
automatically liable to the Department for a penalty equal to
25% of the amount of such draft.
On and after December 1, 1985, the Department shall allow
a distributor 30 days in which to make final payment of the
amount to be paid for such stamps, by allowing the
distributor to make payment for the stamps at the time of
purchasing them with a draft which shall be in such form as
the Department prescribes, and which shall be payable within
30 days thereafter, and beginning on January 1, 2003 and
thereafter, the draft shall be payable by means of electronic
funds transfer: Provided that such distributor has filed
with the Department, and has received the Department's
approval of, a bond, which is in addition to the bond
required under Section 4 of this Act, payable to the
Department in an amount equal to 150% of such distributor's
average monthly tax liability to the Department under this
Act during the preceding calendar year or $750,000, whichever
is less, except that as to bonds filed on or after January 1,
1987, such additional bond shall be in an amount equal to
100% of such distributor's average monthly tax liability
under this Act during the preceding calendar year or
$750,000, whichever is less. The bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of
credit. The bond shall be conditioned upon the distributor's
payment of the amount of any 30-day draft which the
Department accepts from that distributor for the delivery of
stamps to that distributor under this Act. The distributor's
failure to pay any such draft, when due, shall also make such
distributor automatically liable to the Department for a
penalty equal to 25% of the amount of such draft.
Every prior continuous compliance taxpayer shall be
exempt from all requirements under this Section concerning
the furnishing of such bond, as defined in this Section, as a
condition precedent to his being authorized to engage in the
business licensed under this Act. This exemption shall
continue for each such taxpayer until such time as he may be
determined by the Department to be delinquent in the filing
of any returns, or is determined by the Department (either
through the Department's issuance of a final assessment which
has become final under the Act, or by the taxpayer's filing
of a return which admits tax to be due that is not paid) to
be delinquent or deficient in the paying of any tax under
this Act, at which time that taxpayer shall become subject to
the bond requirements of this Section and, as a condition of
being allowed to continue to engage in the business licensed
under this Act, shall be required to furnish bond to the
Department in such form as provided in this Section. Such
taxpayer shall furnish such bond for a period of 2 years,
after which, if the taxpayer has not been delinquent in the
filing of any returns, or delinquent or deficient in the
paying of any tax under this Act, the Department may
reinstate such person as a prior continuance compliance
taxpayer. Any taxpayer who fails to pay an admitted or
established liability under this Act may also be required to
post bond or other acceptable security with the Department
guaranteeing the payment of such admitted or established
liability.
Any person aggrieved by any decision of the Department
under this Section may, within the time allowed by law,
protest and request a hearing, whereupon the Department shall
give notice and shall hold a hearing in conformity with the
provisions of this Act and then issue its final
administrative decision in the matter to such person. In the
absence of such a protest filed within the time allowed by
law, the Department's decision shall become final without any
further determination being made or notice given.
The Department shall discharge any surety and shall
release and return any bond or security deposited, assigned,
pledged, or otherwise provided to it by a taxpayer under this
Section within 30 days after:
(1) Such taxpayer becomes a prior continuous compliance
taxpayer; or
(2) Such taxpayer has ceased to collect receipts on
which he is required to remit tax to the Department, has
filed a final tax return, and has paid to the Department an
amount sufficient to discharge his remaining tax liability as
determined by the Department under this Act. The Department
shall make a final determination of the taxpayer's
outstanding tax liability as expeditiously as possible after
his final tax return has been filed. If the Department
cannot make such final determination within 45 days after
receiving the final tax return, within such period it shall
so notify the taxpayer, stating its reasons therefor.
The Department may authorize distributors to affix
revenue tax stamps by imprinting tax meter stamps upon
original packages of cigarettes. The Department shall adopt
rules and regulations relating to the imprinting of such tax
meter stamps as will result in payment of the proper taxes as
herein imposed. No distributor may affix revenue tax stamps
to original packages of cigarettes by imprinting tax meter
stamps thereon unless such distributor has first obtained
permission from the Department to employ this method of
affixation. The Department shall regulate the use of tax
meters and may, to assure the proper collection of the taxes
imposed by this Act, revoke or suspend the privilege,
theretofore granted by the Department to any distributor, to
imprint tax meter stamps upon original packages of
cigarettes.
Illinois cigarette manufacturers who place their
cigarettes in original packages which are contained inside a
sealed transparent wrapper, and similar out-of-State
cigarette manufacturers who elect to qualify and are accepted
by the Department as distributors under Section 4b of this
Act, shall pay the taxes imposed by this Act by remitting the
amount thereof to the Department by the 5th day of each month
covering cigarettes shipped or otherwise delivered in
Illinois to purchasers during the preceding calendar month.
Such manufacturers of cigarettes in original packages which
are contained inside a sealed transparent wrapper, before
delivering such cigarettes or causing such cigarettes to be
delivered in this State to purchasers, shall evidence their
obligation to remit the taxes due with respect to such
cigarettes by imprinting language to be prescribed by the
Department on each original package of such cigarettes
underneath the sealed transparent outside wrapper of such
original package, in such place thereon and in such manner as
the Department may designate. Such imprinted language shall
acknowledge the manufacturer's payment of or liability for
the tax imposed by this Act with respect to the distribution
of such cigarettes.
(Source: P.A. 91-246, eff. 7-22-99.)
(35 ILCS 130/4) (from Ch. 120, par. 453.4)
Sec. 4. Distributor's license. No person may engage in
business as a distributor of cigarettes in this State within
the meaning of the first 2 definitions of distributor in
Section 1 of this Act without first having obtained a license
therefor from the Department. Application for license shall
be made to the Department in form as furnished and prescribed
by the Department. Each applicant for a license under this
Section shall furnish to the Department on the form signed
and verified by the applicant the following information:
(a) The name and address of the applicant;
(b) The address of the location at which the
applicant proposes to engage in business as a distributor
of cigarettes in this State;
(c) Such other additional information as the
Department may lawfully require by its rules and
regulations.
The annual license fee payable to the Department for each
distributor's license shall be $250. The purpose of such
annual license fee is to defray the cost, to the Department,
of coding, serializing or coding and serializing cigarette
tax stamps. Each applicant for license shall pay such fee to
the Department at the time of submitting his application for
license to the Department.
Every applicant who is required to procure a
distributor's license shall file with his application a joint
and several bond. Such bond shall be executed to the
Department of Revenue, with good and sufficient surety or
sureties residing or licensed to do business within the State
of Illinois, in the amount of $2,500, conditioned upon the
true and faithful compliance by the licensee with all of the
provisions of this Act. Such bond, or a reissue thereof, or a
substitute therefor, shall be kept in effect during the
entire period covered by the license. A separate application
for license shall be made, a separate annual license fee
paid, and a separate bond filed, for each place of business
at which a person who is required to procure a distributor's
license under this Section proposes to engage in business as
a distributor in Illinois under this Act.
The following are ineligible to receive a distributor's
license under this Act:
(1) a person who is not of good character and
reputation in the community in which he resides;
(2) a person who has been convicted of a
felony under any Federal or State law, if the
Department, after investigation and a hearing, if
requested by the applicant, determines that such
person has not been sufficiently rehabilitated to
warrant the public trust;
(3) a corporation, if any officer, manager or
director thereof, or any stockholder or stockholders
owning in the aggregate more than 5% of the stock of
such corporation, would not be eligible to receive a
license under this Act for any reason.
The Department, upon receipt of an application, license
fee and bond in proper form, from a person who is eligible to
receive a distributor's license under this Act, shall issue
to such applicant a license in form as prescribed by the
Department, which license shall permit the applicant to which
it is issued to engage in business as a distributor at the
place shown in his application. All licenses issued by the
Department under this Act shall be valid for not to exceed
one year after issuance unless sooner revoked, canceled or
suspended as provided in this Act. No license issued under
this Act is transferable or assignable. Such license shall be
conspicuously displayed in the place of business conducted by
the licensee in Illinois under such license.
Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to
the person requesting the hearing of the time and place fixed
for the hearing and shall hold a hearing in conformity with
the provisions of this Act and then issue its final
administrative decision in the matter to that person. In the
absence of a protest and request for a hearing within 20
days, the Department's decision shall become final without
any further determination being made or notice given.
(Source: P.A. 91-901, eff. 1-1-01.)
(35 ILCS 130/5) (from Ch. 120, par. 453.5)
Sec. 5. Printing tax stamps. The Department shall adopt
the design or designs of the tax stamps or alternative tax
indicia and shall procure the printing of such stamps or
alternative tax indicia in such amounts and denominations as
it deems necessary to provide for the affixation of the
proper amount of tax stamps or alternative tax indicia to
each original package of cigarettes.
(Source: Laws 1943, vol. 1, p. 1063.)
(35 ILCS 130/9) (from Ch. 120, par. 453.9)
Sec. 9. Returns; remittance. Every distributor who is
required to procure a license under this Act, but who is not
a manufacturer of cigarettes in original packages which are
contained in a sealed transparent wrapper, shall, on or
before the 15th day of each calendar month, file a return
with the Department, showing the quantity of cigarettes
manufactured during the preceding calendar month, the
quantity of cigarettes brought into this State or caused to
be brought into this State from outside this State during the
preceding calendar month without authorized evidence on the
original packages of such cigarettes underneath the sealed
transparent wrapper thereof that the tax liability imposed by
this Act has been assumed by the out-of-State seller of such
cigarettes, the quantity of cigarettes purchased tax-paid
during the preceding calendar month either within or outside
this State, and the quantity of cigarettes sold or otherwise
disposed of during the preceding calendar month. Such return
shall be filed upon forms furnished and prescribed by the
Department and shall contain such other information as the
Department may reasonably require. The Department may
promulgate rules to require that the distributor's return be
accompanied by appropriate computer-generated magnetic media
supporting schedule data in the format required by the
Department, unless, as provided by rule, the Department
grants an exception upon petition of a distributor.
Illinois manufacturers of cigarettes in original packages
which are contained inside a sealed transparent wrapper shall
file a return by the 5th day of each month covering the
preceding calendar month. Each such return shall be
accompanied by the appropriate remittance for tax as provided
in the last paragraph of Section 3 of this Act. Each such
return shall show the quantity of such cigarettes
manufactured during the period covered by the return, the
quantity of cigarettes sold or otherwise disposed of during
the period covered by the return and such other information
as the Department may lawfully require. Such returns shall be
filed on forms prescribed and furnished by the Department.
Each such return shall be accompanied by a copy of each
invoice rendered by such manufacturer to any purchaser to
whom such manufacturer delivered cigarettes (or caused
cigarettes to be delivered) during the period covered by the
return. The Department may promulgate rules to require that
the manufacturer's return be accompanied by appropriate
computer-generated magnetic media supporting schedule data in
the format required by the Department, unless, as provided by
rule, the Department grants an exception upon petition of a
manufacturer.
(Source: Laws 1953, p. 255.)
(35 ILCS 130/9a) (from Ch. 120, par. 453.9a)
Sec. 9a. Examination and correction of returns.
(1) As soon as practicable after any return is filed,
the Department shall examine such return and shall correct
such return according to its best judgment and information,
which return so corrected by the Department shall be prima
facie correct and shall be prima facie evidence of the
correctness of the amount of tax due, as shown therein.
Instead of requiring the distributor to file an amended
return, the Department may simply notify the distributor of
the correction or corrections it has made. Proof of such
correction by the Department may be made at any hearing
before the Department or in any legal proceeding by a
reproduced copy of the Department's record relating thereto
in the name of the Department under the certificate of the
Director of Revenue. Such reproduced copy shall, without
further proof, be admitted into evidence before the
Department or in any legal proceeding and shall be prima
facie proof of the correctness of the amount of tax due, as
shown therein. If the Department finds that any amount of tax
is due from the distributor, the Department shall issue the
distributor a notice of tax liability for the amount of tax
claimed by the Department to be due, together with a penalty
in an amount determined in accordance with Sections 3-3, 3-5
and 3-6 of the Uniform Penalty and Interest Act. If, in
administering the provisions of this Act, comparison of a
return or returns of a distributor with the books, records
and inventories of such distributor discloses a deficiency
which cannot be allocated by the Department to a particular
month or months, the Department shall issue the distributor a
notice of tax liability for the amount of tax claimed by the
Department to be due for a given period, but without any
obligation upon the Department to allocate such deficiency to
any particular month or months, together with a penalty in an
amount determined in accordance with Sections 3-3, 3-5 and
3-6 of the Uniform Penalty and Interest Act, under which
circumstances the aforesaid notice of tax liability shall be
prima facie correct and shall be prima facie evidence of the
correctness of the amount of tax due, as shown therein; and
proof of such correctness may be made in accordance with, and
the admissibility of a reproduced copy of such notice of tax
liability shall be governed by, all the provisions of this
Act applicable to corrected returns. If any distributor
filing any return dies or becomes a person under legal
disability at any time before the Department issues its
notice of tax liability, such notice shall be issued to the
administrator, executor or other legal representative, as
such, of such distributor.
(2) If, within 60 20 days after such notice of tax
liability, the distributor or his or her legal representative
files a protest to such notice of tax liability and requests
a hearing thereon, the Department shall give notice to such
distributor or legal representative of the time and place
fixed for such hearing, and shall hold a hearing in
conformity with the provisions of this Act, and pursuant
thereto shall issue a final assessment to such distributor or
legal representative for the amount found to be due as a
result of such hearing. If a protest to the notice of tax
liability and a request for a hearing thereon is not filed
within 60 20 days after such notice of tax liability, such
notice of tax liability shall become final without the
necessity of a final assessment being issued and shall be
deemed to be a final assessment.
(3) In case of failure to pay the tax, or any portion
thereof, or any penalty provided for in this Act, when due,
the Department may bring suit to recover the amount of such
tax, or portion thereof, or penalty; or, if the taxpayer dies
or becomes incompetent, by filing claim therefor against his
estate; provided that no such action with respect to any tax,
or portion thereof, or penalty, shall be instituted more than
2 years after the cause of action accrues, except with the
consent of the person from whom such tax or penalty is due.
After the expiration of the period within which the
person assessed may file an action for judicial review under
the Administrative Review Law without such an action being
filed, a certified copy of the final assessment or revised
final assessment of the Department may be filed with the
Circuit Court of the county in which the taxpayer has his or
her principal place of business, or of Sangamon County in
those cases in which the taxpayer does not have his principal
place of business in this State. The certified copy of the
final assessment or revised final assessment shall be
accompanied by a certification which recites facts that are
sufficient to show that the Department complied with the
jurisdictional requirements of the Law in arriving at its
final assessment or its revised final assessment and that the
taxpayer had his or her opportunity for an administrative
hearing and for judicial review, whether he availed himself
or herself of either or both of these opportunities or not.
If the court is satisfied that the Department complied with
the jurisdictional requirements of the Law in arriving at its
final assessment or its revised final assessment and that the
taxpayer had his or her opportunity for an administrative
hearing and for judicial review, whether he or she availed
himself or herself of either or both of these opportunities
or not, the court shall enter judgment in favor of the
Department and against the taxpayer for the amount shown to
be due by the final assessment or the revised final
assessment, and such judgment shall be filed of record in the
court. Such judgment shall bear the rate of interest set in
the Uniform Penalty and Interest Act, but otherwise shall
have the same effect as other judgments. The judgment may be
enforced, and all laws applicable to sales for the
enforcement of a judgment shall be applicable to sales made
under such judgments. The Department shall file the certified
copy of its assessment, as herein provided, with the Circuit
Court within 2 years after such assessment becomes final
except when the taxpayer consents in writing to an extension
of such filing period.
If, when the cause of action for a proceeding in court
accrues against a person, he or she is out of the State, the
action may be commenced within the times herein limited,
after his or her coming into or return to the State; and if,
after the cause of action accrues, he or she departs from and
remains out of the State, the time of his or her absence is
no part of the time limited for the commencement of the
action; but the foregoing provisions concerning absence from
the State shall not apply to any case in which, at the time
the cause of action accrues, the party against whom the cause
of action accrues is not a resident of this State. The time
within which a court action is to be commenced by the
Department hereunder shall not run while the taxpayer is a
debtor in any proceeding under the Federal Bankruptcy Act nor
thereafter until 90 days after the Department is notified by
such debtor of being discharged in bankruptcy.
No claim shall be filed against the estate of any
deceased person or a person under legal disability for any
tax or penalty or part of either except in the manner
prescribed and within the time limited by the Probate Act of
1975, as amended.
The remedies provided for herein shall not be exclusive,
but all remedies available to creditors for the collection of
debts shall be available for the collection of any tax or
penalty due hereunder.
The collection of tax or penalty by any means provided
for herein shall not be a bar to any prosecution under this
Act.
The certificate of the Director of the Department to the
effect that a tax or amount required to be paid by this Act
has not been paid, that a return has not been filed, or that
information has not been supplied pursuant to the provisions
of this Act, shall be prima facie evidence thereof.
All of the provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f,
5g, 5i and 5j of the Retailers' Occupation Tax Act, which are
not inconsistent with this Act, and Section 3-7 of the
Uniform Penalty and Interest Act shall apply, as far as
practicable, to the subject matter of this Act to the same
extent as if such provisions were included herein. References
in such incorporated Sections of the "Retailers' Occupation
Tax Act" to retailers, to sellers or to persons engaged in
the business of selling tangible personal property shall mean
distributors when used in this Act.
(Source: P.A. 87-205.)
(35 ILCS 130/9b) (from Ch. 120, par. 453.9b)
Sec. 9b. Failure to file return; penalty; protest. In
case any person who is required to file a return under this
Act fails to file such return, the Department shall determine
the amount of tax due from him according to its best judgment
and information, which amount so fixed by the Department
shall be prima facie correct and shall be prima facie
evidence of the correctness of the amount of tax due, as
shown in such determination. Proof of such determination by
the Department may be made at any hearing before the
Department or in any legal proceeding by a reproduced copy of
the Department's record relating thereto in the name of the
Department under the certificate of the Director of Revenue.
Such reproduced copy shall, without further proof, be
admitted into evidence before the Department or in any legal
proceeding and shall be prima facie proof of the correctness
of the amount of tax due, as shown therein. The Department
shall issue such person a notice of tax liability for the
amount of tax claimed by the Department to be due, together
with a penalty in an amount determined in accordance with
Sections 3-3, 3-5 and 3-6 of the Uniform Penalty and Interest
Act. If such person or the legal representative of such
person, within 60 20 days after such notice, files a protest
to such notice of tax liability and requests a hearing
thereon, the Department shall give notice to such person or
the legal representative of such person of the time and place
fixed for such hearing and shall hold a hearing in conformity
with the provisions of this Act, and pursuant thereto shall
issue a final assessment to such person or to the legal
representative of such person for the amount found to be due
as a result of such hearing. If a protest to the notice of
tax liability and a request for a hearing thereon is not
filed within 60 20 days after such notice of tax liability,
such notice of tax liability shall become final without the
necessity of a final assessment being issued and shall be
deemed to be a final assessment.
(Source: P.A. 87-205.)
(35 ILCS 130/18c new)
Sec. 18c. Possession of not less than 10 and not more
than 100 original packages not tax stamped or improperly tax
stamped; penalty. With the exception of licensed
distributors, anyone possessing not less than 10 and not more
than 100 packages of cigarettes contained in original
packages that are not tax stamped as required by this Act, or
that are improperly tax stamped, is liable to pay to the
Department, for deposit into the Tax Compliance and
Administration Fund, a penalty of $10 for each such package
of cigarettes, unless reasonable cause can be established by
the person upon whom the penalty is imposed. Reasonable
cause shall be determined in each situation in accordance
with rules adopted by the Department.
(35 ILCS 130/24) (from Ch. 120, par. 453.24)
Sec. 24. Punishment for sale or possession of unstamped
packages.
(a) Any person other than a licensed distributor who
sells, offers for sale, or has in his possession with intent
to sell or offer for sale, more than 100 an original packages
package, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, shall be guilty of a Class 4
felony.
(a-5) Any person other than a licensed distributor who
sells, offers for sale, or has in his possession with intent
to sell or offer for sale, 100 or fewer original packages,
not tax stamped or tax imprinted underneath the sealed
transparent wrapper of the original package in accordance
with this Act, is guilty of a Class A misdemeanor for the
first offense and a Class 4 felony for each subsequent
offense.
(b) Any distributor who sells an original package of
cigarettes, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, except when the sale is made under
such circumstances that the tax imposed by this Act may not
legally be levied because of the Constitution or laws of the
United States, shall be guilty of a Class 3 felony.
(Source: P.A. 83-1528.)
Section 10. The Cigarette Use Tax Act is amended by
changing Sections 3, 4, 11, 12, 13, 13a, and 30 and by adding
Section 25b as follows:
(35 ILCS 135/3) (from Ch. 120, par. 453.33)
Sec. 3. Stamp payment. The tax hereby imposed shall be
collected by a distributor maintaining a place of business in
this State or a distributor authorized by the Department
pursuant to Section 7 hereof to collect the tax, and the
amount of the tax shall be added to the price of the
cigarettes sold by such distributor. Collection of the tax
shall be evidenced by a stamp or stamps affixed to each
original package of cigarettes or by an authorized substitute
for such stamp imprinted on each original package of such
cigarettes underneath the sealed transparent outside wrapper
of such original package, except as hereinafter provided.
Each distributor who is required or authorized to collect the
tax herein imposed, before delivering or causing to be
delivered any original packages of cigarettes in this State
to any purchaser, shall firmly affix a proper stamp or stamps
to each such package, or (in the case of manufacturers of
cigarettes in original packages which are contained inside a
sealed transparent wrapper) shall imprint the required
language on the original package of cigarettes beneath such
outside wrapper as hereinafter provided. Such stamp or stamps
need not be affixed to the original package of any cigarettes
with respect to which the distributor is required to affix a
like stamp or stamps by virtue of the Cigarette Tax Act,
however, and no tax imprint need be placed underneath the
sealed transparent wrapper of an original package of
cigarettes with respect to which the distributor is required
or authorized to employ a like tax imprint by virtue of the
Cigarette Tax Act.
No stamp or imprint may be affixed to, or made upon, any
package of cigarettes unless that package complies with all
requirements of the federal Cigarette Labeling and
Advertising Act, 15 U.S.C. 1331 and following, for the
placement of labels, warnings, or any other information upon
a package of cigarettes that is sold within the United
States. Under the authority of Section 6, the Department
shall revoke the license of any distributor that is
determined to have violated this paragraph. A person may not
affix a stamp on a package of cigarettes, cigarette papers,
wrappers, or tubes if that individual package has been marked
for export outside the United States with a label or notice
in compliance with Section 290.185 of Title 27 of the Code of
Federal Regulations. It is not a defense to a proceeding for
violation of this paragraph that the label or notice has been
removed, mutilated, obliterated, or altered in any manner.
Stamps, when required hereunder, shall be purchased from
the Department, or any person authorized by the Department,
by distributors. The Department may refuse to sell stamps to
any person who does not comply with the provisions of this
Act.
Prior to December 1, 1985, the Department shall allow a
distributor 21 days in which to make final payment of the
amount to be paid for such stamps, by allowing the
distributor to make payment for the stamps at the time of
purchasing them with a draft which shall be in such form as
the Department prescribes, and which shall be payable within
21 days thereafter: Provided that such distributor has filed
with the Department, and has received the Department's
approval of, a bond, which is in addition to the bond
required under Section 4 of this Act, payable to the
Department in an amount equal to 80% of such distributor's
average monthly tax liability to the Department under this
Act during the preceding calendar year or $500,000, whichever
is less. The bond shall be joint and several and shall be in
the form of a surety company bond in such form as the
Department prescribes, or it may be in the form of a bank
certificate of deposit or bank letter of credit. The bond
shall be conditioned upon the distributor's payment of the
amount of any 21-day draft which the Department accepts from
that distributor for the delivery of stamps to that
distributor under this Act. The distributor's failure to pay
any such draft, when due, shall also make such distributor
automatically liable to the Department for a penalty equal to
25% of the amount of such draft.
On and after December 1, 1985, the Department shall allow
a distributor 30 days in which to make final payment of the
amount to be paid for such stamps, by allowing the
distributor to make payment for the stamps at the time of
purchasing them with a draft which shall be in such form as
the Department prescribes, and which shall be payable within
30 days thereafter, and beginning on January 1, 2003 and
thereafter, the draft shall be payable by means of electronic
funds transfer: Provided that such distributor has filed
with the Department, and has received the Department's
approval of, a bond, which is in addition to the bond
required under Section 4 of this Act, payable to the
Department in an amount equal to 150% of such distributor's
average monthly tax liability to the Department under this
Act during the preceding calendar year or $750,000, whichever
is less, except that as to bonds filed on or after January 1,
1987, such additional bond shall be in an amount equal to
100% of such distributor's average monthly tax liability
under this Act during the preceding calendar year or
$750,000, whichever is less. The bond shall be joint and
several and shall be in the form of a surety company bond in
such form as the Department prescribes, or it may be in the
form of a bank certificate of deposit or bank letter of
credit. The bond shall be conditioned upon the distributor's
payment of the amount of any 30-day draft which the
Department accepts from that distributor for the delivery of
stamps to that distributor under this Act. The distributor's
failure to pay any such draft, when due, shall also make such
distributor automatically liable to the Department for a
penalty equal to 25% of the amount of such draft.
Every prior continuous compliance taxpayer shall be
exempt from all requirements under this Section concerning
the furnishing of such bond, as defined in this Section, as a
condition precedent to his being authorized to engage in the
business licensed under this Act. This exemption shall
continue for each such taxpayer until such time as he may be
determined by the Department to be delinquent in the filing
of any returns, or is determined by the Department (either
through the Department's issuance of a final assessment which
has become final under the Act, or by the taxpayer's filing
of a return which admits tax to be due that is not paid) to
be delinquent or deficient in the paying of any tax under
this Act, at which time that taxpayer shall become subject to
the bond requirements of this Section and, as a condition of
being allowed to continue to engage in the business licensed
under this Act, shall be required to furnish bond to the
Department in such form as provided in this Section. Such
taxpayer shall furnish such bond for a period of 2 years,
after which, if the taxpayer has not been delinquent in the
filing of any returns, or delinquent or deficient in the
paying of any tax under this Act, the Department may
reinstate such person as a prior continuance compliance
taxpayer. Any taxpayer who fails to pay an admitted or
established liability under this Act may also be required to
post bond or other acceptable security with the Department
guaranteeing the payment of such admitted or established
liability.
Any person aggrieved by any decision of the Department
under this Section may, within the time allowed by law,
protest and request a hearing, whereupon the Department shall
give notice and shall hold a hearing in conformity with the
provisions of this Act and then issue its final
administrative decision in the matter to such person. In the
absence of such a protest filed within the time allowed by
law, the Department's decision shall become final without any
further determination being made or notice given.
The Department shall discharge any surety and shall
release and return any bond or security deposited, assigned,
pledged, or otherwise provided to it by a taxpayer under this
Section within 30 days after:
(1) Such Taxpayer becomes a prior continuous compliance
taxpayer; or
(2) Such taxpayer has ceased to collect receipts on
which he is required to remit tax to the Department, has
filed a final tax return, and has paid to the Department an
amount sufficient to discharge his remaining tax liability as
determined by the Department under this Act. The Department
shall make a final determination of the taxpayer's
outstanding tax liability as expeditiously as possible after
his final tax return has been filed. If the Department
cannot make such final determination within 45 days after
receiving the final tax return, within such period it shall
so notify the taxpayer, stating its reasons therefor.
At the time of purchasing such stamps from the Department
when purchase is required by this Act, or at the time when
the tax which he has collected is remitted by a distributor
to the Department without the purchase of stamps from the
Department when that method of remitting the tax that has
been collected is required or authorized by this Act, the
distributor shall be allowed a discount during any year
commencing July 1 and ending the following June 30 in
accordance with the schedule set out hereinbelow, from the
amount to be paid by him to the Department for such stamps,
or to be paid by him to the Department on the basis of
monthly remittances (as the case may be), to cover the cost,
to such distributor, of collecting the tax herein imposed by
affixing such stamps to the original packages of cigarettes
sold by such distributor or by placing tax imprints
underneath the sealed transparent wrapper of original
packages of cigarettes sold by such distributor (as the case
may be): (1) Prior to December 1, 1985, a discount equal to
1-2/3% of the amount of the tax up to and including the first
$700,000 paid hereunder by such distributor to the Department
during any such year; 1-1/3% of the next $700,000 of tax or
any part thereof, paid hereunder by such distributor to the
Department during any such year; 1% of the next $700,000 of
tax, or any part thereof, paid hereunder by such distributor
to the Department during any such year; and 2/3 of 1% of the
amount of any additional tax paid hereunder by such
distributor to the Department during any such year or (2) On
and after December 1, 1985, a discount equal to 1.75% of the
amount of the tax payable under this Act up to and including
the first $3,000,000 paid hereunder by such distributor to
the Department during any such year and 1.5% of the amount of
any additional tax paid hereunder by such distributor to the
Department during any such year.
Two or more distributors that use a common means of
affixing revenue tax stamps or that are owned or controlled
by the same interests shall be treated as a single
distributor for the purpose of computing the discount.
Cigarette manufacturers who are distributors under this
Act, and who place their cigarettes in original packages
which are contained inside a sealed transparent wrapper,
shall be required to remit the tax which they are required to
collect under this Act to the Department by remitting the
amount thereof to the Department by the 5th day of each
month, covering cigarettes shipped or otherwise delivered to
points in Illinois to purchasers during the preceding
calendar month, but a distributor need not remit to the
Department the tax so collected by him from purchasers under
this Act to the extent to which such distributor is required
to remit the tax imposed by the Cigarette Tax Act to the
Department with respect to the same cigarettes. All taxes
upon cigarettes under this Act are a direct tax upon the
retail consumer and shall conclusively be presumed to be
precollected for the purpose of convenience and facility
only. Distributors who are manufacturers of cigarettes in
original packages which are contained inside a sealed
transparent wrapper, before delivering such cigarettes or
causing such cigarettes to be delivered in this State to
purchasers, shall evidence their obligation to collect and
remit the tax due with respect to such cigarettes by
imprinting language to be prescribed by the Department on
each original package of such cigarettes underneath the
sealed transparent outside wrapper of such original package,
in such place thereon and in such manner as the Department
may prescribe; provided (as stated hereinbefore) that this
requirement does not apply when such distributor is required
or authorized by the Cigarette Tax Act to place the tax
imprint provided for in the last paragraph of Section 3 of
that Act underneath the sealed transparent wrapper of such
original package of cigarettes. Such imprinted language shall
acknowledge the manufacturer's collection and payment of or
liability for the tax imposed by this Act with respect to
such cigarettes.
The Department shall adopt the design or designs of the
tax stamps and shall procure the printing of such stamps in
such amounts and denominations as it deems necessary to
provide for the affixation of the proper amount of tax stamps
to each original package of cigarettes.
Where tax stamps are required, the Department may
authorize distributors to affix revenue tax stamps by
imprinting tax meter stamps upon original packages of
cigarettes. The Department shall adopt rules and regulations
relating to the imprinting of such tax meter stamps as will
result in payment of the proper taxes as herein imposed. No
distributor may affix revenue tax stamps to original packages
of cigarettes by imprinting meter stamps thereon unless such
distributor has first obtained permission from the Department
to employ this method of affixation. The Department shall
regulate the use of tax meters and may, to assure the proper
collection of the taxes imposed by this Act, revoke or
suspend the privilege, theretofore granted by the Department
to any distributor, to imprint tax meter stamps upon original
packages of cigarettes.
The tax hereby imposed and not paid pursuant to this
Section shall be paid to the Department directly by any
person using such cigarettes within this State, pursuant to
Section 12 hereof.
(Source: P.A. 91-246, eff. 7-22-99.)
(35 ILCS 135/4) (from Ch. 120, par. 453.34)
Sec. 4. Distributor's license. A distributor maintaining
a place of business in this State, if required to procure a
license or allowed to obtain a permit as a distributor under
the Cigarette Tax Act, need not obtain an additional license
or permit under this Act, but shall be deemed to be
sufficiently licensed or registered by virtue of his being
licensed or registered under the Cigarette Tax Act.
Every distributor maintaining a place of business in this
State, if not required to procure a license or allowed to
obtain a permit as a distributor under the Cigarette Tax Act,
shall make a verified application to the Department (upon a
form prescribed and furnished by the Department) for a
license to act as a distributor under this Act. In completing
such application, the applicant shall furnish such
information as the Department may reasonably require.
The annual license fee payable to the Department for each
distributor's license shall be $250. The purpose of such
annual license fee is to defray the cost, to the Department,
of coding, serializing or coding and serializing cigarette
tax stamps. The applicant for license shall pay such fee to
the Department at the time of submitting the application for
license to the Department.
Such applicant shall file, with his application, a joint
and several bond. Such bond shall be executed to the
Department of Revenue, with good and sufficient surety or
sureties residing or licensed to do business within the State
of Illinois, in the amount of $2,500, conditioned upon the
true and faithful compliance by the licensee with all of the
provisions of this Act. Such bond, or a reissue thereof, or a
substitute therefor, shall be kept in effect during the
entire period covered by the license. A separate application
for license shall be made, a separate annual license fee
paid, and a separate bond filed, for each place of business
at or from which the applicant proposes to act as a
distributor under this Act and for which the applicant is not
required to procure a license or allowed to obtain a permit
as a distributor under the Cigarette Tax Act.
The following are ineligible to receive a distributor's
license under this Act:
(1) a person who is not of good character and
reputation in the community in which he resides;
(2) a person who has been convicted of a felony
under any Federal or State law, if the Department, after
investigation and a hearing, if requested by the
applicant, determines that such person has not been
sufficiently rehabilitated to warrant the public trust;
(3) a corporation, if any officer, manager or
director thereof, or any stockholder or stockholders
owning in the aggregate more than 5% of the stock of such
corporation, would not be eligible to receive a license
hereunder for any reason.
Upon approval of such application and bond and payment of
the required annual license fee, the Department shall issue a
license to the applicant. Such license shall permit the
applicant to engage in business as a distributor at or from
the place shown in his application. All licenses issued by
the Department under this Act shall be valid for not to
exceed one year after issuance unless sooner revoked,
canceled or suspended as in this Act provided. No license
issued under this Act is transferable or assignable. Such
license shall be conspicuously displayed at the place of
business for which it is issued.
Any person aggrieved by any decision of the Department
under this Section may, within 20 days after notice of the
decision, protest and request a hearing. Upon receiving a
request for a hearing, the Department shall give notice to
the person requesting the hearing of the time and place fixed
for the hearing and shall hold a hearing in conformity with
the provisions of this Act and then issue its final
administrative decision in the matter to that person. In the
absence of a protest and request for a hearing within 20
days, the Department's decision shall become final without
any further determination being made or notice given.
(Source: P.A. 91-901, eff. 1-1-01.)
(35 ILCS 135/11) (from Ch. 120, par. 453.41)
Sec. 11. Return by distributor or manufacturer. Every
distributor, who is required or authorized to collect tax
under this Act, but who is not a manufacturer of cigarettes
in original packages which are contained in a sealed
transparent wrapper, shall, on or before the 15th day of each
calendar month, file a return with the Department, showing
such information as the Department may reasonably require.
The Department may promulgate rules to require that the
distributor's return be accompanied by appropriate
computer-generated magnetic media supporting schedule data in
the format required by the Department, unless, as provided by
rule, the Department grants an exception upon petition of a
distributor.
Illinois manufacturers of cigarettes in original packages
which are contained inside a sealed transparent wrapper shall
file a return by the 5th day of each month covering the
preceding calendar month. Each such return shall be
accompanied by the appropriate remittance for tax as provided
in Section 3 of this Act. Each such return shall disclose
such information as the Department may lawfully require. Each
such return shall be accompanied by a copy of each invoice
rendered by such manufacturer to any purchaser to whom such
manufacturer delivered cigarettes (or caused cigarettes to be
delivered) during the period covered by the return. The
Department may promulgate rules to require that the
manufacturer's return be accompanied by appropriate
computer-generated magnetic media supporting schedule data in
the format required by the Department, unless, as provided by
rule, the Department grants an exception upon petition of a
manufacturer.
No distributor shall be required to return information to
the extent to which the reporting of such information would
be a duplication of such distributor's reporting of
information in any return which he is required to file with
the Department under the Cigarette Tax Act. Returns shall be
filed on forms prescribed by the Department.
(Source: Laws 1953, p. 265.)
(35 ILCS 135/12) (from Ch. 120, par. 453.42)
Sec. 12. Declaration of possession of cigarettes on
which tax not paid.
(a) When cigarettes are acquired for use in this State
by a person (including a distributor as well as any other
person), who did not pay the tax herein imposed to a
distributor, the such person, within 30 3 days after
acquiring the such cigarettes, shall file with the Department
a return declaring the possession of the such cigarettes and
shall transmit with the return to the Department the tax
imposed by this Act.
(b) On receipt of the return and payment of the tax as
required by paragraph (a), the Department may shall issue a
receipt to the person paying the tax and shall furnish the
such person with a suitable tax stamp to be affixed to the
package of cigarettes upon which the tax has been paid if the
Department determines that the cigarettes still exist.
(c) The return and receipt referred to in paragraph
paragraphs (a) and (b) shall contain the name and address of
the person possessing the cigarettes involved, the location
of the such cigarettes and the quantity, brand name, place,
and date of the acquisition of the such cigarettes.
(Source: Laws 1957, p. 1196.)
(35 ILCS 135/13) (from Ch. 120, par. 453.43)
Sec. 13. Examination and correction of return. As soon
as practicable after any return is filed, the Department
shall examine such return and shall correct such return
according to its best judgment and information, which return
so corrected by the Department shall be prima facie correct
and shall be prima facie evidence of the correctness of the
amount of tax due, as shown therein. Proof of such correction
by the Department may be made at any hearing before the
Department or in any legal proceeding by a reproduced copy of
the Department's record relating thereto in the name of the
Department under the certificate of the Director of Revenue.
Such reproduced copy shall, without further proof, be
admitted into evidence before the Department or in any legal
proceeding and shall be prima facie proof of the correctness
of the amount of tax due, as shown therein. If the tax as
fixed by the Department is greater than the amount of the tax
due under the return as filed, the Department shall issue the
person filing such return a notice of tax liability for the
amount of tax claimed by the Department to be due, together
with a penalty in an amount determined in accordance with
Sections 3-3, 3-5 and 3-6 of the Uniform Penalty and Interest
Act. If, in administering the provisions of this Act,
comparison of a return or returns of a distributor with the
books, records and inventories of such distributor discloses
a deficiency which cannot be allocated by the Department to a
particular month or months, the Department shall issue the
distributor a notice of tax liability for the amount of tax
claimed by the Department to be due for a given period, but
without any obligation upon the Department to allocate such
deficiency to any particular month or months, together with a
penalty in an amount determined in accordance with Sections
3-3, 3-5 and 3-6 of the Uniform Penalty and Interest Act,
under which circumstances the aforesaid notice of tax
liability shall be prima facie correct and shall be prima
facie evidence of the correctness of the amount of tax due,
as shown therein; and proof of such correctness may be made
in accordance with, and the admissibility of a reproduced
copy of such notice of tax liability shall be governed by,
all the provisions of this Act applicable to corrected
returns.
If any person filing any return dies or becomes a person
under legal disability at any time before the Department
issues its notice of tax liability, such notice shall be
issued to the administrator, executor or other legal
representative, as such, of such person.
If within 60 20 days after such notice of tax liability,
the person to whom such notice is issued or his legal
representative files a protest to such notice of tax
liability and requests a hearing thereon, the Department
shall give notice to such person or legal representative of
the time and place fixed for such hearing, and shall hold a
hearing in conformity with the provisions of this Act, and
pursuant thereto shall issue a final assessment to such
person or legal representative for the amount found to be due
as a result of such hearing. If a protest to the notice of
tax liability and a request for a hearing thereon is not
filed within 60 20 days after such notice of tax liability,
such notice of tax liability shall become final without the
necessity of a final assessment being issued and shall be
deemed to be a final assessment.
(Source: P.A. 87-205.)
(35 ILCS 135/13a) (from Ch. 120, par. 453.43a)
Sec. 13a. Failure to file return. In case any person who
is required to file a return under this Act fails to file
such return, the Department shall determine the amount of tax
due from him according to its best judgment and information,
which amount so fixed by the Department shall be prima facie
correct and shall be prima facie evidence of the correctness
of the amount of tax due, as shown in such determination.
Proof of such determination by the Department may be made at
any hearing before the Department or in any legal proceeding
by a reproduced copy of the Department's record relating
thereto in the name of the Department under the certificate
of the Director of Revenue. Such reproduced copy shall,
without further proof, be admitted into evidence before the
Department or in any legal proceeding and shall be prima
facie proof of the correctness of the amount of tax due, as
shown therein. The Department shall issue such person a
notice of tax liability for the amount of tax claimed by the
Department to be due, together with a penalty in an amount
determined in accordance with Sections 3-3, 3-5 and 3-6 of
the Uniform Penalty and Interest Act. If such person or the
legal representative of such person, within 60 20 days after
such notice, files a protest to such notice of tax liability
and requests a hearing thereon, the Department shall give
notice to such person or the legal representative of such
person of the time and place fixed for such hearing, and
shall hold a hearing in conformity with the provisions of
this Act, and pursuant thereto shall issue a final assessment
to such person or to the legal representative of such person
for the amount found to be due as a result of such hearing.
If a protest to the notice of tax liability and a request for
a hearing thereon is not filed within 60 20 days after such
notice of tax liability, such notice of tax liability shall
become final without the necessity of a final assessment
being issued and shall be deemed to be a final assessment.
(Source: P.A. 87-205.)
(35 ILCS 135/25b new)
Sec. 25b. Possession of not less than 10 and not more
than 100 original packages not tax stamped or improperly tax
stamped; penalty. With the exception of licensed
distributors, anyone possessing not less than 10 and not more
than 100 packages of cigarettes contained in original
packages that are not tax stamped as required by this Act, or
that are improperly tax stamped, is liable to pay to the
Department, for deposit into the Tax Compliance and
Administration Fund, a penalty of $10 for each such package
of cigarettes, unless reasonable cause can be established by
the person upon whom the penalty is imposed. Reasonable
cause shall be determined in each situation in accordance
with rules adopted by the Department.
(35 ILCS 135/30) (from Ch. 120, par. 453.60)
Sec. 30. Punishment for sale or possession of unstamped
packages. Any person other than a licensed distributor who
sells, offers for sale, or has in his possession with intent
to sell or offer for sale, more than 100 an original packages
package, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, shall be guilty of a Class 4
felony.
Any person other than a licensed distributor who sells,
offers for sale, or has in his possession with intent to sell
or offer for sale, 100 or fewer original packages, not tax
stamped or tax imprinted underneath the sealed transparent
wrapper of the original package in accordance with this Act,
is guilty of a Class A misdemeanor for the first offense and
a Class 4 felony for each subsequent offense.
Any distributor who sells an original package of
cigarettes, not tax stamped or tax imprinted underneath the
sealed transparent wrapper of such original package in
accordance with this Act, except when the sale is made under
such circumstances that the tax imposed by this Act may not
legally be levied because of the Constitution or laws of the
United States, shall be guilty of a Class 3 felony.
(Source: P.A. 83-1528.)
Section 99. Effective date. This Act takes effect on
January 1, 2002.
INDEX
Statutes amended in order of appearance
35 ILCS 130/3 from Ch. 120, par. 453.3
35 ILCS 130/4 from Ch. 120, par. 453.4
35 ILCS 130/5 from Ch. 120, par. 453.5
35 ILCS 130/9 from Ch. 120, par. 453.9
35 ILCS 130/9a from Ch. 120, par. 453.9a
35 ILCS 130/9b from Ch. 120, par. 453.9b
35 ILCS 130/18c new
35 ILCS 130/24 from Ch. 120, par. 453.24
35 ILCS 135/3 from Ch. 120, par. 453.33
35 ILCS 135/4 from Ch. 120, par. 453.34
35 ILCS 135/11 from Ch. 120, par. 453.41
35 ILCS 135/12 from Ch. 120, par. 453.42
35 ILCS 135/13 from Ch. 120, par. 453.43
35 ILCS 135/13a from Ch. 120, par. 453.43a
35 ILCS 135/25b new
35 ILCS 135/30 from Ch. 120, par. 453.60
Passed in the General Assembly May 16, 2001.
Approved August 09, 2001.
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