Bill Text: IL HB1731 | 2011-2012 | 97th General Assembly | Amended

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Bill Title: Amends the Tobacco Products Tax Act of 1995. Defines "little cigar". Provides that little cigars shall be taxed at a rate per little cigar that is equal to the total taxes imposed per cigarette under the Cigarette Tax Act. Provides that a distributor shall file a monthly return that discloses the quantity of little cigars sold or otherwise disposed of.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB1731 Detail]

Download: Illinois-2011-HB1731-Amended.html

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Rep. Karen A. Yarbrough

Filed: 3/3/2011

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AMENDMENT TO HOUSE BILL 1731
AMENDMENT NO. ______. Amend House Bill 1731 by replacing
everything after the enacting clause with the following:
"Section 5. The Cigarette Tax Act is amended by changing
Section 1 as follows:
(35 ILCS 130/1) (from Ch. 120, par. 453.1)
Sec. 1. For the purposes of this Act:
"Brand Style" means a variety of cigarettes distinguished
by the tobacco used, tar and nicotine content, flavoring used,
size of the cigarette, filtration on the cigarette or
packaging.
"Cigarette", means any roll for smoking made wholly or in
part of tobacco irrespective of size or shape and whether or
not such tobacco is flavored, adulterated or mixed with any
other ingredient, and the wrapper or cover of which is made of
paper or any other substance or material except tobacco.

09700HB1731ham001 - 2 - LRB097 10208 HLH 51916 a
"Cigarette" also includes little cigars.
"Little cigar" means any roll for smoking, made wholly or
in part of tobacco, if such product uses an integrated
cellulose acetate or other similar filter and is wrapped in any
substance containing tobacco, other than natural leaf tobacco.
"Contraband cigarettes" means:
(a) cigarettes that do not bear a required tax stamp
under this Act;
(b) cigarettes for which any required federal taxes
have not been paid;
(c) cigarettes that bear a counterfeit tax stamp;
(d) cigarettes that are manufactured, fabricated,
assembled, processed, packaged, or labeled by any person
other than (i) the owner of the trademark rights in the
cigarette brand or (ii) a person that is directly or
indirectly authorized by such owner;
(e) cigarettes imported into the United States, or
otherwise distributed, in violation of the federal
Imported Cigarette Compliance Act of 2000 (Title IV of
Public Law 106-476);
(f) cigarettes that have false manufacturing labels;
(g) cigarettes identified in Section 3-10(a)(1) of
this Act; or
(h) cigarettes that are improperly tax stamped,
including cigarettes that bear a tax stamp of another state
or taxing jurisdiction.

09700HB1731ham001 - 3 - LRB097 10208 HLH 51916 a
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, however formed, limited liability
company, or a receiver, executor, administrator, trustee,
guardian or other representative appointed by order of any
court.
"Prior Continuous Compliance Taxpayer" means any person
who is licensed under this Act and who, having been a licensee
for a continuous period of 5 years, is determined by the
Department not to have been either delinquent or deficient in
the payment of tax liability during that period or otherwise in
violation of this Act. Also, any taxpayer who has, as verified
by the Department, continuously complied with the condition of
his bond or other security under provisions of this Act for a
period of 5 consecutive years shall be considered to be a
"Prior continuous compliance taxpayer". In calculating the
consecutive period of time described herein for qualification
as a "prior continuous compliance taxpayer", a consecutive
period of time of qualifying compliance immediately prior to
the effective date of this amendatory Act of 1987 shall be
credited to any licensee who became licensed on or before the
effective date of this amendatory Act of 1987.
"Department" means the Department of Revenue.
"Sale" means any transfer, exchange or barter in any manner
or by any means whatsoever for a consideration, and includes
and means all sales made by any person.

09700HB1731ham001 - 4 - LRB097 10208 HLH 51916 a
"Original Package" means the individual packet, box or
other container whatsoever used to contain and to convey
cigarettes to the consumer.
"Distributor" means any and each of the following:
(1) Any person engaged in the business of selling
cigarettes in this State who brings or causes to be brought
into this State from without this State any original packages
of cigarettes, on which original packages there is no
authorized evidence underneath a sealed transparent wrapper
showing that the tax liability imposed by this Act has been
paid or assumed by the out-of-State seller of such cigarettes,
for sale or other disposition in the course of such business.
(2) Any person who makes, manufactures or fabricates
cigarettes in this State for sale in this State, except a
person who makes, manufactures or fabricates cigarettes as a
part of a correctional industries program for sale to residents
incarcerated in penal institutions or resident patients of a
State-operated mental health facility.
(3) Any person who makes, manufactures or fabricates
cigarettes outside this State, which cigarettes are placed in
original packages contained in sealed transparent wrappers,
for delivery or shipment into this State, and who elects to
qualify and is accepted by the Department as a distributor
under Section 4b of this Act.
"Place of business" shall mean and include any place where
cigarettes are sold or where cigarettes are manufactured,

09700HB1731ham001 - 5 - LRB097 10208 HLH 51916 a
stored or kept for the purpose of sale or consumption,
including any vessel, vehicle, airplane, train or vending
machine.
"Business" means any trade, occupation, activity or
enterprise engaged in for the purpose of selling cigarettes in
this State.
"Retailer" means any person who engages in the making of
transfers of the ownership of, or title to, cigarettes to a
purchaser for use or consumption and not for resale in any
form, for a valuable consideration. "Retailer" does not include
a person:
(1) who transfers to residents incarcerated in penal
institutions or resident patients of a State-operated
mental health facility ownership of cigarettes made,
manufactured, or fabricated as part of a correctional
industries program; or
(2) who transfers cigarettes to a not-for-profit
research institution that conducts tests concerning the
health effects of tobacco products and who does not offer
the cigarettes for resale.
"Retailer" shall be construed to include any person who
engages in the making of transfers of the ownership of, or
title to, cigarettes to a purchaser, for use or consumption by
any other person to whom such purchaser may transfer the
cigarettes without a valuable consideration, except a person
who transfers to residents incarcerated in penal institutions

09700HB1731ham001 - 6 - LRB097 10208 HLH 51916 a
or resident patients of a State-operated mental health facility
ownership of cigarettes made, manufactured or fabricated as
part of a correctional industries program.
"Secondary distributor" means any person engaged in the
business of selling cigarettes who purchases stamped original
packages of cigarettes from a licensed distributor under this
Act or the Cigarette Use Tax Act, sells 75% or more of those
cigarettes to retailers for resale, and maintains an
established business where a substantial stock of cigarettes is
available to retailers for resale.
"Stamp" or "stamps" mean the indicia required to be affixed
on a pack of cigarettes that evidence payment of the tax on
cigarettes under Section 2 of this Act.
"Related party" means any person that is associated with
any other person because he or she:
(a) is an officer or director of a business; or
(b) is legally recognized as a partner in business.
(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)
Section 10. The Cigarette Use Tax Act is amended by
changing Section 1 as follows:
(35 ILCS 135/1) (from Ch. 120, par. 453.31)
Sec. 1. For the purpose of this Act, unless otherwise
required by the context:

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"Use" means the exercise by any person of any right or
power over cigarettes incident to the ownership or possession
thereof, other than the making of a sale thereof in the course
of engaging in a business of selling cigarettes and shall
include the keeping or retention of cigarettes for use, except
that "use" does not include the use of cigarettes by a
not-for-profit research institution conducting tests
concerning the health effects of tobacco products, provided the
cigarettes are not offered for resale.
"Brand Style" means a variety of cigarettes distinguished
by the tobacco used, tar and nicotine content, flavoring used,
size of the cigarette, filtration on the cigarette or
packaging.
"Cigarette" means any roll for smoking made wholly or in
part of tobacco irrespective of size or shape and whether or
not such tobacco is flavored, adulterated or mixed with any
other ingredient, and the wrapper or cover of which is made of
paper or any other substance or material except tobacco.
"Cigarette" also includes little cigars.
"Little cigar" means any roll for smoking, made wholly or
in part of tobacco, if such product uses an integrated
cellulose acetate or other similar filter and is wrapped in any
substance containing tobacco, other than natural leaf tobacco.
"Contraband cigarettes" means:
(a) cigarettes that do not bear a required tax stamp
under this Act;

09700HB1731ham001 - 8 - LRB097 10208 HLH 51916 a
(b) cigarettes for which any required federal taxes
have not been paid;
(c) cigarettes that bear a counterfeit tax stamp;
(d) cigarettes that are manufactured, fabricated,
assembled, processed, packaged, or labeled by any person
other than (i) the owner of the trademark rights in the
cigarette brand or (ii) a person that is directly or
indirectly authorized by such owner;
(e) cigarettes imported into the United States, or
otherwise distributed, in violation of the federal
Imported Cigarette Compliance Act of 2000 (Title IV of
Public Law 106-476);
(f) cigarettes that have false manufacturing labels;
(g) cigarettes identified in Section 3-10(a)(1) of
this Act; or
(h) cigarettes that are improperly tax stamped,
including cigarettes that bear a tax stamp of another state
or taxing jurisdiction.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, however formed, limited liability
company, or a receiver, executor, administrator, trustee,
guardian or other representative appointed by order of any
court.
"Department" means the Department of Revenue.
"Sale" means any transfer, exchange or barter in any manner

09700HB1731ham001 - 9 - LRB097 10208 HLH 51916 a
or by any means whatsoever for a consideration, and includes
and means all sales made by any person.
"Original Package" means the individual packet, box or
other container whatsoever used to contain and to convey
cigarettes to the consumer.
"Distributor" means any and each of the following:
a. Any person engaged in the business of selling
cigarettes in this State who brings or causes to be brought
into this State from without this State any original
packages of cigarettes, on which original packages there is
no authorized evidence underneath a sealed transparent
wrapper showing that the tax liability imposed by this Act
has been paid or assumed by the out-of-State seller of such
cigarettes, for sale in the course of such business.
b. Any person who makes, manufactures or fabricates
cigarettes in this State for sale, except a person who
makes, manufactures or fabricates cigarettes for sale to
residents incarcerated in penal institutions or resident
patients or a State-operated mental health facility.
c. Any person who makes, manufactures or fabricates
cigarettes outside this State, which cigarettes are placed
in original packages contained in sealed transparent
wrappers, for delivery or shipment into this State, and who
elects to qualify and is accepted by the Department as a
distributor under Section 7 of this Act.
"Distributor" does not include any person who transfers

09700HB1731ham001 - 10 - LRB097 10208 HLH 51916 a
cigarettes to a not-for-profit research institution that
conducts tests concerning the health effects of tobacco
products and who does not offer the cigarettes for resale.
"Distributor maintaining a place of business in this
State", or any like term, means any distributor having or
maintaining within this State, directly or by a subsidiary, an
office, distribution house, sales house, warehouse or other
place of business, or any agent operating within this State
under the authority of the distributor or its subsidiary,
irrespective of whether such place of business or agent is
located here permanently or temporarily, or whether such
distributor or subsidiary is licensed to transact business
within this State.
"Business" means any trade, occupation, activity or
enterprise engaged in or conducted in this State for the
purpose of selling cigarettes.
"Prior Continuous Compliance Taxpayer" means any person
who is licensed under this Act and who, having been a licensee
for a continuous period of 5 years, is determined by the
Department not to have been either delinquent or deficient in
the payment of tax liability during that period or otherwise in
violation of this Act. Also, any taxpayer who has, as verified
by the Department, continuously complied with the condition of
his bond or other security under provisions of this Act of a
period of 5 consecutive years shall be considered to be a
"prior continuous compliance taxpayer". In calculating the

09700HB1731ham001 - 11 - LRB097 10208 HLH 51916 a
consecutive period of time described herein for qualification
as a "prior continuous compliance taxpayer", a consecutive
period of time of qualifying compliance immediately prior to
the effective date of this amendatory Act of 1987 shall be
credited to any licensee who became licensed on or before the
effective date of this amendatory Act of 1987.
"Secondary distributor" means any person engaged in the
business of selling cigarettes who purchases stamped original
packages of cigarettes from a licensed distributor under this
Act or the Cigarette Tax Act, sells 75% or more of those
cigarettes to retailers for resale, and maintains an
established business where a substantial stock of cigarettes is
available to retailers for resale.
"Secondary distributor maintaining a place of business in
this State", or any like term, means any secondary distributor
having or maintaining within this State, directly or by a
subsidiary, an office, distribution house, sales house,
warehouse, or other place of business, or any agent operating
within this State under the authority of the secondary
distributor or its subsidiary, irrespective of whether such
place of business or agent is located here permanently or
temporarily, or whether such secondary distributor or
subsidiary is licensed to transact business within this State.
"Stamp" or "stamps" mean the indicia required to be affixed
on a pack of cigarettes that evidence payment of the tax on
cigarettes under Section 2 of this Act.

09700HB1731ham001 - 12 - LRB097 10208 HLH 51916 a
"Related party" means any person that is associated with
any other person because he or she:
(a) is an officer or director of a business; or
(b) is legally recognized as a partner in business.
(Source: P.A. 95-462, eff. 8-27-07; 95-1053, eff. 1-1-10;
96-782, eff. 1-1-10; 96-1027, eff. 7-12-10.)".