Bill Text: IL HB5108 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Tobacco Products Tax Act of 1995. Provides that remote retail sellers that meet certain sales criteria are required to collect and remit the tax under the Act. Provides that, beginning on January 1, 2025, the tax under the Act is 36% of (i) the actual cost paid by a distributor or remote retail seller for the stock keeping unit or (ii) if documentation of the actual cost is not available due to matters beyond the distributor or remote retail seller's control, the actual cost list paid by the distributor or remote retail seller for the stock keeping unit. Effective January 1, 2025.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-05-31 - House Committee Amendment No. 2 Rule 19(c) / Re-referred to Rules Committee [HB5108 Detail]

Download: Illinois-2023-HB5108-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5108 Introduced , by Rep. Robert "Bob" Rita SYNOPSIS AS INTRODUCED:
35 ILCS 143/10-5
35 ILCS 143/10-10
35 ILCS 143/10-24 new
35 ILCS 143/10-25
35 ILCS 143/10-30
35 ILCS 143/10-35
35 ILCS 143/10-37
35 ILCS 143/10-38
35 ILCS 143/10-45
35 ILCS 143/10-50
Amends the Tobacco Products Tax Act of 1995. Provides that remote retail sellers that meet certain sales criteria are required to collect and remit the tax under the Act. Provides that, beginning on January 1, 2025, the tax under the Act is 36% of (i) the actual cost paid by a distributor or remote retail seller for the stock keeping unit or (ii) if documentation of the actual cost is not available due to matters beyond the distributor or remote retail seller's control, the actual cost list paid by the distributor or remote retail seller for the stock keeping unit. Effective January 1, 2025.
LRB103 37757 HLH 67885 b
A BILL FOR
HB5108 LRB103 37757 HLH 67885 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Tobacco Products Tax Act of 1995 is amended
by changing Sections 10-5, 10-10, 10-25, 10-30, 10-35, 10-37,
10-38, 10-45, and 10-50 and by adding Section 10-24 as
follows:
(35 ILCS 143/10-5)
Sec. 10-5. Definitions. For purposes of this Act:
"Actual cost" means the actual price paid for each
individual SKU by a distributor or a remote retail seller.
"Actual cost list" means the average actual price paid by
a distributor or a remote retail seller to a manufacturer,
wholesaler, or distributor for a SKU during the calendar year
immediately preceding the calendar year in which the sale
occurs.
"Business" means any trade, occupation, activity, or
enterprise engaged in, at any location whatsoever, for the
purpose of selling tobacco products.
"Cigar" means any roll of tobacco wrapped in leaf tobacco
or in any substance containing tobacco. "Cigar" does not
include a little cigar or any roll of tobacco that is
classified as a cigarette within the meaning of Section 1 of

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the Cigarette Tax Act.
"Cigarette" has the meaning ascribed to the term in
Section 1 of the Cigarette Tax Act.
"Contraband little cigar" means:
(1) packages of little cigars containing 20 or 25
little cigars that do not bear a required tax stamp under
this Act;
(2) packages of little cigars containing 20 or 25
little cigars that bear a fraudulent, imitation, or
counterfeit tax stamp;
(3) packages of little cigars containing 20 or 25
little cigars that are improperly tax stamped, including
packages of little cigars that bear only a tax stamp of
another state or taxing jurisdiction; or
(4) packages of little cigars containing other than 20
or 25 little cigars in the possession of a distributor,
retailer or wholesaler, unless the distributor, retailer,
or wholesaler possesses, or produces within the time frame
provided in Section 10-27 or 10-28 of this Act, an invoice
from a stamping distributor, distributor, or wholesaler
showing that the tax on the packages has been or will be
paid.
"Consumer" means a person who acquires ownership of
tangible personal property, including tobacco products, for
use or consumption in this State and not for resale.
"Correctional Industries program" means a program run by a

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State penal institution in which residents of the penal
institution produce tobacco products for sale to persons
incarcerated in penal institutions or resident patients of a
State operated mental health facility.
"Department" means the Illinois Department of Revenue.
"Distributor" means any of the following:
(1) Any manufacturer or wholesaler in this State
engaged in the business of selling tobacco products who
sells, exchanges, or distributes tobacco products to
retailers or consumers in this State.
(2) Any manufacturer or wholesaler engaged in the
business of selling tobacco products from without this
State who sells, exchanges, distributes, ships, or
transports tobacco products to retailers or consumers
located in this State, so long as that manufacturer or
wholesaler has or maintains within this State, directly or
by subsidiary, an office, sales house, or other place of
business, or any agent or other representative operating
within this State under the authority of the person or
subsidiary, irrespective of whether the place of business
or agent or other representative is located here
permanently or temporarily.
(3) Any retailer who receives tobacco products on
which the tax has not been or will not be paid by another
distributor.
"Distributor" does not include any person, wherever

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resident or located, who makes, manufactures, or fabricates
tobacco products as part of a Correctional Industries program
for sale to residents incarcerated in penal institutions or
resident patients of a State operated mental health facility.
"Electronic cigarette" means:
(1) any device that employs a battery or other
mechanism to heat a solution or substance to produce a
vapor or aerosol intended for inhalation, except for (A)
any device designed solely for use with cannabis that
contains a statement on the retail packaging that the
device is designed solely for use with cannabis and not
for use with tobacco or (B) any device that contains a
solution or substance that contains cannabis subject to
tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act;
(2) any cartridge or container of a solution or
substance intended to be used with or in the device or to
refill the device, except for any cartridge or container
of a solution or substance that contains cannabis subject
to tax under the Compassionate Use of Medical Cannabis
Program Act or the Cannabis Regulation and Tax Act; or
(3) any solution or substance, whether or not it
contains nicotine, intended for use in the device, except
for any solution or substance that contains cannabis
subject to tax under the Compassionate Use of Medical
Cannabis Program Act or the Cannabis Regulation and Tax

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Act.
The changes made to the definition of "electronic
cigarette" by this amendatory Act of the 102nd General
Assembly apply on and after June 28, 2019, but no claim for
credit or refund is allowed on or after the effective date of
this amendatory Act of the 102nd General Assembly for such
taxes paid during the period beginning June 28, 2019 and the
effective date of this amendatory Act of the 102nd General
Assembly.
"Electronic cigarette" includes, but is not limited to,
any electronic nicotine delivery system, electronic cigar,
electronic cigarillo, electronic pipe, electronic hookah, vape
pen, or similar product or device, and any component or part
that can be used to build the product or device. "Electronic
cigarette" does not include: cigarettes, as defined in Section
1 of the Cigarette Tax Act; any product approved by the United
States Food and Drug Administration for sale as a tobacco
cessation product, a tobacco dependence product, or for other
medical purposes that is marketed and sold solely for that
approved purpose; any asthma inhaler prescribed by a physician
for that condition that is marketed and sold solely for that
approved purpose; or any therapeutic product approved for use
under the Compassionate Use of Medical Cannabis Program Act.
"Little cigar" means and includes any roll, made wholly or
in part of tobacco, where such roll has an integrated
cellulose acetate filter and weighs less than 4 pounds per

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thousand and the wrapper or cover of which is made in whole or
in part of tobacco.
"Manufacturer" means any person, wherever resident or
located, who manufactures and sells tobacco products, except a
person who makes, manufactures, or fabricates tobacco products
as a part of a Correctional Industries program for sale to
persons incarcerated in penal institutions or resident
patients of a State operated mental health facility.
Beginning on January 1, 2013, "moist snuff" means any
finely cut, ground, or powdered tobacco that is not intended
to be smoked, but shall not include any finely cut, ground, or
powdered tobacco that is intended to be placed in the nasal
cavity.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, limited
liability company, or public or private corporation, however
formed, or a receiver, executor, administrator, trustee,
conservator, or other representative appointed by order of any
court.
"Pipe tobacco" means any tobacco that, because of its
appearance, type, packaging, or labeling, is suitable for use
in a pipe and is likely to be offered to or purchased by a
consumer as tobacco to be smoked in a pipe.
"Place of business" means and includes any place where
tobacco products are sold or where tobacco products are
manufactured, stored, or kept for the purpose of sale or

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consumption, including any vessel, vehicle, airplane, train,
or vending machine.
"Remote retail sale" means a sale by a remote retail
seller of cigars or pipe tobacco to a consumer in this State
when:
(1) the buyer submits the order for the sale by means
of a telephone or other method of voice transmission, by
first class mail, or by using the Internet or other online
service, or if the seller is otherwise not in the physical
presence of the buyer when the request for purchase or
order is made; or
(2) the cigars or pipe tobacco are delivered to the
buyer by common carrier, private delivery service, or
other method of remote delivery, or the seller is not in
the physical presence of the buyer when the buyer obtains
possession of the cigars or pipe tobacco.
"Remote retail seller" means a person located outside of
this State who makes remote retail sales of cigars or pipe
tobacco, so long as that person does not maintain within this
State, directly or by a subsidiary, an office, distribution
house, sales house, warehouse, or other place of business, or
any agent or other representative operating within this State
under the authority of the person or its subsidiary,
irrespective of whether the place of business or the agent is
located here permanently or temporarily or whether the person
or subsidiary is licensed to do business in this State.

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"Retailer" means any person in this State engaged in the
business of selling tobacco products to consumers in this
State, regardless of quantity or number of sales.
"Sale" means any transfer, exchange, or barter in any
manner or by any means whatsoever for a consideration and
includes all sales made by persons.
"Stamp" or "stamps" mean the indicia required to be
affixed on a package of little cigars that evidence payment of
the tax on packages of little cigars containing 20 or 25 little
cigars under Section 10-10 of this Act. These stamps shall be
the same stamps used for cigarettes under the Cigarette Tax
Act.
"Stamping distributor" means a distributor licensed under
this Act and also licensed as a distributor under the
Cigarette Tax Act or Cigarette Use Tax Act.
"Stock keeping unit" or "SKU" means the unique identifier
assigned by a manufacturer, distributor, or remote retail
seller to various tobacco products in order to track
inventory.
"Tobacco products" means any cigars, including little
cigars; cheroots; stogies; periques; granulated, plug cut,
crimp cut, ready rubbed, and other smoking tobacco; snuff
(including moist snuff) or snuff flour; cavendish; plug and
twist tobacco; fine-cut and other chewing tobaccos; shorts;
refuse scraps, clippings, cuttings, and sweeping of tobacco;
and other kinds and forms of tobacco, prepared in such manner

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as to be suitable for chewing or smoking in a pipe or
otherwise, or both for chewing and smoking; but does not
include cigarettes as defined in Section 1 of the Cigarette
Tax Act or tobacco purchased for the manufacture of cigarettes
by cigarette distributors and manufacturers defined in the
Cigarette Tax Act and persons who make, manufacture, or
fabricate 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.
Beginning on July 1, 2019, "tobacco products" also
includes electronic cigarettes.
"Wholesale price" means the established list price for
which a manufacturer sells tobacco products to a distributor,
before the allowance of any discount, trade allowance, rebate,
or other reduction. In the absence of such an established list
price, the manufacturer's invoice price at which the
manufacturer sells the tobacco product to unaffiliated
distributors, before any discounts, trade allowances, rebates,
or other reductions, shall be presumed to be the wholesale
price.
"Wholesaler" means any person, wherever resident or
located, engaged in the business of selling tobacco products
to others for the purpose of resale. "Wholesaler", when used
in this Act, does not include a person licensed as a
distributor under Section 10-20 of this Act unless expressly

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stated in this Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-593, eff. 12-4-19;
102-40, eff. 6-25-21.)
(35 ILCS 143/10-10)
Sec. 10-10. Tax imposed.
(a) Except as otherwise provided in this Section with
respect to little cigars, on the first day of the third month
after the month in which this Act becomes law, a tax is imposed
on any person engaged in business as a distributor of tobacco
products, as defined in Section 10-5, at the rate of:
(1) (i) 18% of the wholesale price of tobacco
products sold or otherwise disposed of to retailers or
consumers located in this State prior to July 1, 2012;
(2) and (ii) 36% of the wholesale price of tobacco
products sold or otherwise disposed of to retailers or
consumers located in this State beginning on July 1, 2012
and before January 1, 2025; and
(3) beginning on January 1, 2025, 36% of:
(A) the actual cost paid by a distributor or
remote retail seller for the stock keeping unit sold
or otherwise disposed of to a retailer or consumer in
the State; or
(B) if documentation of the actual cost paid
by a distributor or remote retail seller is not
available due to matters beyond the distributor or

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remote retail seller's control, the actual cost list
paid by a distributor or remote retail seller for the
stock keeping unit sold or otherwise disposed of to
retailers or consumers located in this State for which
documentation is not available. ; except that,
beginning
Notwithstanding the provisions of this subsection (a),
beginning on January 1, 2013, the tax on moist snuff shall be
imposed at a rate of $0.30 per ounce, and a proportionate tax
at the like rate on all fractional parts of an ounce, sold or
otherwise disposed of to retailers or consumers located in
this State. Notwithstanding the provisions of subsection (a),
beginning on ; and except that, beginning July 1, 2019, the tax
on electronic cigarettes shall be imposed at the rate of 15% of
the wholesale price of electronic cigarettes sold or otherwise
disposed of to retailers or consumers located in this State.
The tax imposed under this subsection (a) is in addition
to all other occupation or privilege taxes imposed by the
State of Illinois, by any political subdivision thereof, or by
any municipal corporation. However, the tax is not imposed
upon any activity in that business in interstate commerce or
otherwise, to the extent to which that activity may not, under
the Constitution and Statutes of the United States, be made
the subject of taxation by this State, and except that,
beginning July 1, 2013, the tax on little cigars shall be
imposed at the same rate, and the proceeds shall be

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distributed in the same manner, as the tax imposed on
cigarettes under the Cigarette Tax Act. The tax is also not
imposed on sales made to the United States or any entity
thereof.
If the Department determines that the actual cost list for
a SKU is not indicative of the actual cost paid for the SKU,
then the Department may determine the distributor's or remote
retailer seller's tax liability for the SKU based on the
distributor's or remote retail seller's books and records or
from information on invoices obtained from the distributor's
or remote retail seller's suppliers.
(a-5) Beginning January 1, 2025, the tax imposed under
subsection (a) is also imposed upon persons who are engaged in
business as remote retail sellers of cigars and pipe tobacco
and who make sales to Illinois consumers on which the tax has
not been paid by a distributor, if:
(1) the cumulative gross receipts of the remote
retailer seller from sales of tangible personal property
to consumers in this State are $100,000 or more; or
(2) the remote retail seller enters into 200 or more
separate transactions for the sale of tangible personal
property to consumers in this State.
A remote retail seller that meets or exceeds the threshold
in either paragraph (1) or (2) of this subsection shall be
liable for taxes imposed by this Act on all sales made by that
remote retailer seller of taxable products under this Act to

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Illinois consumers on which the tax has not been paid by a
distributor.
The remote retail seller shall determine on a quarterly
basis, ending on the last day of March, June, September, and
December, whether it meets the criteria of either paragraph
(1) or (2) of this subsection for the preceding 12-month
period. If the remote retail seller meets the criteria of
either paragraph (1) or (2) for a 12-month period, then the
remote retail seller is considered to be engaged in business
as a remote retail seller in this State and is required to
collect and remit the tax imposed under this Act and to file
all applicable returns for the next 12-month period. At the
end of that 12-month period, the remote retail seller shall
determine whether the remote retail seller met the criteria of
either paragraph (1) or (2) for the preceding 12-month period.
If the remote retail seller met the criteria in either
paragraph (1) or (2) for the preceding 12-month period, the
remote retail seller is considered to be engaged in business
as a remote retail seller in this State and is required to
collect and remit the tax imposed under this Act and file
returns for the subsequent year. If, at the end of a one-year
period, a remote retail seller that was required to collect
and remit the tax imposed under this Act determines that the
remote retail seller did not meet the criteria in either
paragraph (1) or (2) during the preceding 12-month period,
then the remote retail seller shall certify to the Department,

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in the form and manner required by the Department, that the
remote retail seller did not meet the criteria in either
paragraph (1) or (2) during the preceding 12-month period and
shall subsequently determine on a quarterly basis, ending on
the last day of March, June, September, and December, whether
the remote retail seller meets the criteria of either
paragraph (1) or (2) for the preceding 12-month period.
(b) Notwithstanding subsection (a) of this Section,
stamping distributors of packages of little cigars containing
20 or 25 little cigars sold or otherwise disposed of in this
State shall remit the tax by purchasing tax stamps from the
Department and affixing them to packages of little cigars in
the same manner as stamps are purchased and affixed to
cigarettes under the Cigarette Tax Act, unless the stamping
distributor sells or otherwise disposes of those packages of
little cigars to another stamping distributor. Only persons
meeting the definition of "stamping distributor" contained in
Section 10-5 of this Act may affix stamps to packages of little
cigars containing 20 or 25 little cigars. Stamping
distributors may not sell or dispose of little cigars at
retail to consumers or users at locations where stamping
distributors affix stamps to packages of little cigars
containing 20 or 25 little cigars.
(c) The impact of the tax levied by this Act is imposed
upon distributors engaged in the business of selling tobacco
products to retailers or consumers in this State. Beginning

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January 1, 2025, the impact of the tax levied by this Act is
also imposed upon remote retail sellers that meet the criteria
in subsection (a-5) of this Section. A remote retail seller
shall pay the tax on all sales of cigars and pipe tobacco to
consumers in this State on which the tax has not been paid by a
distributor. Whenever a stamping distributor brings or causes
to be brought into this State from without this State, or
purchases from without or within this State, any packages of
little cigars containing 20 or 25 little cigars upon which
there are no tax stamps affixed as required by this Act, for
purposes of resale or disposal in this State to a person not a
stamping distributor, then such stamping distributor shall pay
the tax to the Department and add the amount of the tax to the
price of such packages sold by such stamping distributor.
Payment of the tax shall be evidenced by a stamp or stamps
affixed to each package of little cigars containing 20 or 25
little cigars.
Stamping distributors paying the tax to the Department on
packages of little cigars containing 20 or 25 little cigars
sold to other distributors, wholesalers or retailers shall add
the amount of the tax to the price of the packages of little
cigars containing 20 or 25 little cigars sold by such stamping
distributors.
(d) Beginning on January 1, 2013, the tax rate imposed per
ounce of moist snuff may not exceed 15% of the tax imposed upon
a package of 20 cigarettes pursuant to the Cigarette Tax Act.

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(d-5) Notwithstanding any other provisions of this Section
to the contrary, beginning January 1, 2025, and continuing
through December 31, 2027, the tax per cigar sold or otherwise
disposed of shall not exceed $0.75 per cigar. This subsection
shall not apply to little cigars.
(e) All moneys received by the Department under this Act
from sales occurring prior to July 1, 2012 shall be paid into
the Long-Term Care Provider Fund of the State Treasury. Of the
moneys received by the Department from sales occurring on or
after July 1, 2012, except for moneys received from the tax
imposed on the sale of little cigars, 50% shall be paid into
the Long-Term Care Provider Fund and 50% shall be paid into the
Healthcare Provider Relief Fund. Beginning July 1, 2013, all
moneys received by the Department under this Act from the tax
imposed on little cigars shall be distributed as provided in
Section 2 of the Cigarette Tax Act.
(Source: P.A. 101-31, eff. 6-28-19.)
(35 ILCS 143/10-24 new)
Sec. 10-24. Remote retail seller's license. Beginning on
January 1, 2025, it shall be unlawful for any person who meets
the criteria established in subsection (a-5) of Section 10-10
to engage in business as a remote retail seller within the
meaning of this Act without first having obtained a license to
do so from the Department. Application for that license shall
be made to the Department, by electronic means, in a form

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prescribed by the Department. Each applicant for a license
shall furnish to the Department, in an electronic format
established by the Department, the following information:
(1) the name and address of the applicant;
(2) the address of the location at which the applicant
proposes to engage in business as a remote retail seller
outside this State; and
(3) such other additional information as the
Department may lawfully require by rule.
Beginning on January 1, 2025, in addition to obtaining a
license to engage in business as a remote retail seller in this
State, no remote retail seller who meets the criteria
established in subsection (a-5) of Section 10-10 may engage in
business as a remote retail seller within the meaning of this
Act without registering under the Retailers' Occupation Tax
Act pursuant to Section 2a of that Act.
A separate annual license shall be obtained for each place
of business at which a person who is required to procure a
remote retail seller's license under this Section proposes to
engage in business as a remote retail seller in Illinois under
this Act. All licenses issued by the Department under this
Section shall be valid for a period not to exceed one year
after issuance unless sooner revoked, canceled, or suspended
as provided in this Act. All licenses must be renewed on an
annual basis. An application submitted by a remote retail
seller shall include an acknowledgement consenting to the

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jurisdiction of the Department and the courts of this State
concerning the enforcement of this Act and any related laws,
rules, and regulations, including authorizing the Department
of Revenue to conduct inspections and audits for the purpose
of ensuring compliance with this Act and to issue penalties
for violations of this Act.
Each remote retail seller must perform age verification
through an independent, third-party age verification service
that compares information available from a commercially
available database, or aggregate of databases, that are
regularly used by government agencies and businesses for the
purpose of age and identity verification to the personal
information entered by the individual during the ordering
process that establishes that the individual is of age.
If the provisions of subsection (a-5) of Section 10-10 are
met, and the tax imposed under this Act is being remitted using
the actual cost list method to calculate the tax, each remote
retailer seller must provide the remote retail sellers's
certified actual cost list to the Department for each SKU to be
offered for remote retail sale in the subsequent calendar
year. The actual cost list shall be updated by the remote
retailer seller quarterly as new SKUs are added to the remote
retail seller's inventory. New SKUs will be added using the
actual cost first paid for the SKU.
The following are ineligible to receive a remote retail
seller's license under this Act:

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(1) a person who has been convicted of a felony under
any federal or State law for smuggling cigarettes or
tobacco products or tobacco tax evasion, 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;
(2) 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; and
(3) any person who is in default to the State of
Illinois for moneys due under this Act or any other tax Act
administered by the Department.
The Department, upon receipt of an application and license
fee, in proper form, from a person who is eligible to receive a
remote retail seller'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 remote retail seller
under this Act at the place shown in the remote retail seller's
application. All licenses issued by the Department under this
Section shall be valid for a period not to exceed one year
after issuance unless sooner revoked, canceled or suspended as
provided in this Act. No license issued under this Section is
transferable or assignable. A person who obtains a license as

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a retailer who ceases to do business as specified in the
license, or who never commenced business, or whose license is
suspended or revoked, shall immediately surrender the license
to the Department.
The Department may, in its discretion, upon application,
authorize the payment of the tax imposed under Section 10-10
by any remote retail seller not otherwise subject to the tax
imposed under this Act who, to the satisfaction of the
Department, furnishes adequate security to ensure payment of
the tax. The remote retail seller shall be issued, without
charge, a license to remit the tax. When so authorized, it
shall be the duty of the remote retail seller to remit the tax
imposed upon the actual cost or actual cost list price of the
cigars or pipe tobacco sold or otherwise disposed of to
consumers located in this State, in the same manner and
subject to the same requirements as any other remote retail
seller required to be licensed under this Act. It shall be the
duty of the remote retail seller to remit the tax imposed upon
the actual cost or actual cost list price of cigar or pipe
tobacco, sold or otherwise disposed of to consumers located in
this State, in the same manner and subject to the same
requirements as any other remote retail seller required to be
licensed under this Act.
Any person aggrieved by any decision of the Department
under this Section may, within 30 days after notice of the
decision, protest and request a hearing. Upon receiving a

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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 30 days, the
Department's decision shall become final without any further
determination being made or notice given.
(35 ILCS 143/10-25)
Sec. 10-25. License actions.
(a) The Department may, after notice and a hearing,
revoke, cancel, or suspend the license of any distributor, or
retailer, or remote retail seller who violates any of the
provisions of this Act, fails to keep books and records as
required under this Act, fails to make books and records
available for inspection upon demand by a duly authorized
employee of the Department, or violates a rule or regulation
of the Department for the administration and enforcement of
this Act. The notice shall specify the alleged violation or
violations upon which the revocation, cancellation, or
suspension proceeding is based.
(a-5) The Department may, after notice and a hearing,
revoke, cancel, or suspend the license of a distributor or
remote retail seller that fails to properly register and remit
tax under the Retailers' Occupation Tax Act for all tobacco

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products that are sold to consumers in this State.
(a-10) The Department may, after notice and a hearing,
revoke, cancel, or suspend the license of a distributor or
remote retail seller who is found in violation of any law,
rule, or regulation of the state where the business is located
as listed on the license issued by the Department. The notice
shall specify the alleged violation or violations upon which
the revocation, cancellation, or suspension proceeding is
based.
(b) The Department may revoke, cancel, or suspend the
license of any distributor for a violation of the Tobacco
Product Manufacturers' Escrow Enforcement Act as provided in
Section 20 of that Act.
(c) If the retailer has a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 3 days the license of that
retailer for a fourth or subsequent violation of the
Prevention of Tobacco Use by Persons under 21 Years of Age and
Sale and Distribution of Tobacco Products Act, as provided in
subsection (a) of Section 2 of that Act. For the purposes of
this Section, any violation of subsection (a) of Section 2 of
the Prevention of Tobacco Use by Persons under 21 Years of Age
and Sale and Distribution of Tobacco Products Act occurring at
the retailer's licensed location, during a 24-month period,
shall be counted as a violation against the retailer.
If the retailer does not have a training program that

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facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 3 days the license of that
retailer for a second violation of the Prevention of Tobacco
Use by Persons under 21 Years of Age and Sale and Distribution
of Tobacco Products Act, as provided in subsection (a-5) of
Section 2 of that Act.
If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 7 days the license of that
retailer for a third violation of the Prevention of Tobacco
Use by Persons under 21 Years of Age and Sale and Distribution
of Tobacco Products Act, as provided in subsection (a-5) of
Section 2 of that Act.
If the retailer does not have a training program that
facilitates compliance with minimum-age tobacco laws, the
Department shall suspend for 30 days the license of a retailer
for a fourth or subsequent violation of the Prevention of
Tobacco Use by Persons under 21 Years of Age and Sale and
Distribution of Tobacco Products Act, as provided in
subsection (a-5) of Section 2 of that Act.
A training program that facilitates compliance with
minimum-age tobacco laws must include at least the following
elements: (i) it must explain that only individuals displaying
valid identification demonstrating that they are 21 years of
age or older shall be eligible to purchase cigarettes or
tobacco products and (ii) it must explain where a clerk can

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check identification for a date of birth. The training may be
conducted electronically. Each retailer that has a training
program shall require each employee who completes the training
program to sign a form attesting that the employee has
received and completed tobacco training. The form shall be
kept in the employee's file and may be used to provide proof of
training.
(d) The Department may, by application to any circuit
court, obtain an injunction restraining any person who engages
in business as a distributor or remote retailer of tobacco
products without a license (either because the his or her
license has been revoked, canceled, or suspended or because of
a failure to obtain a license in the first instance) from
engaging in that business until that person, as if that person
were a new applicant for a license, complies with all of the
conditions, restrictions, and requirements of Section 10-20 or
Section 10-24 of this Act and qualifies for and obtains a
license. Refusal or neglect to obey the order of the court may
result in punishment for contempt.
(Source: P.A. 100-940, eff. 8-17-18; 101-2, eff. 7-1-19.)
(35 ILCS 143/10-30)
Sec. 10-30. Returns.
(a) Every distributor shall, on or before the 15th day of
each month, file a return with the Department covering the
preceding calendar month. The return shall disclose the

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wholesale price, or beginning on January 1, 2025, the actual
cost or actual cost list price for all tobacco products other
than electronic cigarettes, little cigars or moist snuff and
the quantity in ounces of moist snuff sold or otherwise
disposed of and other information that the Department may
reasonably require. The return shall be filed upon a form
prescribed and furnished by the Department.
(a-5) Beginning February 1, 2025, every remote retail
seller shall, on or before the 15th day of each month, file a
return with the Department covering the preceding calendar
month. The remote retail seller's return must report all
cigars or pipe tobacco brought in or caused to be brought in
from outside the State or shipped or transported to consumers
within the State during the preceding calendar month. The
return must include further information as the Department may
prescribe and must show the total actual cost or actual cost
list price paid by a remote retail seller for a stock keeping
unit for the previous calendar month. The return must show the
amount of tax due for all remote retail sales made from outside
the State, to a consumer within the State during the preceding
calendar month. It is the intent and purpose of this
amendatory Act of the 103rd General Assembly that the remote
retail seller remit the tax at the time the return is filed. It
is further the intent and purpose of this amendatory Act of the
103rd General Assembly to impose the tax under this Act only
once on all tobacco products, including cigars and pipe

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tobacco, sold in the State.
(b) In addition to the information required under
subsection (a), on or before the 15th day of each month,
covering the preceding calendar month, each stamping
distributor shall, on forms prescribed and furnished by the
Department, report the quantity of little cigars sold or
otherwise disposed of, including the number of packages of
little cigars sold or disposed of during the month containing
20 or 25 little cigars.
(c) At the time when any return of any distributor or
remote retail seller is due to be filed with the Department,
the distributor shall also remit to the Department the tax
liability that the distributor or remote retail seller has
incurred for transactions occurring in the preceding calendar
month, less a discount of 1.75%, not to exceed $1,000 per
month, which is allowed to reimburse the distributor or remote
retail seller for the expenses incurred in keeping records,
preparing and filing returns, remitting the tax, and supplying
data to the Department on request. No discount may be claimed
by a taxpayer on returns not timely filed and for taxes not
timely remitted. No discount may be claimed by a taxpayer for
any return that is not filed electronically.
(d) The Department may adopt rules to require the
electronic filing of any return or document required to be
filed under this Act. Those rules may provide for exceptions
from the filing requirement set forth in this paragraph for

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persons who demonstrate that they do not have access to the
Internet and petition the Department to waive the electronic
filing requirement.
(e) If any payment provided for in this Section exceeds
the distributor's liabilities under this Act, as shown on an
original return, the distributor may credit such excess
payment against liability subsequently to be remitted to the
Department under this Act, in accordance with reasonable rules
adopted by the Department.
(Source: P.A. 100-1171, eff. 1-4-19.)
(35 ILCS 143/10-35)
Sec. 10-35. Record keeping.
(a) Every distributor, as defined in Section 10-5, shall
keep complete and accurate records of tobacco products held,
purchased, manufactured, brought in or caused to be brought in
from without the State, and tobacco products sold, or
otherwise disposed of, and shall preserve and keep all
invoices, bills of lading, sales records, and copies of bills
of sale, the wholesale price, and beginning January 1, 2025
the actual cost or actual cost list price for tobacco products
sold or otherwise disposed of, an inventory of tobacco
products prepared as of December 31 of each year or as of the
last day of the distributor's fiscal year if the distributor
he or she files federal income tax returns on the basis of a
fiscal year, and other pertinent papers and documents relating

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to the manufacture, purchase, sale, or disposition of tobacco
products. Every sales invoice issued by a licensed distributor
to a retailer in this State shall contain the distributor's
Tobacco Products License number unless the distributor has
been granted a waiver by the Department in response to a
written request in cases where (i) the distributor sells
little cigars or other tobacco products only to licensed
retailers that are wholly-owned by the distributor or owned by
a wholly-owned subsidiary of the distributor; (ii) the
licensed retailer obtains little cigars or other tobacco
products only from the distributor requesting the waiver; and
(iii) the distributor affixes the tax stamps to the original
packages of little cigars or has or will pay the tax on the
other tobacco products sold to the licensed retailer. The
distributor shall file a written request with the Department,
and, if the Department determines that the distributor meets
the conditions for a waiver, the Department shall grant the
waiver.
(b) Every retailer, as defined in Section 10-5, whether or
not the retailer has obtained a retailer's license pursuant to
Section 4g, shall keep complete and accurate records of
tobacco products held, purchased, sold, or otherwise disposed
of, and shall preserve and keep all invoices, bills of lading,
sales records, and copies of bills of sale, returns and other
pertinent papers and documents relating to the purchase, sale,
or disposition of tobacco products. Such records need not be

HB5108 - 29 - LRB103 37757 HLH 67885 b
maintained on the licensed premises, but must be maintained in
the State of Illinois; however, if access is available
electronically, the records may be maintained out of state.
However, all original invoices or copies thereof covering
purchases of tobacco products must be retained on the licensed
premises for a period of 90 days after such purchase, unless
the Department has granted a waiver in response to a written
request in cases where records are kept at a central business
location within the State of Illinois or in cases where
records that are available electronically are maintained out
of state. The Department shall adopt rules regarding the
eligibility for a waiver, revocation of a waiver, and
requirements and standards for maintenance and accessibility
of records located at a central location out-of-State pursuant
to a waiver provided under this Section.
(b-5) Every remote retail seller, as defined in Section
10-5, whether or not the remote retail seller has obtained a
remote retail seller's license pursuant to Section 4g, shall
keep complete and accurate records of tobacco products held,
purchased, sold, or otherwise disposed of, and shall preserve
and keep all invoices, bills of lading, sales records, and
copies of bills of sale, returns and other pertinent papers
and documents relating to the purchase, sale, or disposition
of tobacco products. Such records must be on the remote retail
seller's premises but need not be maintained in the State of
Illinois; however, remote retail sellers shall also provide

HB5108 - 30 - LRB103 37757 HLH 67885 b
access electronically. However, all original invoices or
copies thereof covering purchases of tobacco products must be
retained on the remote retail seller's premises for a period
of 365 days after such purchase.
(c) Books, records, papers, and documents that are
required by this Act to be kept shall, at all times during the
usual business hours of the day, be subject to inspection by
the Department or its duly authorized agents and employees.
The books, records, papers, and documents for any period with
respect to which the Department is authorized to issue a
notice of tax liability shall be preserved until the
expiration of that period.
(Source: P.A. 99-192, eff. 1-1-16; 100-940, eff. 8-17-18.)
(35 ILCS 143/10-37)
Sec. 10-37. Proof of payment of tax imposed by this Act.
Every licensed distributor of tobacco products in this State
is required to show proof of the tax having been paid as
required by this Act by displaying its Tobacco Products
License number on every sales invoice issued to a retailer in
this State. Every licensed remote retail seller of tobacco
products in this State is required to show proof of the tax
having been paid as required by this Act by displaying its
Tobacco Products License number on every sales invoice issued
to a consumer in this State. No retailer shall possess tobacco
products without either a proper invoice indicating that the

HB5108 - 31 - LRB103 37757 HLH 67885 b
tobacco products tax was paid by a distributor for the tobacco
products in the retailer's possession or other proof that the
tax was paid by the retailer if it has purchased tobacco
products on which tax has not been paid as required by this
Act. Failure to comply with the provisions of this paragraph
may be grounds for revocation of a distributor's, remote
retail seller's, or retailer's license in accordance with
Section 10-25 of this Act or Section 6 of the Cigarette Tax
Act. In addition, the Department may impose a civil penalty
not to exceed $1,000 for the first violation and $3,000 for
each subsequent violation, which shall be deposited into the
Tax Compliance and Administration Fund.
(Source: P.A. 100-940, eff. 8-17-18.)
(35 ILCS 143/10-38)
Sec. 10-38. Presumption for unlicensed distributors,
remote retail sellers, or persons. Whenever any person obtains
tobacco products from an unlicensed in-state or out-of-state
distributor, remote retail seller, or person, a prima facie
presumption shall arise that the tax imposed by this Act on
such tobacco products has not been paid in violation of this
Act. Invoices or other documents kept in the normal course of
business in the possession of a person reflecting purchases of
tobacco products from an unlicensed in-state or out-of-state
distributor, remote retail seller, or person or invoices or
other documents kept in the normal course of business obtained

HB5108 - 32 - LRB103 37757 HLH 67885 b
by the Department from in-state or out-of-state distributors,
remote retail sellers, or persons, are sufficient to raise the
presumption that the tax imposed by this Act has not been paid.
If a presumption is raised, the Department may assess tax,
penalty, and interest on the tobacco products. In addition,
any person who violates this Section is liable to pay to the
Department, for deposit in the Tax Compliance and
Administration Fund, a penalty of $1,000 for the first
violation and $3,000 for any subsequent violation. The
Department may adopt rules to administer the penalties under
this Section.
(Source: P.A. 100-940, eff. 8-17-18.)
(35 ILCS 143/10-45)
Sec. 10-45. Incorporation by reference. All of the
provisions of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h,
5i, 5j, 6, 6a, 6b, 6c, 8, 9, 10, 11, 11a, and 12 of the
Retailers' Occupation Tax Act, and all applicable provisions
of the Uniform Penalty and Interest Act that are not
inconsistent with this Act, apply to distributors and remote
retail sellers of tobacco products to the same extent as if
those provisions were included in this Act. References in the
incorporated Sections of the Retailers' Occupation Tax Act to
retailers, to sellers, or to persons engaged in the business
of selling tangible personal property mean distributors or
remote retail sellers when used in this Act. References in the

HB5108 - 33 - LRB103 37757 HLH 67885 b
incorporated Sections to sales of tangible personal property
mean sales of tobacco products when used in this Act.
All of the provisions of Sections 7, 8, 8a, 16, 18a, 18b,
18c, 22, 23, 24, 26, 27, and 28a of the Cigarette Tax Act which
are not inconsistent with this Act shall apply, as far as
practicable, to the subject matter of this Act to the same
extent as if those provisions were included in this Act.
References in the incorporated Sections to sales of cigarettes
mean sales of little cigars in packages of 20 or 25 little
cigars.
(Source: P.A. 98-273, eff. 8-9-13.)
(35 ILCS 143/10-50)
Sec. 10-50. Violations and penalties. When the amount due
is under $300, any distributor or remote retail seller who
fails to file a return, willfully fails or refuses to make any
payment to the Department of the tax imposed by this Act, or
files a fraudulent return, or any officer or agent of a
corporation engaged in the business of distributing or
engaging in remote retail sales of tobacco products to
retailers or and consumers located in this State who signs a
fraudulent return filed on behalf of the corporation, or any
accountant or other agent who knowingly enters false
information on the return of any taxpayer under this Act is
guilty of a Class 4 felony.
Any person who violates any provision of Section 10-20,

HB5108 - 34 - LRB103 37757 HLH 67885 b
10-21, or 10-22, or 10-24 of this Act, fails to keep books and
records as required under this Act, or willfully violates a
rule or regulation of the Department for the administration
and enforcement of this Act is guilty of a Class 4 felony. A
person commits a separate offense on each day that he or she
engages in business in violation of Section 10-20, 10-21, or
10-22, or 10-24 of this Act. If a person fails to produce the
books and records for inspection by the Department upon
request, a prima facie presumption shall arise that the person
has failed to keep books and records as required under this
Act. A person who is unable to rebut this presumption is in
violation of this Act and is subject to the penalties provided
in this Section.
When the amount due is under $300, any person who accepts
money that is due to the Department under this Act from a
taxpayer for the purpose of acting as the taxpayer's agent to
make the payment to the Department, but who fails to remit the
payment to the Department when due, is guilty of a Class 4
felony.
Any person who violates any provision of Sections 10-20,
10-21 and 10-22 of this Act, fails to keep books and records as
required under this Act, or willfully violates a rule or
regulation of the Department for the administration and
enforcement of this Act is guilty of a business offense and may
be fined up to $5,000. If a person fails to produce books and
records for inspection by the Department upon request, a prima

HB5108 - 35 - LRB103 37757 HLH 67885 b
facie presumption shall arise that the person has failed to
keep books and records as required under this Act. A person who
is unable to rebut this presumption is in violation of this Act
and is subject to the penalties provided in this Section. A
person commits a separate offense on each day that he or she
engages in business in violation of Sections 10-20, 10-21 and
10-22 of this Act.
When the amount due is $300 or more, any distributor or
remote retail seller who files, or causes to be filed, a
fraudulent return, or any officer or agent of a corporation
engaged in the business of distributing or engaging in remote
retail sales of tobacco products to retailers or and consumers
located in this State who files or causes to be filed or signs
or causes to be signed a fraudulent return filed on behalf of
the corporation, or any accountant or other agent who
knowingly enters false information on the return of any
taxpayer under this Act is guilty of a Class 3 felony.
When the amount due is $300 or more, any person engaged in
the business of distributing or engaging in remote retail
sales of tobacco products to retailers or and consumers
located in this State who fails to file a return, willfully
fails or refuses to make any payment to the Department of the
tax imposed by this Act, or accepts money that is due to the
Department under this Act from a taxpayer for the purpose of
acting as the taxpayer's agent to make payment to the
Department but fails to remit such payment to the Department

HB5108 - 36 - LRB103 37757 HLH 67885 b
when due is guilty of a Class 3 felony.
When the amount due is under $300, any retailer who fails
to file a return, willfully fails or refuses to make any
payment to the Department of the tax imposed by this Act, or
files a fraudulent return, or any officer or agent of a
corporation engaged in the retail business of selling tobacco
products to purchasers of tobacco products for use and
consumption located in this State who signs a fraudulent
return filed on behalf of the corporation, or any accountant
or other agent who knowingly enters false information on the
return of any taxpayer under this Act is guilty of a Class A
misdemeanor for a first offense and a Class 4 felony for each
subsequent offense.
When the amount due is $300 or more, any retailer who fails
to file a return, willfully fails or refuses to make any
payment to the Department of the tax imposed by this Act, or
files a fraudulent return, or any officer or agent of a
corporation engaged in the retail business of selling tobacco
products to purchasers of tobacco products for use and
consumption located in this State who signs a fraudulent
return filed on behalf of the corporation, or any accountant
or other agent who knowingly enters false information on the
return of any taxpayer under this Act is guilty of a Class 4
felony.
Any person whose principal place of business is in this
State and who is charged with a violation under this Section

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shall be tried in the county where his or her principal place
of business is located unless he or she asserts a right to be
tried in another venue. If the taxpayer does not have his or
her principal place of business in this State, however, the
hearing must be held in Sangamon County unless the taxpayer
asserts a right to be tried in another venue.
Any taxpayer or agent of a taxpayer who with the intent to
defraud purports to make a payment due to the Department by
issuing or delivering a check or other order upon a real or
fictitious depository for the payment of money, knowing that
it will not be paid by the depository, is guilty of a deceptive
practice in violation of Section 17-1 of the Criminal Code of
2012.
A prosecution for a violation described in this Section
may be commenced within 3 years after the commission of the act
constituting the violation.
(Source: P.A. 100-201, eff. 8-18-17; 100-940, eff. 8-17-18.)