Bill Text: IL SB1850 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Amends the Cigarette Tax Act. Makes changes concerning the distribution of moneys collected pursuant to (i) the Cigarette Tax Act, (ii) the Cigarette Use Tax Act, and (iii) the tax imposed on little cigars under the Tobacco Products Tax Act of 1995. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed) 2023-04-28 - Rule 19(a) / Re-referred to Rules Committee [SB1850 Detail]

Download: Illinois-2023-SB1850-Engrossed.html

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AN ACT concerning revenue.
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
Section 2 as follows:
(35 ILCS 130/2) (from Ch. 120, par. 453.2)
Sec. 2. Tax imposed; rate; collection, payment, and
distribution; discount.
(a) Beginning on July 1, 2019, in place of the aggregate
tax rate of 99 mills previously imposed by this Act, a tax is
imposed upon any person engaged in business as a retailer of
cigarettes at the rate of 149 mills per cigarette sold or
otherwise disposed of in the course of such business in this
State.
(b) The payment of such taxes shall be evidenced by a stamp
affixed to each original package of cigarettes, or an
authorized substitute for such stamp imprinted on each
original package of such cigarettes underneath the sealed
transparent outside wrapper of such original package, as
hereinafter provided. However, such taxes are not imposed upon
any activity in such business in interstate commerce or
otherwise, which activity may not under the Constitution and
statutes of the United States be made the subject of taxation

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by this State.
Out of the 149 mills per cigarette tax imposed by
subsection (a), until July 1, 2023, the revenues received from
4 mills shall be paid into the Common School Fund each month,
not to exceed $9,000,000 per month. Out of the 149 mills per
cigarette tax imposed by subsection (a), until July 1, 2023,
all of the revenues received from 7 mills shall be paid into
the Common School Fund each month. Out of the 149 mills per
cigarette tax imposed by subsection (a), until July 1, 2023,
50 mills per cigarette each month shall be paid into the
Healthcare Provider Relief Fund.
Beginning on July 1, 2006 and until July 1, 2023, all of
the moneys received by the Department of Revenue pursuant to
this Act and the Cigarette Use Tax Act, other than the moneys
that are dedicated to the Common School Fund and, beginning on
the effective date of this amendatory Act of the 97th General
Assembly, other than the moneys from the additional taxes
imposed by this amendatory Act of the 97th General Assembly
that must be paid each month into the Healthcare Provider
Relief Fund, and other than the moneys from the additional
taxes imposed by this amendatory Act of the 101st General
Assembly that must be paid each month under subsection (c),
shall be distributed each month as follows: first, there shall
be paid into the General Revenue Fund an amount that, when
added to the amount paid into the Common School Fund for that
month, equals $29,200,000; then, from the moneys remaining, if

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any amounts required to be paid into the General Revenue Fund
in previous months remain unpaid, those amounts shall be paid
into the General Revenue Fund; then from the moneys remaining,
$5,000,000 per month shall be paid into the School
Infrastructure Fund; then, if any amounts required to be paid
into the School Infrastructure Fund in previous months remain
unpaid, those amounts shall be paid into the School
Infrastructure Fund; then the moneys remaining, if any, shall
be paid into the Long-Term Care Provider Fund. Any amounts
required to be paid into the General Revenue Fund, the School
Infrastructure Fund, the Long-Term Care Provider Fund, the
Common School Fund, the Capital Projects Fund, or the
Healthcare Provider Relief Fund under this subsection that
remain unpaid as of July 1, 2023 shall be deemed satisfied on
that date, eliminating any deficiency accrued through that
date.
(c) Beginning on July 1, 2019 and until July 1, 2023, all
of the moneys from the additional taxes imposed by Public Act
101-31, except for moneys received from the tax on electronic
cigarettes, received by the Department of Revenue pursuant to
this Act, the Cigarette Use Tax Act, and the Tobacco Products
Tax Act of 1995 shall be distributed each month into the
Capital Projects Fund.
(c-5) Beginning on July 1, 2023, all of the moneys
received by the Department of Revenue pursuant to (i) this
Act, (ii) the Cigarette Use Tax Act, and (iii) the tax imposed

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on little cigars under Section 10-10 of the Tobacco Products
Tax Act of 1995 shall be paid each month as follows:
(1) 7% into the Common School Fund;
(2) 34% into the Healthcare Provider Relief Fund;
(3) 34% into the Capital Projects Fund; and
(4) 25% into the General Revenue Fund.
(d) Until July 1, 2023, except Except for moneys received
from the additional taxes imposed by Public Act 101-31, moneys
collected from the tax imposed on little cigars under Section
10-10 of the Tobacco Products Tax Act of 1995 shall be included
with the moneys collected under the Cigarette Tax Act and the
Cigarette Use Tax Act when making distributions to the Common
School Fund, the Healthcare Provider Relief Fund, the General
Revenue Fund, the School Infrastructure Fund, and the
Long-Term Care Provider Fund under this Section. Any amounts,
including moneys collected from the tax imposed on little
cigars under Section 10-10 of the Tobacco Products Tax Act of
1995, that are required to be paid into the General Revenue
Fund, the School Infrastructure Fund, the Long-Term Care
Provider Fund, the Common School Fund, the Capital Projects
Fund, or the Healthcare Provider Relief Fund under subsection
(b) that remain unpaid as of July 1, 2023 shall be deemed
satisfied on that date, eliminating any deficiency accrued
through that date. Beginning on July 1, 2023, moneys collected
from the tax imposed on little cigars under Section 10-10 of
the Tobacco Products Tax Act of 1995 shall be included with the

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moneys collected under the Cigarette Tax Act and the Cigarette
Use Tax Act when making distributions under subsections (c-5).
(e) If the tax imposed herein terminates or has
terminated, distributors who have bought stamps while such tax
was in effect and who therefore paid such tax, but who can
show, to the Department's satisfaction, that they sold the
cigarettes to which they affixed such stamps after such tax
had terminated and did not recover the tax or its equivalent
from purchasers, shall be allowed by the Department to take
credit for such absorbed tax against subsequent tax stamp
purchases from the Department by such distributor.
(f) The impact of the tax levied by this Act is imposed
upon the retailer and shall be prepaid or pre-collected by the
distributor for the purpose of convenience and facility only,
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, as hereinafter provided. Any
distributor who purchases stamps may credit any excess
payments verified by the Department against amounts
subsequently due for the purchase of additional stamps, until
such time as no excess payment remains.
(g) Each distributor shall collect the tax from the
retailer at or before the time of the sale, shall affix the
stamps as hereinafter required, and shall remit the tax
collected from retailers to the Department, as hereinafter

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provided. Any distributor who fails to properly collect and
pay the tax imposed by this Act shall be liable for the tax.
(h) Any distributor having cigarettes in his or her
possession on July 1, 2019 to which tax stamps have been
affixed, and any distributor having stamps in his or her
possession on July 1, 2019 that have not been affixed to
packages of cigarettes before July 1, 2019, is required to pay
the additional tax that begins on July 1, 2019 imposed by this
amendatory Act of the 101st General Assembly to the extent
that the volume of affixed and unaffixed stamps in the
distributor's possession on July 1, 2019 exceeds the average
monthly volume of cigarette stamps purchased by the
distributor in calendar year 2018. This payment, less the
discount provided in subsection (l), is due when the
distributor first makes a purchase of cigarette stamps on or
after July 1, 2019 or on the first due date of a return under
this Act occurring on or after July 1, 2019, whichever occurs
first. Those distributors may elect to pay the additional tax
on packages of cigarettes to which stamps have been affixed
and on any stamps in the distributor's possession that have
not been affixed to packages of cigarettes in their possession
on July 1, 2019 over a period not to exceed 12 months from the
due date of the additional tax by notifying the Department in
writing. The first payment for distributors making such
election is due when the distributor first makes a purchase of
cigarette tax stamps on or after July 1, 2019 or on the first

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due date of a return under this Act occurring on or after July
1, 2019, whichever occurs first. Distributors making such an
election are not entitled to take the discount provided in
subsection (l) on such payments.
(i) Any retailer having cigarettes in its possession on
July 1, 2019 to which tax stamps have been affixed is not
required to pay the additional tax that begins on July 1, 2019
imposed by this amendatory Act of the 101st General Assembly
on those stamped cigarettes.
(j) Distributors making sales of cigarettes to secondary
distributors shall add the amount of the tax to the price of
the cigarettes sold by the distributors. Secondary
distributors making sales of cigarettes to retailers shall
include the amount of the tax in the price of the cigarettes
sold to retailers. The amount of tax shall not be less than the
amount of taxes imposed by the State and all local
jurisdictions. The amount of local taxes shall be calculated
based on the location of the retailer's place of business
shown on the retailer's certificate of registration or
sub-registration issued to the retailer pursuant to Section 2a
of the Retailers' Occupation Tax Act. The original packages of
cigarettes sold to the retailer shall bear all the required
stamps, or other indicia, for the taxes included in the price
of cigarettes.
(k) The amount of the Cigarette Tax imposed by this Act
shall be separately stated, apart from the price of the goods,

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by distributors, manufacturer representatives, secondary
distributors, and retailers, in all bills and sales invoices.
(l) The distributor shall be required to collect the tax
provided under paragraph (a) hereof, and, to cover the costs
of such collection, shall be allowed a discount during any
year commencing July 1st and ending the following June 30th in
accordance with the schedule set out hereinbelow, which
discount shall be allowed at the time of purchase of the stamps
when purchase is required by this Act, or at the time when the
tax is remitted to the Department without the purchase of
stamps from the Department when that method of paying the tax
is required or authorized by this Act.
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 shall
apply.
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.
(m) The taxes herein imposed are in addition to all other
occupation or privilege taxes imposed by the State of
Illinois, or by any political subdivision thereof, or by any

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municipal corporation.
(Source: P.A. 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19;
101-604, eff. 12-13-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.