Bill Text: IL SB2994 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Tobacco Products Tax Act of 1995. Provides that, beginning January 1, 2025, the tax per cigar sold or otherwise disposed of shall not exceed $0.50 per cigar, excluding little cigars. Provides that distributors are allowed a discount in the amount of 2% of the distributor's tax liability but not more than $2,000 per return.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2024-06-26 - Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB2994 Detail]

Download: Illinois-2023-SB2994-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB2994 Introduced 2/2/2024, by Sen. Jil Tracy SYNOPSIS AS INTRODUCED:
35 ILCS 143/10-10
35 ILCS 143/10-30
Amends the Tobacco Products Tax Act of 1995. Provides that, beginning January 1, 2025, the tax per cigar sold or otherwise disposed of shall not exceed $0.50 per cigar, excluding little cigars. Provides that distributors are allowed a discount in the amount of 2% of the distributor's tax liability but not more than $2,000 per return.
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A BILL FOR
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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 Tobacco Products Tax Act of 1995 is amended
by changing Sections 10-10 and 10-30 as follows:
(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 (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 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;
except that, 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; and except that, beginning
July 1, 2019, the tax on electronic cigarettes shall be

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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 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
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.
(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

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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. 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.

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(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.
(d-5) Notwithstanding the provisions of this Section,
beginning January 1, 2025, the tax per cigar sold or otherwise
disposed of shall not exceed $0.50 per cigar. This subsection
does 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 143/10-30)
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
wholesale price for all tobacco products other than moist

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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.
(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 is due
to be filed with the Department, the distributor shall also
remit to the Department the tax liability that the distributor
has incurred for transactions occurring in the preceding
calendar month, less the discount allowed.
(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
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

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