Illinois Administrative Code › Title 86 - REVENUE › Part 450 - CIGARETTE USE TAX ACT › Section 450.10 - Nature and Rate of Tax

Current through Register Vol. 48, No. 28, July 12, 2024
a) The Cigarette
			 Use Tax is imposed upon the privilege of using cigarettes in this State, and
			 the tax rate is 99 mills per cigarette or $1.98 on a package of 20 cigarettes
			 through June 30, 2019; and, beginning July 1, 2019, the tax rate is 149 mills
			 per cigarette or $2.98 on a package of 20 cigarettes.
All moneys
			 received by the Department under the Cigarette Use Tax Act (the Act) shall be
			 distributed as provided in Section 2 of the Cigarette Tax Act
(Section
			 35 of the Act).
b) The tax must be
			 collected by a distributor maintaining a place of business in this State or a
			 distributor authorized by Section 7 of the Act to hold a permit to collect the
			 tax, and the amount of the tax shall be added to the price of the cigarettes
			 sold by the distributor and must be stated on the invoice as a separate item
			 from the selling price of the cigarettes except when the purchaser is a federal
			 or foreign government agency or instrumentality (see Section
			 450.50
			 ).
c) Distributors who are not
			 subject to the Cigarette Tax Act [35 ILCS 130], but who are subject to the
			 Cigarette Use Tax Act [35 ILCS 135], must remit, to the Department of Revenue
			 (the Department), the amount of Cigarette Use Tax to be collected by them
			 through the purchase and affixation of tax stamps or meter impression units
			 (when the use of meters is authorized by the Department) to any original
			 package of cigarettes before delivering the cigarettes (or causing them to be
			 delivered) in this State to any purchaser, or (in the case of manufacturers of
			 cigarettes in original packages that are contained inside a sealed transparent
			 wrapper) by imprinting the language to be prescribed by the Department on the
			 original package of cigarettes beneath the outside wrapper.
1) No
stamp or imprint may be affixed
			 to, or made upon, any package of cigarettes unless that package complies with
			 all requirements of the federal Cigarette Labeling and Advertising Act
			 (15 USC
			 1331 and following), for the placement of
			 labels, warnings, or any other information upon a package of cigarettes that is
			 sold within the United States. Under the authority of Section
			 6
of the Cigarette Use Tax Act
,
the Department
			 shall revoke the license of any distributor that is determined to have violated
			 this
subsection (c)(1).
A person may not affix a stamp on a
			 package of cigarettes, cigarette papers, wrappers, or tubes if that individual
			 package has been marked for export outside the United States with a label or
			 notice in compliance with 27 CFR 290.185. It is not a defense to a proceeding
			 for violation of this
subsection (c)(1)
that the label or
			 notice has been removed, mutilated, obliterated, or altered in any
			 manner.
(Section 3 of the Act)
2) Packages of cigarettes, cigarette papers,
			 wrappers, or tubes stamped or imprinted in a manner not in accordance with
			 subsection (c)(1) and found in the possession of a distributor create a
			 rebuttable presumption that the packages of cigarettes, cigarette papers,
			 wrappers, or tubes were stamped or imprinted in violation of the Act.
3) Packages of cigarettes, cigarette papers,
			 wrappers, or tubes stamped or imprinted in a manner not in accordance with
			 subsection (c)(1) and found in the possession of a retailer create a rebuttable
			 presumption that the packages of cigarettes, cigarette papers, wrappers, or
			 tubes were stamped or imprinted by the distributor from whom they were obtained
			 in violation of the Act.
4) No
stamp or imprint may be affixed to, or made upon, any package of
			 cigarettes
(Section 3 of the Act)
that:
A)
bears any statement, label, stamp,
			 sticker, or notice indicating that the manufacturer did not intend the
			 cigarettes to be sold, distributed, or used in the United States, including but
			 not limited to labels stating "For Export Only", "U.S. Tax Exempt", "For Use
			 Outside U.S.", or similar wording;
B)
does not comply with:
i)
all requirements imposed by or
			 pursuant to federal law regarding warnings and other information on packages of
			 cigarettes manufactured, packaged, or imported for sale, distribution, or use
			 in the United States, including but not limited to the precise warning labels
			 specified in the federal Cigarette Labeling and Advertising Act (15 USC
			 1333); and
ii)
all federal trademark and
			 copyright laws;
C)
is imported into the United States
			 in violation of
			 26
			 USC 5754 or any other federal law or
			 implementing federal regulations;
D) the person affixing the stamp or imprint
			 otherwise knows or has reason to know
the manufacturer did not intend
			 to be sold, distributed, or used in the United States;
E)
for which there has not been
			 submitted to the Secretary of the U.S. Department of Health and Human Services
			 the list or lists of the ingredients added to tobacco in the manufacture of the
			 cigarettes required by the federal Cigarette Labeling and Advertising Act
			 (15
			 USC 1335a); or
F)
has been altered, prior to sale or
			 distribution to the ultimate consumer, so as to remove, conceal, or
			 obscure:
i)
any statement,
			 label, stamp, sticker, or notice described in
86 Ill. Adm. Code
			 440.50(k)(1)
; or
ii)
any health warning that is not specified in, or does not conform with
			 the requirements of, the federal Cigarette Labeling and Advertising
			 Act.
(Section 3-10 of the Act)
5) Packages of cigarettes, cigarette papers,
			 wrappers, or tubes stamped or imprinted in a manner not in accordance with
			 subsection (c)(4) and found in the possession of a distributor create a
			 rebuttable presumption that the packages of cigarettes, cigarette papers,
			 wrappers or tubes were stamped or imprinted in violation of the Act.
6) Packages of cigarettes, cigarette papers,
			 wrappers or tubes stamped or imprinted in a manner not in accordance with
			 subsection (c)(4) and found in the possession of a retailer create a rebuttable
			 presumption that the packages of cigarettes, cigarette papers, wrappers or
			 tubes were stamped or imprinted by the distributor from whom they were obtained
			 in violation of the Act.
7) On
the first business day of each month, each person licensed to affix the
			 State tax stamp to cigarettes shall file with the Department, for all
			 cigarettes imported into the United States to which the person has affixed the
			 tax stamp in the preceding month.
8)
A
copy
			 of:
A)
the permit issued
			 pursuant to the Internal Revenue Code (26 USC 5713),
			 to the person importing the cigarettes into the United States allowing the
			 person to import the cigarettes; and
B)
the customs form containing, with
			 respect to the cigarettes, the internal revenue tax information required by the
			 U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives.
9)
A
statement, signed by the person under penalty of
			 perjury, which shall be treated as confidential by the Department and exempt
			 from disclosure under the Freedom of Information Act
[5 ILCS
			 140]
, identifying the brand and brand styles of all such cigarettes,
			 the quantity of each brand style of such cigarettes, the supplier of such
			 cigarettes, and the person or persons, if any, to whom such cigarettes have
			 been conveyed for resale.
10) In addition to the statement required in
			 subsection (c)(9),
a separate statement, signed by the individual under
			 penalty of perjury, which shall not be treated as confidential or exempt from
			 disclosure, separately identifying the brands and brand styles of such
			 cigarettes.
11) In
			 addition to the statement required in subsection (c)(9) and (c)(10)
, a
			 separate statement, signed by an officer of the manufacturer or importer under
			 penalty of perjury, certifying that the manufacturer or importer has complied
			 with:
A)
the package health
			 warning and ingredient reporting requirements of the federal Cigarette Labeling
			 and Advertising Act (15 USC 1333 and
			 1335a)
			 with respect to such cigarettes; and
B)
the provisions of Exhibit T of the
			 Master Settlement Agreement entered in the case of People of the State of
			 Illinois v. Philip Morris, et al. (Circuit Court of Cook County, No.
			 96-L13146), including a statement indicating whether the manufacturer is, or is
			 not, a participating tobacco manufacturer within the meaning of Exhibit
			 T.
(Section 3-10 of the Act)
12) The Department may revoke or suspend the
			 license or licenses of any distributor, in the manner provided in Section 6 of
			 the Cigarette Use Tax Act, if the Department determines that the distributor
			 knew or had reason to know that the distributor was committing any of the acts
			 prohibited in subsection (c)(4) of this Section or had failed to comply with
			 any of the requirements of Section 3-10(b) of the Act. In addition, the
			 Department may impose on the distributor a civil penalty in an amount not to
			 exceed the greater of 500% of the retail value of the cigarettes involved or
			 $5,000. Cigarettes acquired, held, owned, possessed, transported in, imported
			 into, or sold or distributed in this State in violation of subsection (c)(4)
			 shall be subject to seizure and forfeiture whether the violation is knowing or
			 otherwise. (See Section 3-10(c)(1) of the Act.)