Section 660.17 Nicotine Products

TITLE 86: REVENUE

CHAPTER I: DEPARTMENT OF REVENUE

PART 660 TOBACCO PRODUCTS TAX ACT OF 1995

SECTION 660.17 NICOTINE PRODUCTS

Section

660.17  Nicotine Products

a)         Beginning

July 1, 2025, nicotine products, whether naturally derived from tobacco or

synthetically made, are included in the definition of "tobacco

products" and subject to the provisions of this Part.  Public Act 104-0006

changed the definition of "tobacco products."

1)         Effective

on and after July 1, 2025, "tobacco product" includes

any product

that is made from or derived from tobacco, or that contains nicotine whether

natural or synthetic, that is intended for human consumption or is likely to be

consumed, including but not limited to nicotine pouches, lozenges, and gum; and

other kinds and forms of nicotine prepared in such manner as to be suitable for

chewing or smoking in a pipe or otherwise, or both for chewing and smoking or

for inhalation, absorption, or ingesting by any other means.

2)         However,

"tobacco products" does not include any product that has been

approved by the United States Food and Drug Administration

(FDA) f

or

sale as a tobacco or smoking cessation product, a nicotine replacement therapy

product, or for other medical purposes where that product is marketed and sold

solely for such approved use, including but not limited to spray or inhaler

prescribed by a physician, chewing gum, skin patches, or lozenges.

[35

ILCS 143/10-5]

b)         To be

excluded from the definition of "tobacco product" as a therapeutic

product or smoking cessation product, the product must be marketed as

FDA-approved nicotine replacement therapy.  Over-the-counter nicotine,

FDA-approved replacement therapy products include a "drug facts"

label on the packaging.

c)         Registration and Licenses

1)         Retailers

selling nicotine products, including pouches, at retail to users and consumers

must obtain a tobacco retailer license.  See 86 Ill. Adm. Code 660.16

product must be marketed as

FDA-approved nicotine replacement therapy.  Over-the-counter nicotine,

FDA-approved replacement therapy products include a "drug facts"

label on the packaging.

c)         Registration and Licenses

1)         Retailers

selling nicotine products, including pouches, at retail to users and consumers

must obtain a tobacco retailer license.  See 86 Ill. Adm. Code 660.16.

2)         Retailers

selling nicotine products on which the tax has not or will not be paid by a

distributor must obtain a distributor license, file returns, and remit the tax

to the Department.  See 86 Ill. Adm. Code 660.15.

3)         Manufacturers

of nicotine products (e.g., pouches, lozenges) meeting the definition of

"distributor" selling nicotine products directly to consumers must

obtain both a distributor license and a tobacco retailer license.

4)         Any

manufacturer or wholesaler engaged in the business of selling tobacco products

from outside of Illinois who sells, exchanges, distributes, ships, or

transports nicotine products to retailers or consumers located in Illinois must

register to become a distributor if the manufacturer or wholesaler has or

maintains within Illinois, directly or by subsidiary, an office, sales house,

or other place of business, or any agent or other representative operating

within Illinois 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.

EXAMPLE:  An out-of-State manufacturer of

nicotine products sells nicotine products over the internet at retail to

consumers in this State.  It also sells nicotine products to retailers in this

State.  The manufacturer has representatives that solicit sales by retail

stores in this State.  The manufacturer is required to obtain a distributor

license and pay the tax on all sales made to retailers and consumers in this

State

cturer of

nicotine products sells nicotine products over the internet at retail to

consumers in this State.  It also sells nicotine products to retailers in this

State.  The manufacturer has representatives that solicit sales by retail

stores in this State.  The manufacturer is required to obtain a distributor

license and pay the tax on all sales made to retailers and consumers in this

State.

d)         Invoices

Whenever any sales invoice issued by an

in-State or out-of-State seller for nicotine products sold to a retailer does

not comply with the requirements of Section 660.25 (d) and (e), a prima facie

presumption shall arise that the tax imposed by Section 10-10 of the Act and

Section 660.5 has not been paid on the nicotine products listed on the sales

invoice.  A retailer that is unable to rebut this presumption is in violation

of both the Act and this Part and is subject to applicable taxes, penalties,

and interest.