Section 660.5 Nature and Rate of Tobacco Products Tax

Section 660

TITLE 86: REVENUE

CHAPTER I: DEPARTMENT OF REVENUE

PART 660 TOBACCO PRODUCTS TAX ACT OF 1995

SECTION 660.5 NATURE AND RATE OF TOBACCO PRODUCTS TAX

Section 660.5  Nature and

Rate of Tobacco Products Tax

The Tobacco Products Tax Act of 1995 imposes a tax on any

person in business as a distributor of tobacco products.  The tax is based on

the wholesale price of tobacco products sold or otherwise disposed of to

distributors located in Illinois, except moist snuff sold or otherwise disposed

of on or after January 1, 2013

through June 30, 2025,

and little cigars sold or otherwise disposed of on or after July 1, 2013.

Beginning January 1, 2013,

and through June 30, 2025,

under the Act, moist snuff is taxed by the ounce and all fractional

parts of an ounce.  Beginning July 1, 2013, little cigars are taxed under the

Act at the same rate as cigarettes.  Little cigars in packages of 20 or 25 little

cigars sold by stamping distributors must have a tax stamp affixed.  Stamping

distributors must purchase tax stamps from the Department in same manner as

licensed cigarette distributors purchase tax stamps that are affixed to

packages of cigarettes.  The same tax stamps are affixed to packages of little

cigars and cigarettes containing 20 or 25 little cigars or cigarettes.  Taxes

on packages of little cigars containing other than 20 or 25 little cigars are

reported on a return to be filed no later than the 15

th

of the month

and paid on or before the date the return is due

s purchase tax stamps that are affixed to

packages of cigarettes.  The same tax stamps are affixed to packages of little

cigars and cigarettes containing 20 or 25 little cigars or cigarettes.  Taxes

on packages of little cigars containing other than 20 or 25 little cigars are

reported on a return to be filed no later than the 15

th

of the month

and paid on or before the date the return is due.

a)

Except as otherwise provided in this Section with respect

to moist snuff, electronic cigarettes, and little cigars, the

Tobacco

Products Tax is imposed upon the last distributor, as defined in Section

660.10, who sells tobacco products to a retailer or consumer located in

Illinois at the rate of 18% of the wholesale price of tobacco products sold or

otherwise disposed of in this State

prior to July 1, 2012 and 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 through June 30, 2025

.  Beginning on January 1,

2013

and through June 30, 2025

, 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,

provided that

the

rate of tax imposed on moist snuff

after any future rate increases

may

not exceed 15% of the tax imposed upon a package of 20 cigarettes pursuant to

the Cigarette Tax Act

[35 ILCS 130]

.  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

[35 ILCS 130]

.

[35 ILCS 143/10-10]

Beginning July 1, 2013, and

prior to July 1, 2019, the tax on little cigars is 99 mills per little cigar

sold or otherwise disposed of.  Beginning July 1, 2019, the tax on little

cigars is 149 mills per little cigar sold or otherwise disposed of

the proceeds

shall be distributed in the same manner, as the tax

imposed on cigarettes under the Cigarette Tax Act

[35 ILCS 130]

.

[35 ILCS 143/10-10]

Beginning July 1, 2013, and

prior to July 1, 2019, the tax on little cigars is 99 mills per little cigar

sold or otherwise disposed of.  Beginning July 1, 2019, the tax on little

cigars is 149 mills per little cigar sold or otherwise disposed of.

Beginning

July 1, 2019

and through June 30, 2025

, the

tax on electronic cigarettes shall be 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.

[35 ILCS 143/10-10]

b)

Beginning on July 1, 2025, except as

otherwise provided in subsection (a) with respect to little cigars, the Tobacco

Products Tax is imposed upon the last distributor who sells tobacco products to

a retailer or consumer located in Illinois at the rate of

45% of the

wholesale price of tobacco products, including moist snuff and electronic

cigarettes, sold or otherwise disposed of to retailers or consumers located in

this State.

[35 ILCS 143/10-10]

c)

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

[35 ILCS 143/10-10(a)]

.

d)         A

retailer is required to register as a distributor, file returns and pay the

Tobacco Products Tax imposed by the Act on all sales of tobacco products on

which the tax has not been paid unless the sales are exempt under Section

660.30.  (See Sections 660.15, 660.20, and 660.30.)

Retailers that are not stamping distributors shall purchase stamped

packages of little cigars containing 20 or 25 little cigars for resale only

from stamping distributors, distributors, or wholesalers.  Retailers who are

not stamping distributors may not purchase or possess unstamped packages of

little cigars containing 20 or 25 little cigars

660.30.  (See Sections 660.15, 660.20, and 660.30.)

Retailers that are not stamping distributors shall purchase stamped

packages of little cigars containing 20 or 25 little cigars for resale only

from stamping distributors, distributors, or wholesalers.  Retailers who are

not stamping distributors may not purchase or possess unstamped packages of

little cigars containing 20 or 25 little cigars.  Retailers who are not

stamping distributors may not purchase or possess packages of little cigars

containing other than 20 or 25 little cigars, unless the retailer receives an

invoice from a stamping distributor, distributor, or wholesaler stating the tax

on the packages has been or will be paid.

[35 ILCS 143/10-27]

(See Section

660.28.)

e)         The

Tobacco Products Tax is paid on the wholesale price of tobacco products, except

on little cigars.  The wholesale price is the established list price for which

a manufacturer sells tobacco products to a distributor, or the established list

price for which a wholesaler or distributor sells tobacco products to the last

distributor, before the allowance of any discounts, trade allowances, rebates

or other reductions.  Surcharges added by manufacturers or distributors are

considered part of the wholesale price subject to tax.

1)         The

wholesale price for purposes of imposing the Tobacco Products Tax on the last

distributor is the invoice price at which tobacco products are sold by a

wholesaler or distributor to the last distributor before the allowance of any

discounts, trade allowances, rebates, or other reductions.  Surcharges added by

distributors are considered part of the wholesale price subject to tax

1)         The

wholesale price for purposes of imposing the Tobacco Products Tax on the last

distributor is the invoice price at which tobacco products are sold by a

wholesaler or distributor to the last distributor before the allowance of any

discounts, trade allowances, rebates, or other reductions.  Surcharges added by

distributors are considered part of the wholesale price subject to tax.

2)         The

wholesale price for purposes of imposing the tax on a retailer who receives or

purchases tobacco products on which the tax has not been paid or will not be

paid by a licensed distributor is the invoice price paid by the retailer to an

unlicensed distributor or other supplier of tobacco products before the

allowance of any discounts, trade allowances, rebates or other reductions.

Surcharges added by manufacturers, distributors or other suppliers are

considered part of the wholesale price subject to tax.

3)         The

wholesale price for purposes of imposing tax on a manufacturer of a tobacco

product who sells the tobacco product directly to consumers is the cost to the

manufacturer to manufacture the tobacco product.  When determining its cost,

the time period used for purpose of the study should be long enough to include

all costs incurred by the manufacturer to manufacture the product.

f)         Whenever

any sales invoice issued by a supplier to a retailer for tobacco products sold

to the retailer does not comply with the requirements of Section 660.25(d), (e),

and (g), a prima facie presumption shall arise that the tax imposed by Section

10-10 of the Act and this Section has not been paid on the tobacco 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

tax, penalties, and interest

comply with the requirements of Section 660.25(d), (e),

and (g), a prima facie presumption shall arise that the tax imposed by Section

10-10 of the Act and this Section has not been paid on the tobacco 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

tax, penalties, and interest.

g)

Beginning

July 1, 2013

, all moneys received by the Department under the Act

from

the tax imposed on little cigars shall be distributed

as provided in

Section 2 of the

Cigarette Tax Act.

[35 ILCS 143/10-10]