Ill. Admin. Code tit. 86, § 440.50 - Tax Stamps - When and By Whom Affixed: License or Permit Required
a) The Department,
or any person authorized by the Department, will sell tax stamps only to
licensed distributors. It shall be unlawful for any person to engage in the
business as a distributor of cigarettes in this State without first having
obtained a license or permit from the Department. Application for a
distributor's license shall be made to the Department in form as furnished and
prescribed by the said Department and shall be accompanied by a joint and
several bond in the amount of $2,500. Except when the applicant is the
manufacturer or when the applicant is a person licensed as a distributor under
the Tobacco Products Tax Act of 1995 [35 ILCS 143 ] applying for a
distributor's license under the Act to qualify as a stamping distributor for
the purpose of acquiring and possessing untaxed little cigars and affixing tax
stamps to unstamped packages of little cigars containing 20 or 25 little
cigars, no distributor's license shall be issued to an applicant unless he
presents the Department with satisfactory proof in writing that he or she will
be able to buy cigarettes directly from at least 3 major cigarette
manufacturers. A person licensed as a distributor under the Tobacco Products
Tax Act of 1995 issued a distributor's license under the Act to qualify as a
stamping distributor for the purpose of acquiring and possessing untaxed little
cigars and affixing tax stamps to unstamped packages of little cigars
containing 20 or 25 little cigars is prohibited from acquiring, possessing or
affixing stamps to unstamped packages of cigarettes until the distributor
presents the Department with satisfactory proof in writing that he or she will
be able to buy cigarettes directly from at least 3 major cigarette
manufacturers. Each licensed place of business shall be covered by a separate
license.
b) The annual license fee
payable to the Department for each distributor's license shall be $250. The
purpose of the annual license fee is to defray the cost, to the Department, of
serializing cigarette tax stamps. Each applicant for license shall pay the fee
to the Department at the time of submitting his application for license to the
Department.
c) All licenses issued
by the Department under the Cigarette Tax Act shall be valid for not to exceed
one year after issuance unless sooner revoked, canceled or suspended as in the
Act provided.
d) The Department
may, in its discretion, upon application, issue permits authorizing the payment
of the tax imposed by the Act by out-of-State cigarette manufacturers who are
not required to be licensed as distributors of cigarettes in this State, but
who elect to qualify under the Act as distributors of cigarettes in this State,
and who, to the satisfaction of the Department, furnish adequate security to
insure payment of the tax, provided that any permit shall extend only to
cigarettes that the permittee manufacturer places in original packages that are
contained inside a sealed transparent wrapper.
e) All permits issued by the Department under
the Cigarette Tax Act shall be valid for not to exceed one year after issuance
unless sooner revoked, canceled or suspended as in the Act provided.
f)
The following are ineligible to
receive a distributor's license or permit under the Act:
1)
A person who is not of good
character and reputation in the community in which he
resides;
2)
A
person who has been convicted of a felony under any federal or State law, if
the Department, after investigation and a hearing, if requested by the
applicant, determines that person has not been sufficiently rehabilitated to
warrant the public trust;
3)
A corporation, if any officer,
manager or director thereof, or any stockholder or stockholders owning in the
aggregate more than 5%of the stock of that corporation, would
not be eligible to receive a license under the Act for any reason. [35
ILCS 130/4 and 4 b(a)]
g) The first distributor who delivers
cigarettes or causes them to be delivered in this State to a purchaser must
affix proper stamp or stamps to each original package of cigarettes before
delivering the cigarettes (or causing them to be delivered) in this State to
the purchaser, or (in the case of manufacturers of cigarettes in original
packages that are contained inside a sealed transparent wrapper) to imprint the
required language on the original package of cigarettes beneath the outside
wrapper, as provided in Section
440.20(b).
h) On and after July 22, 1999, 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 et seq.) 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 Tax
Act, the Department shall revoke the license of any
distributor that is determined to have violated this subsection (h).
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 that the label or notice has been removed, mutilated,
obliterated, or altered in any manner. (Section 3 of the Cigarette Tax
Act)
i) On and after August 15,
1999, packages of cigarettes, cigarette papers, wrappers, or tubes stamped or
imprinted in a manner not in accordance with subsection (h) 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 Cigarette Tax Act.
j) On and after September 1, 1999, packages
of cigarettes, cigarette papers, wrappers or tubes stamped or imprinted in a
manner not in accordance with subsection (h) 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 Cigarette Tax
Act.
k)
On and after June
13, 2000, no stamp or imprint may be affixed to, or made upon, any package of
cigarettes that:
1)
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;
2)
does
not comply with:
A)
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
B)
all federal trademark and
copyright laws;
3)
is imported into the United States
in violation of
26
USC 5754 or any other federal law or
implementing federal regulations;
4)
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;
5)
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 Cigarettes Labeling and Advertising Act (
15
USC 1335 a); or
6)
has been altered, prior to sale or
distribution to the ultimate consumer, so as to remove, conceal, or
obscure:
A)
any statement,
label, stamp, sticker, or notice described in subsection (k)(1) of this
Section; or
B)
any
health warning that is not specified in, or does not conform with the
requirements of, the federal Cigarette Labeling and Advertising Act (
15 USC
1333 ). (Section 3-10 of the
Act)
l) On
and after July 15, 2000, packages of cigarettes, cigarette papers, wrappers, or
tubes stamped or imprinted in a manner not in accordance with subsection (k)
and found in the possession of a distributor create a rebuttable presumption
that the package of cigarettes, cigarette papers, wrappers, or tubes were
stamped or imprinted in violation of the Cigarette Tax Act.
m) On and after July 31, 2000, packages of
cigarettes, cigarette papers, wrappers or tubes stamped or imprinted in a
manner not in accordance with subsection (k) and found in the possession of a
retailer create a rebuttable presumption that the packages of cigarettes,
cigarette papers, wrapper or tubes were stamped or imprinted by the distributor
from whom they were obtained in violation of the Cigarette Tax Act.
n)
On and after June 13, 2000, 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:
1)
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 and
Firearms;
2)
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 the cigarettes, the quantity of each brand style
of the cigarettes, the supplier of the cigarettes, and the person or persons,
if any, to whom the cigarettes have been conveyed for
resale;
3) in addition to
the statement required in subsection (n)(2), 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 the cigarettes;
4) in addition to the statement required in
subsections (n)(2) and (n)(3), 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
1335
a) with respect to the 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.
o)
The Department may revoke or
suspend the license or licenses of any distributor, in the manner provided in
Section 6 of the Cigarette Tax Act, if the Department determines that the
distributor knew or had reason to know that the distributor was committing any
the acts prohibited in subsection (k) or had failed to comply with any of the
requirements of subsection (l). 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 $5000. Cigarettes acquired,
held, owned, possessed, transported in, imported into, or sold or distributed
in this State in violation of subsection (k) shall be subject to seizure and
forfeiture whether the violation is knowing or otherwise. (Section
3-10 of the Act)
Notes
Amended at 27 Ill. Reg. 1618, effective January 15, 2003
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
No prior version found.