SB3828 104TH GENERAL ASSEMBLY

LRB104 16359 HLH 29746 b

104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3828

Introduced 2/6/2026, by Sen. Robert F. Martwick

SYNOPSIS AS INTRODUCED:

35 ILCS 128/1-15
35 ILCS 128/1-20
35 ILCS 128/1-40
35 ILCS 128/1-105
35 ILCS 130/4	from Ch. 120, par. 453.4
35 ILCS 130/4a	from Ch. 120, par. 453.4a
35 ILCS 130/4b	from Ch. 120, par. 453.4b
35 ILCS 130/4c
35 ILCS 130/4f
35 ILCS 130/4g
35 ILCS 130/4i
35 ILCS 130/6	from Ch. 120, par. 453.6
35 ILCS 130/21	from Ch. 120, par. 453.21
35 ILCS 130/9c rep.
35 ILCS 135/4	from Ch. 120, par. 453.34
35 ILCS 135/4b
35 ILCS 135/6	from Ch. 120, par. 453.36
35 ILCS 135/7	from Ch. 120, par. 453.37
35 ILCS 135/7a
35 ILCS 135/27	from Ch. 120, par. 453.57
35 ILCS 143/10-20
35 ILCS 143/10-21
35 ILCS 143/10-25
35 ILCS 143/10-58

Amends the Cigarette Machine Operators' Occupation Tax Act, the Cigarette Tax Act, the Cigarette Use Tax Act, and the Tobacco Products Tax Act of 1995. Makes changes concerning applications for various licenses under those Acts. Provides that, beginning on July 1, 2027, applicants are no longer required to file a bond with their application. Makes changes concerning persons who are prohibited from receiving those licenses. Makes changes concerning hearings regarding contraband cigarettes and the destruction of contraband cigarettes.

A BILL FOR

AN ACT concerning revenue.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Cigarette Machine Operators' Occupation Tax Act is amended by changing Sections 1-15, 1-20, 1-40, and 1-105 as follows:

(35 ILCS 128/1-15)

Sec. 1-15. Cigarette machine operator license. No person may engage in the business of operating a cigarette machine in this State on or after August 1, 2012 without first having obtained a license from the Department. Application for a license shall be made to the Department, by electronic means, in on a form furnished and prescribed by the Department. Each applicant for a license under this Section shall furnish the following information to the Department in on a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) (2) the address of the location at which the applicant proposes to engage in the business of operating a cigarette machine in this State; and

(C) (3) any other additional information the Department may reasonably require by its rules.

The annual license fee payable to the Department for each initial and renewal cigarette machine operator license is $250. Each applicant for a license shall pay that fee to the Department at the time of submitting an application for license to the Department.

Through June 30, 2027, every Every applicant who is required to procure a cigarette machine operator license shall file with his or her application a joint and several bond. Such bond shall be executed to the Department of Revenue, with good and sufficient surety or sureties residing or licensed to do business within the State of Illinois, in the amount of $2,500, conditioned upon the true and faithful compliance by the licensee with all of the provisions of this Act. Such bond, or a reissue thereof, or a substitute therefore, shall be kept in effect during the entire period covered by the license. On and after July 1, 2027, applicants are no longer required to file a bond with their application. The Department shall discharge any surety and shall release and return any bond provided to it by a taxpayer under this Section within 90 days after July 1, 2027.

A separate application for license shall be made and , a separate annual license fee paid, and a separate bond filed, for each place of business at which a person who is required to procure a cigarette machine operator license under this Section proposes to engage in business as a cigarette machine operator in Illinois under this Act.

The following are ineligible to receive a cigarette machine operator license under this Act:

(1) a person who is not of good character and reputation in the community in which he resides; the Department may consider whether the applicant has previously been convicted of a felony when determining whether the person is of good character and reputation, but, except as provided in paragraph (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in Section 4i of the Cigarette Tax Act, and after a hearing, if requested by the applicant, determines that the such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act for any reason; or

(4) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(5) a person, or any person who owns more than 15% of the ownership interests in an entity or a related party, who:

(A) owes, at the time of application, any delinquent cigarette taxes or tobacco taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) has had a license under this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or the Tobacco Products Tax Act of 1995 revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(B-5) manufactures cigarettes, whether in this State or outside of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement", as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 nor (ii) in full compliance with the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(C) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution, or manufactured for sale or distribution in the United States, any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(E) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

The Department, upon receipt of an application and , license fee, and bond in proper form from a person who is eligible to receive a cigarette machine operator license under this Act, shall issue to such applicant a license in a form as prescribed by the Department. That license shall permit the applicant to whom it is issued to engage in business as a cigarette machine operator at the place shown in his or her application. All licenses issued by the Department under this Section shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act. No license issued under this Section is transferable or assignable. Such license shall be conspicuously displayed in the place of business conducted by the licensee in Illinois under such license. No cigarette machine operator acquires any vested interest or compensable property right in a license issued under this Section Act.

A cigarette machine operator shall notify the Department of any change in the information contained in on the application form, including any change in ownership, and shall do so within 30 days after that change.

Every prior continuous compliance taxpayer shall be exempt from all requirements under this Section concerning the furnishing of bond as a condition precedent to his being authorized to engage in the business licensed under this Act. This exemption shall continue for each prior continuous compliance taxpayer until such time as he may be determined by the Department to be delinquent in the filing of any returns, or is determined by the Department (either through the Department's issuance of a final assessment which has become final under the Act, or by the taxpayer's filing of a return which admits tax to be due that is not paid) to be delinquent or deficient in the paying of any tax under this Act, at which time that taxpayer shall become subject to the bond requirements of this Section and, as a condition of being allowed to continue to engage in the business licensed under this Act, shall be required to furnish bond to the Department in such form as provided in this Section. The taxpayer shall furnish such bond for a period of 2 years, after which, if the taxpayer has not been delinquent in the filing of any returns, or delinquent or deficient in the paying of any tax under this Act, the Department may reinstate that person as a prior continuance compliance taxpayer. Any taxpayer who fails to pay an admitted or established liability under this Act may also be required by the Department to post bond or other acceptable security with the Department guaranteeing the payment of that admitted or established liability.

The Department shall discharge any surety and shall release and return any bond or security deposited, assigned, pledged, or otherwise provided to it by a taxpayer under this Section within 30 days after:

(1) that taxpayer becomes a prior continuous compliance taxpayer; or

(2) that taxpayer has ceased to collect receipts on which the taxpayer he is required to remit tax to the Department, has filed a final tax return, and has paid to the Department an amount sufficient to discharge the his remaining tax liability as determined by the Department under this Act. The Department shall make a final determination of the taxpayer's outstanding tax liability as expeditiously as possible after the his final tax return has been filed. If the Department cannot make the final determination within 45 days after receiving the final tax return, it shall so notify the taxpayer within that period, stating its reasons therefore.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after receiving notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 97-688, eff. 6-14-12.)

(35 ILCS 128/1-20)

Sec. 1-20. Revocation, cancellation, or suspension of license. The Department may, after notice and hearing as provided for by this Act, revoke, cancel, or suspend the license of any cigarette machine operator for the violation of any provision of this Act, or for noncompliance with the provisions of this Act, or for any noncompliance with any lawful rule or regulation promulgated by the Department under this Act, or because the licensee is determined to be ineligible for a cigarette machine operator's license for any one or more of the reasons provided for in Section 1-15 of this Act.

Any cigarette machine operator aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice in writing to the cigarette machine operator requesting the hearing that contains a statement of the charges preferred against the cigarette machine operator and that states the time and place fixed for the hearing. The Department shall hold the hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to the cigarette machine operator. In the absence of a written protest and request for a hearing within 20 days, the Department's decision shall become final without any further determination being made or notice given.

No license so revoked shall be reissued to any cigarette machine operator for a period of 6 months after the date of the final determination of such revocation. No license shall be reissued at all so long as the person who would receive the license is ineligible to receive a cigarette machine operator's license under this Act for any one or more of the reasons provided for in Section 1-15 of this Act.

The Department, upon complaint filed in the circuit court, may, by injunction, restrain any person who fails or refuses to comply with any of the provisions of this Act from acting as a cigarette machine operator in this State.

(Source: P.A. 97-688, eff. 6-14-12.)

(35 ILCS 128/1-40)

Sec. 1-40. Returns.

(a) Cigarette machine operators shall file a return and remit the tax imposed by Section 1-10 by the 15th day of each month covering the preceding calendar month. Each such return shall show: the quantity of cigarettes made or fabricated during the period covered by the return; the beginning and ending meter reading for each cigarette machine for the period covered by the return; the quantity of such cigarettes sold or otherwise disposed of during the period covered by the return; the brand family and manufacturer and quantity of tobacco products used to make or fabricate cigarettes by use of a cigarette machine; the license number of each distributor from whom tobacco products are purchased; the type and quantity of cigarette tubes purchased for use in a cigarette machine; the type and quantity of cigarette tubes used in a cigarette machine; and such other information as the Department may require. Information that the Department may reasonably require includes information related to the uniform regulation and taxation of cigarettes. All returns and supporting schedules required to be filed under this Section and all payments required to be made under this Section shall be by electronic means in the form prescribed by the Department.

Cigarette machine operators shall send a copy of those returns, together with supporting schedule data, to the Attorney General's Office by the 15th day of each month for the period covering the preceding calendar month.

(b) Cigarette machine operators may take a credit against any tax due under Section 1-10 of this Act for taxes imposed and paid under the Tobacco Products Tax Act of 1995 on tobacco products sold to a customer and used in a rolling machine located at the cigarette machine operator's place of business. To be eligible for such credit, the tobacco product must meet the requirements of subsection (a) of Section 1-25 of this Act. This subsection (b) is exempt from the provisions of Section 1-155 of this Act.

(c) If any payment provided for in this Section exceeds the cigarette machine operator's liabilities under this Act, as shown on an original return, the cigarette machine operator may credit such excess payment against liability subsequently to be remitted to the Department under this Act, in accordance with reasonable rules adopted by the Department.

(Source: P.A. 104-6, eff. 1-1-26.)

(35 ILCS 128/1-105)

Sec. 1-105. Hearings regarding seized cigarettes and cigarette machines. After seizing any cigarettes or cigarette machines, as provided in Section 1-100 of this Act, the Department shall hold a hearing and shall determine whether such cigarettes, at the time of their seizure by the Department, were contraband cigarettes, or whether such cigarette machines, at the time of their seizure by the Department, contained or made contraband cigarettes. The Department is not required to hold such a hearing if a waiver and consent to forfeiture has been executed by (i) the owner of the property, if the owner is known, and (ii) the person in whose possession the property was found, if the person in whose possession the property was found is known and if that person is not the owner of the property. The Department shall give not less than 7 days' notice of the time and place of such hearing to the owner of such property, if he is known, and also to the person in whose possession the property so taken was found, if such person is known and if such person in possession is not the owner of said property. In case neither the owner nor the person in possession of such property is known, the Department shall cause publication of the time and place of such hearing to be made at least once in each week for 3 weeks successively in a newspaper of general circulation in the county where such hearing is to be held.

If, as the result of such hearing, the Department determines that the cigarettes seized were, at the time of seizure, contraband cigarettes, or that any cigarette machine at the time of its seizure contained or made contraband cigarettes, or upon receipt of a properly executed waiver and consent to forfeiture as provided in this Section, the Department shall enter an order declaring such cigarettes or such cigarette machine confiscated and forfeited to the State, and to be held by the Department for disposal as provided in this Section. The Department shall give notice of such order to the owner of such property if he is known, and also to the person in whose possession the property so taken was found, if such person is known, and if such person in possession is not the owner of the property. In case neither the owner nor the person in possession of such property is known, the Department shall cause publication of such order to be made at least once in each week for 3 weeks successively in a newspaper of general circulation in the county where such hearing was held.

When any cigarettes or any cigarette machine shall have been declared forfeited to the State by the Department, as provided hereunder, and when all proceedings for the judicial review of the Department's decision have terminated, the Department shall, to the extent that its decision is sustained on review, destroy or maintain and use such property in an undercover capacity.

The cost of destruction shall be assessed against the owner of the forfeited property or the person in possession of the forfeited property. Those costs shall be assessed regardless of whether the forfeiture is determined by hearing or waiver.

Any person aggrieved by any decision of the Department under this Section may, within 20 days after receiving notice of the decision, protest to the Department and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice of the time and place fixed for the hearing to the person requesting the hearing and shall hold a hearing in conformity with the provisions of this Act. After the hearing has concluded, the Department shall issue its final administrative decision in the matter to the person. In the absence of a protest and request for a hearing within the 20-day period set forth in this paragraph, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 97-688, eff. 6-14-12.)

Section 10. The Cigarette Tax Act is amended by changing Sections 4, 4a, 4b, 4c, 4f, 4g, 4i, 6, 9c, and 21 as follows:

(35 ILCS 130/4) (from Ch. 120, par. 453.4)

Sec. 4. Distributor's license.

(a) No person may engage in business as a distributor of cigarettes in this State within the meaning of the first 2 definitions of distributor in Section 1 of this Act without first having obtained a license therefor from the Department. Application for license shall be made to the Department, by electronic means, in a form as furnished and prescribed by the Department. Each applicant for a license under this Section shall furnish to the Department in a on the form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following information:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the (a) The name and address of the applicant;

(B) the (b) The address of the location at which the applicant proposes to engage in business as a distributor of cigarettes in this State; and

(C) such (c) Such other additional information as the Department may reasonably lawfully require by its rules and regulations.

The annual license fee payable to the Department for the initial and each renewal distributor's license shall be $250. The purpose of the initial and renewal such annual license fee is to defray the cost, to the Department, of serializing cigarette tax stamps. Each applicant for license shall pay such fee to the Department at the time of submitting the his application for license to the Department.

Through June 30, 2027, every Every applicant who is required to procure a distributor's license shall file with his application a joint and several bond. Such bond shall be executed to the Department of Revenue, with good and sufficient surety or sureties residing or licensed to do business within the State of Illinois, in the amount of $2,500, conditioned upon the true and faithful compliance by the licensee with all of the provisions of this Act. Such bond, or a reissue thereof, or a substitute therefor, shall be kept in effect during the entire period covered by the license. On and after July 1, 2027, applicants are no longer required to file a bond with their application. The Department shall discharge any surety and shall release and return any bond provided to it by a taxpayer under this Section within 90 days after July 1, 2027.

A separate application for license shall be made and , a separate annual license fee paid, and a separate bond filed, for each place of business at which a person who is required to procure a distributor's license under this Section proposes to engage in business as a distributor in Illinois under this Section Act.

(b) The following are ineligible to receive a distributor's license under this Section Act:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider whether the person has previously been convicted of a felony when determining whether the person is of good character and reputation, past conviction of a felony but, except as provided in paragraph (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any federal Federal or State law, if the Department, after investigation and a hearing and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in Section 4i of this Act, and after a hearing, if requested by the applicant, determines that the such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act for any reason;

(4) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(5) a person, or any person who owns more than 15% 15 percent of the ownership interests in a person or a related party who:

(A) (a) owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) (b) had a license under this Act, the Cigarette Use Tax Act, the Tobacco Products Tax Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 two years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) (c) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS 168/10 and 30 ILCS 167/10); nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);

(D) (d) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(E) (e) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(F) (f) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

(c) The Department, upon receipt of an application and , license fee and bond in proper form, from a person who is eligible to receive a distributor's license under this Section, Act, shall issue to such applicant a license. That in form as prescribed by the Department, which license shall permit the applicant to which it is issued to engage in business as a distributor at the place shown in the his application. All licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act. No license issued under this Section Act is transferable or assignable. Such license shall be conspicuously displayed in the place of business conducted by the licensee in Illinois under such license. No distributor licensee acquires any vested interest or compensable property right in a license issued under this Section Act.

A licensed distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership and shall do so within 30 days after any such change.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 100-286, eff. 1-1-18.)

(35 ILCS 130/4a) (from Ch. 120, par. 453.4a)

Sec. 4a. If a distributor shall be convicted of the violation of any of the provisions of this Act, or if the distributor's his or her license shall be revoked and no review is had of the order or revocation, or if on review thereof the decision is adverse to the distributor, or if a distributor fails to pay an assessment as to which no judicial review is sought and which has become final, or pursuant to which, upon review thereof, the circuit court has entered a judgment that is in favor of the Department and that has become final, the bond filed pursuant to this Act shall thereupon be forfeited, and the Department may institute a suit upon such bond in its own name for the entire amount of such bond and costs. Such suit upon the bond shall be in addition to any other remedy provided for herein.

This Section is repealed on January 1, 2028.

(Source: P.A. 96-1027, eff. 7-12-10.)

(35 ILCS 130/4b) (from Ch. 120, par. 453.4b)

Sec. 4b. Distributor's permit; cigarettes in original packages contained inside a sealed transparent wrapper.

(a) The Department may, in its discretion, upon application, issue permits authorizing the payment of the tax herein imposed 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 this subsection 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 such permit shall extend only to cigarettes which such permittee manufacturer places in original packages that are contained inside a sealed transparent wrapper. Applications for permits shall be made to the Department, by electronic means, in a form prescribed by the Department. Such permits shall be issued without charge in such form as the Department may prescribe and shall not be transferable or assignable.

Each applicant for a permit under this Section shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) the address of the location at which the applicant proposes to engage in business; and

(C) such other additional information as the Department may reasonably require by its rules.

The following are ineligible to receive a distributor's permit under this subsection:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider whether the person has previously been convicted of a felony when determining whether the person is of good character and reputation, past conviction of a felony but, except as provided in paragraph (2), the conviction shall not operate as an absolute bar to receiving a permit;

(2) a person who has been convicted of a felony under any federal Federal or State law, if the Department, after investigation, and a hearing and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those in Section 4i of this Act, and after a hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a permit is sought;

(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 such corporation, would not be eligible to receive a permit under this Act for any reason.

(4) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(5) a person, or any person who owns more than 15% of the ownership interests in a person or a related party who:

(A) owes, at the time of application, any delinquent taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) had a license under this Act, the Cigarette Use Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the 2 years immediately preceding the application by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(E) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(F) has been found by the Department, after notice and a hearing, to have made a materially false statement in the application or has failed to produce records required to be maintained by this Act.

There is no application fee for the initial and renewal permits. A permittee shall notify the Department of any change in the information contained on the application form, including any change in ownership and shall do so within 30 days after any the change. The permit shall not be transferable or assignable. A permittee does not acquire any vested interest or compensable property right in a permit issued under this subsection.

Any person aggrieved by any decision of the Department under this subsection may, within 30 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 days, the Department's decision shall become final without any further determination being made or notice given.

With respect to cigarettes which come within the scope of such a permit and which any such permittee delivers or causes to be delivered in Illinois to licensed distributors, such permittee shall remit the tax imposed by this Act at the times provided for in Section 3 of this Act. Each such remittance shall be accompanied by a return filed with the Department in on a form to be prescribed and furnished by the Department and shall disclose such information as the Department may lawfully require. Information that the Department may lawfully require includes information related to the uniform regulation and taxation of cigarettes. All returns and supporting schedules required to be filed under this Section and all payments required to be made under this Section shall be by electronic means in the form prescribed by the Department. Each such return shall be accompanied by a copy of each invoice rendered by the permittee to any licensed distributor to whom the permittee delivered cigarettes of the type covered by the permit (or caused cigarettes of the type covered by the permit to be delivered) in Illinois during the period covered by such return.

Such permit may be suspended, canceled, or revoked when, at any time, the Department considers that the security given is inadequate, or that such tax can more effectively be collected from distributors located in this State, or whenever the permittee violates any provision of this Act or any lawful rule or regulation issued by the Department pursuant to this Act or is determined to be ineligible for a distributor's permit under this Act as provided in this subsection Section, whenever the permittee shall notify the Department in writing of his desire to have the permit canceled. The Department shall have the power, in its discretion, to issue a new permit after such suspension, cancellation or revocation, except when the person who would receive the permit is ineligible to receive a distributor's permit under this Act.

All permits issued by the Department under this subsection Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act provided.

(b) Out-of-state cigarette manufacturers who are not required to be licensed as distributors of cigarettes in this State and who do not elect to obtain approval under subsection 4b(a) to pay the tax imposed by this Act, but who elect to qualify under this subsection Act as distributors of cigarettes in this State for purposes of shipping and delivering unstamped original packages of cigarettes into this State to licensed distributors, shall obtain a permit from the Department. Application for a permit shall be made to the Department, by electronic means, in a form prescribed by the Department. These permits shall be issued without charge in such form as the Department may prescribe and shall not be transferable or assignable.

Each applicant for a permit under this Section shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(A) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(B) the following information:

(i) the name and address of the applicant;

(ii) the address of the location at which the applicant proposes to engage in business; and

(iii) such other additional information as the Department may reasonably require by its rules.

The following are ineligible to receive a distributor's permit under this subsection:

(1) a person who is not of good character and reputation in the community in which the person he or she resides; the Department may consider whether the person has previously been convicted of a felony when determining whether the person is of good character and reputation, past conviction of a felony but, except as provided in paragraph (2), the conviction shall not operate as an absolute bar to receiving a permit;

(2) a person who has been convicted of a felony under any federal or State law, if the Department, after investigation and a hearing and consideration of mitigating factors and evidence of rehabilitation contained in the applicant's record, including those set forth in Section 4i of this Act, determines that the person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a permit is sought; and

(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 the corporation, would not be eligible to receive a permit under this Act for any reason.

With respect to original packages of cigarettes that such permittee delivers or causes to be delivered in Illinois and distributes to the public for promotional purposes without consideration, the permittee shall pay the tax imposed by this Act by remitting the amount thereof to the Department by the 5th day of each month covering cigarettes shipped or otherwise delivered in Illinois for those purposes during the preceding calendar month. The permittee, before delivering those cigarettes or causing those cigarettes to be delivered in this State, shall evidence his or her obligation to remit the taxes due with respect to those cigarettes by imprinting language to be prescribed by the Department on each original package of cigarettes, in such place thereon and in such manner also to be prescribed by the Department. The imprinted language shall acknowledge the permittee's payment of or liability for the tax imposed by this Act with respect to the distribution of those cigarettes.

With respect to cigarettes that the permittee delivers or causes to be delivered in Illinois to Illinois licensed distributors or distributed to the public for promotional purposes, the permittee shall, by the 5th day of each month, file with the Department, a report covering cigarettes shipped or otherwise delivered in Illinois to licensed distributors or distributed to the public for promotional purposes during the preceding calendar month on a form to be prescribed and furnished by the Department and shall disclose such other information as the Department may lawfully require. Information that the Department may lawfully require includes information related to the uniform regulation and taxation of cigarettes. All reports and supporting schedules required to be filed under this Section shall be filed electronically in the form prescribed by the Department. Each such report shall be accompanied by a copy of each invoice rendered by the permittee to any purchaser to whom the permittee delivered cigarettes of the type covered by the permit (or caused cigarettes of the type covered by the permit to be delivered) in Illinois during the period covered by such report.

Such permit may be suspended, canceled, or revoked whenever the permittee violates any provision of this Act or any lawful rule or regulation issued by the Department pursuant to this Act, is determined to be ineligible for a distributor's permit under this Act as provided in this Section, or notifies the Department in writing of his or her desire to have the permit canceled. The Department shall have the power, in its discretion, to issue a new permit after such suspension, cancellation, or revocation, except when the person who would receive the permit is ineligible to receive a distributor's permit under this Act.

All permits issued by the Department under this Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act.

(Source: P.A. 103-592, eff. 1-1-25; 104-6, eff. 1-1-26.)

(35 ILCS 130/4c)

Sec. 4c. Secondary distributor's license.

(a) No person may engage in business as a secondary distributor of cigarettes in this State without first having obtained a license therefor from the Department. Application for license shall be made to the Department, by electronic means, in on a form as furnished and prescribed by the Department. Each applicant for a license under this Section shall furnish the following information to the Department in on a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) (2) the address of the location at which the applicant proposes to engage in business as a secondary distributor of cigarettes in this State; and

(C) (3) such other additional information as the Department may reasonably require by its rule.

The annual license fee payable to the Department for the initial and each renewal secondary distributor's license shall be $250. Each applicant for a license shall pay such fee to the Department at the time of submitting an application for license to the Department.

A separate application for license shall be made and separate annual license fee paid for each place of business at which a person who is required to procure a secondary distributor's license under this Section proposes to engage in business as a secondary distributor in Illinois under this Act.

(b) The following are ineligible to receive a secondary distributor's license under this Section Act:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider prior past conviction of a felony but, except as provided in item (2), the conviction shall not operate as an absolute bar to licensure receiving a license;

(2) a person who has been convicted of a felony under any federal or State law, if the Department, after investigation, and a hearing and consideration of any the mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in subsection (b) of Section 4i of this Act, and hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act for any reason;

(4) a person who manufactures cigarettes, whether in this State or out of this State and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(5) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(6) a person, or any person who owns more than 15% of the ownership interests in a person or a related party who:

(A) owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) had a license under this Act, the Cigarette Use Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 two years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(E) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

The Department, upon receipt of an application and license fee from a person who is eligible to receive a secondary distributor's license under this Section Act, shall issue to such applicant a license in such form as prescribed by the Department. The license shall permit the applicant to which it is issued to engage in business as a secondary distributor at the place shown in the his application. All licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act.

No license issued under this Section Act is transferable or assignable. Such license shall be conspicuously displayed in the place of business conducted by the licensee in Illinois under such license. No secondary distributor licensee acquires any vested interest or compensable property right in a license issued under this Act.

A licensed secondary distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 100-286, eff. 1-1-18.)

(35 ILCS 130/4f)

Sec. 4f. Manufacturer representatives.

(a) No manufacturer may market cigarettes produced by the manufacturer directly to retailers in this State issued a license under Section 4g of this Act without first having obtained authorization from the Department. Application for authority to maintain representatives in this State to market in this State cigarettes produced by the manufacturer shall be made to the Department, by electronic means, in on a form furnished and prescribed by the Department. Each applicant under this Section shall furnish the following information to the Department in on a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) (2) the address of every location from which the applicant proposes to engage in business in this State;

(C) (3) the number of manufacturer representatives the applicant requests to maintain in this State; and

(D) (4) such any other additional information as the Department may reasonably require by its rule.

(a-5) The following manufacturers are ineligible to receive authorization to maintain manufacturer representatives in this State:

(1) a manufacturer who owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the applicant has entered into an agreement approved by the Department to pay the amount due;

(2) a manufacturer who has had a license revoked within the past 2 years for misconduct relating to stolen or contraband cigarettes or has been convicted of a state or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(3) a manufacturer who manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(3.5) a manufacturer who has been found, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(4) a manufacturer who has been found, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.);

(5) a manufacturer who has been found, after notice and a hearing, to have made a materially material false statement in an application or has failed to produce records required to be maintained by this Act;

(6) a manufacturer who has been found, after notice and hearing, to have violated any Section of this Act; or

(7) a manufacturer licensed as a distributor under Section 4 of this Act or holding a permit under Section 4b of this Act; or

(8) a manufacturer who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003.

The Department, upon receipt of an application from a manufacturer who is eligible to maintain manufacturer representatives in this State, shall notify the applicant in writing, not more than 60 days after an application has been received, that the applicant may or may not maintain the requested number of manufacturer representatives in this State. A copy of the notice authorizing a manufacturer to maintain manufacturer representatives in this State shall be available for inspection by the Department at each place of business identified in the application and in the motor vehicle operated by marketing representatives in the course of performing their his or her duties in this State on behalf of the manufacturer.

A manufacturer representative shall notify the Department of any change in the information contained on the application form and shall do so within 30 days after any such change.

(b) Only directors, officers, and employees of the manufacturer may act as manufacturer representatives in this State. The manufacturer shall provide to the Department the names and addresses of the manufacturer representatives operating in this State and the make, model, and license plate number of each motor vehicle operated by a manufacturer representative in the course of performing his or her duties in this State on behalf of the manufacturer. The following individuals may not act as manufacturer representatives:

(1) an individual who is not of good character and reputation in the community in which the individual resides; the Department may consider prior conviction of a felony, but the conviction shall not operate as an absolute bar to licensure;

(1.5) an individual who owes any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the individual has entered into an agreement approved by the Department to pay the amount due;

(2) an individual who has had a license under this Act, the Cigarette Use Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years for misconduct relating to stolen or contraband cigarettes or has been convicted of a state or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(3) an individual who has been found, after notice and a hearing, to have made a materially material false statement in an application or has failed to produce records required to be maintained by this Act; or

(4) an individual who has been found, after notice and hearing, to have violated any Section of this Act.

(c) Manufacturer representatives may sell to retailers in this State who are licensed under Section 4g of this Act only original packages of cigarettes made, manufactured, or fabricated by the manufacturer and purchased or obtained from a distributor licensed under this Act, or the Cigarette Tax Use Act, and on which tax stamps have been affixed. Manufacturer representatives may sell up to 600 stamped original packages of cigarettes in a calendar year, for the purpose of promoting the manufacturer's brands of cigarettes. A manufacturer representative may not possess more than 500 stamped original packages of cigarettes made, manufactured, or fabricated by the manufacturer and purchased or obtained from a distributor licensed under this Act or the Cigarette Use Tax Act. Any original packages of cigarettes in the possession of a manufacturer representative that (i) are not made, manufactured, or fabricated by the manufacturer and purchased or obtained from a distributor licensed under this Act or the Cigarette Use Tax Act, other than cigarettes for personal use and consumption, (ii) exceed the maximum quantity of 500 original packages of cigarettes, excluding packages of cigarettes for personal use and consumption; (iii) violate Section 3-10 of this Act; or (iv) do not have the proper tax stamps affixed, are contraband and subject to seizure and forfeiture.

Manufacturer representatives may sell, on behalf of licensed distributors, stamped original packages of cigarettes to retailers who are licensed under Section 4g of this Act. The manufacturer representative shall provide the distributor with a signed receipt for the cigarettes obtained from the distributor. The distributor shall invoice the licensed retailer, and the licensed retailer shall pay the distributor for all cigarettes provided to licensed retailers by manufacturer representatives on behalf of a distributor.

Manufacturer representatives may sell stamped original packages of cigarettes to licensed retailers that are purchased from licensed distributors. Distributors shall provide manufacturer representatives with invoices for stamped original packages of cigarettes sold to manufacturer representatives. Manufacturer representatives shall invoice licensed retailers, and the licensed retailers shall pay the manufacturer representatives for all original packages of cigarettes sold to licensed retailers.

(d) Authorizations issued under this Section shall be valid for a period not to exceed one year after issuance, and may be renewed thereafter, unless sooner revoked, canceled, or suspended as provided in this Act. There is no application fee for the initial and renewal authorization under this Section. Such authorization shall not be transferable or assignable. A person does not acquire any vested interest or compensable property right in an authorization issued under this Section.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 97-587, eff. 8-26-11; 98-1055, eff. 1-1-16.)

(35 ILCS 130/4g)

Sec. 4g. Retailer's license.

(a) Beginning on January 1, 2016, no person may engage in business as a retailer of cigarettes in this State without first having obtained a license from the Department. Application for license shall be made to the Department, by electronic means, in a form prescribed by the Department. Each applicant for a license under this Section shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following information:

(1) the name and address of the applicant;

(2) the address of the location at which the applicant proposes to engage in business as a retailer of cigarettes in this State; and

(3) such other additional information as the Department may lawfully require by its rules and regulations.

The annual license fee payable to the Department for each retailer's license shall be $75. The fee shall be deposited into the Tax Compliance and Administration Fund and shall be for the cost of tobacco retail inspection and contraband tobacco and tobacco smuggling with at least two-thirds of the money being used for contraband tobacco and tobacco smuggling operations and enforcement.

Each applicant for a license shall pay the fee to the Department at the time of submitting its application for a license to the Department. The Department shall require an applicant for a license under this Section to electronically file and pay the fee.

A separate annual license fee shall be paid for each place of business at which a person who is required to procure a retailer's license under this Section proposes to engage in business as a retailer in Illinois under this Act.

(b) The following are ineligible to receive a retailer's license under this Section Act:

(1) a person who has been convicted of a felony related to the illegal transportation, sale, or distribution of cigarettes, or a tobacco-related felony, under any federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in Section 4i of the Act, and a hearing if requested by the applicant, determines that the person has not been sufficiently rehabilitated to warrant the public trust; or

(2) 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 such corporation, would not be eligible to receive a license under this Act for any reason; a limited liability company, if any member or managing member would not be eligible to receive a license under this Act for any reason; a partnership, if any partner would not be eligible to receive a license under this Act for any reason.

(c) The Department, upon receipt of an application and license fee, in proper form, from a person who is eligible to receive a retailer's license under this Section Act, shall issue to such applicant a license in form as prescribed by the Department. That license shall permit the applicant to whom it is issued to engage in business as a retailer under this Act at the place shown in the his or her application. All licenses issued by the Department under this Section shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act. No license issued under this Section is transferable or assignable. The license shall be conspicuously displayed in the place of business conducted by the licensee in Illinois under such license.

A licensed retailer shall notify the Department of any change in the information contained on the application form, including any change in ownership and shall do so within 30 days after the change.

The Department shall not issue a retailer's license to a retailer unless the retailer is also registered under the Retailers' Occupation Tax Act. A person who obtains a license as a retailer who ceases to do business as specified in the license, or who never commenced business, or whose license is suspended or revoked, shall immediately surrender the license to the Department.

Any person aggrieved by any decision of the Department under this Section may, within 30 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give written notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 98-1055, eff. 1-1-16; 99-78, 7-20-15; 99-192, eff. 1-1-16.)

(35 ILCS 130/4i)

Sec. 4i. Applicant convictions.

(a) The Department shall not require applicants to report the following information and shall not consider the following criminal history records in connection with an application for a license or permit under this Act:

(1) Juvenile adjudications of delinquent minors as defined in Section 5-105 of the Juvenile Court Act of 1987, subject to the restrictions set forth in Section 5-130 of the Juvenile Court Act of 1987.

(2) Law enforcement records, court records, and conviction records of an individual who was 17 years old at the time of the offense and before January 1, 2014, unless the nature of the offense required the individual to be tried as an adult.

(3) Records of arrest not followed by a conviction.

(4) Convictions overturned by a higher court.

(5) Convictions or arrests that have been sealed or expunged.

(b) The Department, upon a finding that an applicant for a license or permit was previously convicted of a felony under any federal or State law, shall consider any mitigating factors and evidence of rehabilitation contained in the applicant's record, including any of the following factors and evidence, to determine if the applicant has been sufficiently rehabilitated and whether a prior conviction will impair the ability of the applicant to engage in the position for which a license or permit is sought:

(1) the lack of direct relation of the offense for which the applicant was previously convicted to the duties, functions, and responsibilities of the position for which a license or permit is sought;

(2) whether 5 years since a felony conviction or 3 years since release from confinement for the conviction, whichever is later, have passed without a subsequent conviction;

(3) if the applicant was previously licensed or employed in this State or other states or jurisdictions, then the lack of prior misconduct arising from or related to the licensed position or position of employment;

(4) the age of the person at the time of the criminal offense;

(5) successful completion of sentence and, for applicants serving a term of parole or probation, a progress report provided by the applicant's probation or parole officer that documents the applicant's compliance with conditions of supervision;

(6) evidence of the applicant's present fitness and professional character;

(7) evidence of rehabilitation or rehabilitative effort during or after incarceration, or during or after a term of supervision, including, but not limited to, a certificate of good conduct under Section 5-5.5-25 of the Unified Code of Corrections or a certificate of relief from disabilities under Section 5-5.5-10 of the Unified Code of Corrections; and

(8) any other mitigating factors that contribute to the person's potential and current ability to perform the duties and responsibilities of the position for which a license, permit or employment is sought.

(c) If the Department refuses to issue a license or permit to an applicant, then the Department shall notify the applicant of the denial in writing with the following included in the notice of denial:

(1) a statement about the decision to refuse to issue a license or permit;

(2) a list of the convictions that the Department determined will impair the applicant's ability to engage in the position for which a license or permit is sought;

(3) a list of convictions that formed the sole or partial basis for the refusal to issue a license or permit; and

(4) (blank). a summary of the appeal process or the earliest the applicant may reapply for a license, whichever is applicable.

(d) No later than May 1 of each year, the Department must prepare, publicly announce, and publish a report of summary statistical information relating to new and renewal license or permit applications during the preceding calendar year. Each report shall show, at a minimum:

(1) the number of applicants for a new or renewal license or permit under this Act within the previous calendar year;

(2) the number of applicants for a new or renewal license or permit under this Act within the previous calendar year who had any criminal conviction;

(3) the number of applicants for a new or renewal license or permit under this Act in the previous calendar year who were granted a license or permit;

(4) the number of applicants for a new or renewal license or permit with a criminal conviction who were granted a license or permit under this Act within the previous calendar year;

(5) the number of applicants for a new or renewal license or permit under this Act within the previous calendar year who were denied a license or permit; and

(6) the number of applicants for a new or renewal license or permit with a criminal conviction who were denied a license or permit under this Act in the previous calendar year in whole or in part because of a prior conviction.

(Source: P.A. 100-286, eff. 1-1-18.)

(35 ILCS 130/6) (from Ch. 120, par. 453.6)

Sec. 6. Revocation, cancellation, or suspension of license.

(a) The Department may, after notice and hearing as provided for by this Act, revoke, cancel or suspend the license of any distributor, secondary distributor, or retailer:

(1) for the violation of any provision of this Act, or for noncompliance with any provision herein contained, or for any noncompliance with any lawful rule or regulation promulgated by the Department under Section 8 of this Act, or

(2) because the licensee is determined to be ineligible for a distributor's license for any one or more of the reasons provided for in Section 4 of this Act, or

(3) because the licensee is determined to be ineligible for a secondary distributor's license for any one or more of the reasons provided for in Section 4c of this Act, or

(4) because the licensee is determined to be ineligible for a retailer's license for any one or more of the reasons provided for in Section 4g of this Act.

However, no such license shall be revoked, cancelled or suspended, except after a hearing by the Department with notice to the distributor, secondary distributor, or retailer, as aforesaid, and affording such distributor, secondary distributor, or retailer a reasonable opportunity to appear and defend, and any distributor, secondary distributor, or retailer aggrieved by any decision of the Department with respect thereto may have the determination of the Department judicially reviewed, as herein provided.

(b) The Department may revoke, cancel, or suspend the license of any distributor for a violation of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 as provided in Section 30 of that Act. The Department may revoke, cancel, or suspend the license of any secondary distributor for a violation of subsection (e) of Section 15 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003.

(c) If the retailer has a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 3 days the license of that retailer for a fourth or subsequent violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a) of Section 2 of that Act. For the purposes of this Section, any violation of subsection (a) of Section 2 of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act occurring at the retailer's licensed location during a 24-month period shall be counted as a violation against the retailer.

(d) If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 3 days the license of that retailer for a second violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 7 days the license of that retailer for a third violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 30 days the license of a retailer for a fourth or subsequent violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

A training program that facilitates compliance with minimum-age tobacco laws must include at least the following elements: (i) it must explain that only individuals displaying valid identification demonstrating that they are 21 years of age or older shall be eligible to purchase cigarettes or tobacco products and (ii) it must explain where a clerk can check identification for a date of birth. The training may be conducted electronically. Each retailer that has a training program shall require each employee who completes the training program to sign a form attesting that the employee has received and completed tobacco training. The form shall be kept in the employee's file and may be used to provide proof of training.

(e) Any distributor, secondary distributor, or retailer aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice in writing to the distributor, secondary distributor, or retailer requesting the hearing that contains a statement of the charges preferred against the distributor, secondary distributor, or retailer and that states the time and place fixed for the hearing. The Department shall hold the hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to the distributor, secondary distributor, or retailer. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(f) No license so revoked, as aforesaid, shall be reissued to any such distributor, secondary distributor, or retailer within a period of 6 months after the date of the final determination of such revocation. No such license shall be reissued at all so long as the person who would receive the license is ineligible to receive a distributor's license under this Act for any one or more of the reasons provided for in Section 4 of this Act, is ineligible to receive a secondary distributor's license under this Act for any one or more of the reasons provided for in Section 4c of this Act, or is determined to be ineligible for a retailer's license under the Act for any one or more of the reasons provided for in Section 4g of this Act.

The Department upon complaint filed in the circuit court may by injunction restrain any person who fails, or refuses, to comply with any of the provisions of this Act from acting as a distributor, secondary distributor, or retailer of cigarettes in this State.

(Source: P.A. 104-6, eff. 6-16-25.)

(35 ILCS 130/21) (from Ch. 120, par. 453.21)

Sec. 21. Destruction or use of forfeited property.

(a) When any original packages of cigarettes or any cigarette vending device shall have been declared forfeited to the State by the Department, as provided in Section 18a of this Act, and when all proceedings for the judicial review of the Department's decision have terminated, the Department shall, to the extent that its decision is sustained on review, destroy or maintain and use such property in an undercover capacity.

(b) The Department may, prior to any destruction of cigarettes, permit the true holder of the trademark rights in the cigarette brand to inspect such contraband cigarettes in order to assist the Department in any investigation regarding such cigarettes.

(c) The cost of destruction shall be assessed against the owner or the person in possession of the forfeited property. That cost shall be assessed regardless of whether the forfeiture is determined by hearing or waiver.

(d) Any person aggrieved by any decision of the Department under this Section may, within 20 days after receiving notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 20 days, the Department's decision shall become final without any further determination being made or notice given. If a hearing has already been set pursuant to Section 18a or Section 6 of this Act, all issues related to the cost of destruction shall be heard simultaneously

(Source: P.A. 94-776, eff. 5-19-06; 95-1053, eff. 1-1-10.)

(35 ILCS 130/9c rep.)

Section 15. The Cigarette Tax Act is amended by repealing Section 9c.

Section 20. The Cigarette Use Tax Act is amended by changing Sections 4, 4b, 6, 7, 7a, and 27 as follows:

(35 ILCS 135/4) (from Ch. 120, par. 453.34)

Sec. 4. Distributor's license.

(a) A distributor maintaining a place of business in this State, if required to procure a license or allowed to obtain a permit as a distributor under the Cigarette Tax Act, need not obtain an additional license or permit under this Section Act, but shall be deemed to be sufficiently licensed or registered by virtue of his being licensed or registered under the Cigarette Tax Act.

Every distributor maintaining a place of business in this State, if not required to procure a license or allowed to obtain a permit as a distributor under the Cigarette Tax Act, shall make an a verified application to the Department, by electronic means, in (upon a form prescribed and furnished by the Department) for a license to act as a distributor under this Section. Each applicant for a license under this Section shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following: Act. In completing such application, the applicant shall furnish such information as the Department may reasonably require

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) the address of the location at which the applicant proposes to engage in business as a distributor of cigarettes in this State; and

(C) such other additional information as the Department may reasonably require by its rules.

The annual license fee payable to the Department for each initial and renewal distributor's license shall be $250. The purpose of such initial and renewal annual license fees fee is to defray the cost, to the Department, of serializing cigarette tax stamps. The applicant for license shall pay such fee to the Department at the time of submitting the application for license to the Department.

Through June 30, 2027, such Such applicant shall file, with the his application, a joint and several bond. Such bond shall be executed to the Department of Revenue, with good and sufficient surety or sureties residing or licensed to do business within the State of Illinois, in the amount of $2,500, conditioned upon the true and faithful compliance by the licensee with all of the provisions of this Act. Such bond, or a reissue thereof, or a substitute therefor, shall be kept in effect during the entire period covered by the license. Beginning July 1, 2027, applicants are no longer required to file a bond with their application. The Department shall discharge any surety and shall release and return any bond provided to it by a taxpayer under this Section within 90 days after July 1, 2027.

A separate application for license shall be made and , a separate annual license fee paid, and a separate bond filed, for each place of business at or from which the applicant proposes to act as a distributor under this Section Act and for which the applicant is not required to procure a license or allowed to obtain a permit as a distributor under the Cigarette Tax Act.

(b) The following are ineligible to receive a distributor's license under this Section Act:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider prior conviction of a felony but, except as provided in item (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any federal Federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in Section 4i of the Cigarette Tax Act, and a hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license hereunder for any reason;

(4) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(5) a person, or any person who owns more than 15% 15 percent of the ownership interests in a person or a related party who:

(A) (a) owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) (b) had a license under this Act, the Cigarette Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) (c) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS 168/10 and 30 ILCS 167/10); nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS 168/ and 30 ILCS 167/);

(D) (d) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(E) (e) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(F) (f) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

(c) Upon receipt approval of an such application and bond and payment of the required annual license fee from a person who is eligible to receive a distributor's license under this Section, , the Department shall issue a license to the applicant. Such license shall permit the applicant to engage in business as a distributor at or from the place shown in the his application. All licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as in this Act provided. No license issued under this Section Act is transferable or assignable. Such license shall be conspicuously displayed at the place of business for which it is issued.

No distributor licensee acquires any vested interest or compensable property right in a license issued under this Section Act.

A licensed distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 95-1053, eff. 1-1-10; 96-782, eff. 1-1-10.)

(35 ILCS 135/4b)

Sec. 4b. Secondary distributor's license.

(a) No person may engage in business as a secondary distributor of cigarettes in this State without first having obtained a license therefor from the Department. A secondary distributor maintaining a place of business within this State, if required to procure a license as a secondary distributor under the Cigarette Tax Act, need not obtain an additional license or permit under this Section Act, but shall be deemed to be sufficiently licensed or registered by virtue of his being licensed or registered under the Cigarette Tax Act.

Every secondary distributor maintaining a place of business in this State, if not required to procure a license under the Cigarette Tax Act, shall make application for a license, by electronic means, in on a form as furnished and prescribed by the Department. Such applicant shall furnish the following information to the Department in on a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the name and address of the applicant;

(B) (2) the address of the location at which the applicant proposes to engage in business as a secondary distributor of cigarettes in this State; and

(C) (3) such other additional information as the Department may reasonably require by its rules.

The annual license fee payable to the Department for initial and each renewal secondary distributor's license shall be $250. The applicant for license shall pay such fee to the Department at the time of submitting the application for license to the Department.

A separate application for license shall be made and a separate annual license fee paid, for each place of business at or from which the applicant proposes to act as a secondary distributor under this Section Act and for which the applicant is not required to procure a license as a secondary distributor under the Cigarette Tax Act.

(b) The following are ineligible to receive a secondary distributor's license under this Section Act:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider prior conviction of a felony, but except as provided in item (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any Federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those in Section 4i of the Cigarette Tax Act, and a hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act hereunder for any reason;

(4) a person who manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(5) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(6) a person, or any person who owns more than 15% 15 percent of the ownership interests in a person or a related party who:

(A) owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) had a license under this Act, or the Cigarette Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(E) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

(c) The Department, upon receipt of an Upon approval of such application and payment of the required annual license fee, from a person who is eligible to receive a secondary distributor's license under this Section, the Department shall issue a license to the applicant. Such license shall permit the applicant to engage in business as a secondary distributor at or from the place shown in the his application. All licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled or suspended as provided in this Act provided. No license issued under this Section Act is transferable or assignable. Such license shall be conspicuously displayed at the place of business for which it is issued.

No secondary distributor licensee acquires any vested interest or compensable property right in a license issued under this Section Act.

A licensed secondary distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 96-1027, eff. 7-12-10.)

(35 ILCS 135/6) (from Ch. 120, par. 453.36)

Sec. 6. Revocation, cancellation, or suspension of license.

(a) The Department may, after notice and hearing as provided for by this Act, revoke, cancel or suspend the license of any distributor or secondary distributor for the violation of any provision of this Act, or for non-compliance with any provision herein contained, or for any non-compliance with any lawful rule or regulation promulgated by the Department under Section 21 of this Act, or because the licensee is determined to be ineligible for a distributor's license for any one or more of the reasons provided for in Section 4 of this Act, or because the licensee is determined to be ineligible for a secondary distributor's license for any one or more of the reasons provided for in Section 4b or Section 7a of this Act. However, no such license shall be revoked, canceled or suspended, except after a hearing by the Department with notice to the distributor or secondary distributor, as aforesaid, and affording such distributor or secondary distributor a reasonable opportunity to appear and defend, and any distributor or secondary distributor aggrieved by any decision of the Department with respect thereto may have the determination of the Department judicially reviewed, as herein provided.

(b) The Department may revoke, cancel, or suspend the license of any distributor for a violation of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 as provided in Section 30 of that Act. The Department may revoke, cancel, or suspend the license of any secondary distributor for a violation of subsection (e) of Section 15 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003.

(c) Any distributor or secondary distributor aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice in writing to the distributor or secondary distributor requesting the hearing that contains a statement of the charges preferred against the distributor or secondary distributor and that states the time and place fixed for the hearing. The Department shall hold the hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to the distributor or secondary distributor. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

No license so revoked, shall be reissued to any such distributor or secondary distributor within a period of 6 months after the date of the final determination of such revocation. No such license shall be reissued at all so long as the person who would receive the license is ineligible to receive a distributor's license under this Act for any one or more of the reasons provided for in Section 4 of this Act or is ineligible to receive a secondary distributor's license under this Act for any one or more of the reasons provided for in Section 4b and Section 7a of this Act.

The Department upon complaint filed in the circuit court may by injunction restrain any person who fails, or refuses, to comply with this Act from acting as a distributor or secondary distributor of cigarettes in this State.

(Source: P.A. 104-6, eff. 6-16-25.)

(35 ILCS 135/7) (from Ch. 120, par. 453.37)

Sec. 7. Distributor's permits.

(a) Cigarettes in original packages contained inside a sealed transparent wrapper.

(1) The Department may, in its discretion, upon application, issue permits authorizing the collection of the tax herein imposed by those 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 this subsection Act as distributors of cigarettes in this State, and who, to the satisfaction of the Department, furnish adequate security to insure collection and payment of the tax, provided that any such permit shall extend only to cigarettes which such permittee manufacturer places in original packages that are contained inside a sealed transparent wrapper, and provided that no such permit shall be issued under this subsection Act to such a manufacturer who has obtained the permit provided for in Section 4b(a) of the Cigarette Tax Act. Application for a permit shall be made to the Department, by electronic means, in a form prescribed by the Department. Each applicant for a permit under this subsection shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following: Such distributor shall be issued, without charge, a permit to collect such tax in such manner, and subject to such reasonable regulations and agreements as the Department shall prescribe

(A) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(B) the following information:

(i) the name and address of the applicant;

(ii) the address of the location at which the applicant proposes to engage in business; and

(iii) such other additional information as the Department may reasonably require by its rules.

When so authorized, it shall be the duty of such distributor to collect the tax upon all cigarettes which the distributor he delivers (or causes to be delivered) within this State to licensed distributors, in the same manner and subject to the same requirements as a distributor maintaining a place of business within this State. Such permit shall be in such form as the Department may prescribe and shall not be transferable or assignable.

(2) The following are ineligible to receive a distributor's permit under this subsection Act:

(A) (1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider prior conviction of a felony, but, except as provided in item (B), the conviction shall not operate as an absolute bar to licensure;

(B) (2) a person who has been convicted of a felony under any federal Federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those provided in Section 4i of the Cigarette Tax Act, and a hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(C) (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 such corporation, would not be eligible to receive a permit under this Act for any reason;

(D) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(E) a person, or any person who owns more than 15% of the ownership interests in a person or a related party who:

(i) owes, at the time of application, any delinquent taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(ii) had a license under this Act, the Cigarette Use Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(iii) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(iv) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(v) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(vi) has been found by the Department, after notice and a hearing, to have made a materially false statement in the application or has failed to produce records required to be maintained by this Act.

(3) There is no application fee for the initial and renewal permits. A permittee shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change. Such permit shall not be transferable or assignable. A permittee does not acquire any vested interest or compensable property right in a permit issued under this subsection.

With respect to cigarettes which come within the scope of such a permit and which any such permittee delivers or causes to be delivered in Illinois to licensed distributors, such permittee shall collect the tax imposed by this Act and shall remit such tax to the Department by the 5th day of each month for the preceding calendar month. Each such remittance shall be accompanied by a return filed with the Department in on a form to be prescribed and furnished by the Department and shall disclose such information as the Department may lawfully require. Information that the Department may lawfully require includes information related to the uniform regulation and taxation of cigarettes. All returns and supporting schedules required to be filed under this subsection and all payments required to be made under this subsection shall be by electronic means in the form prescribed by the Department The Department may promulgate rules to require that the permittee's return be accompanied by appropriate computer-generated magnetic media supporting schedule data in the format prescribed by the Department, unless, as provided by rule, the Department grants an exception upon petition of the permittee. Each such return shall be accompanied by a copy of each invoice rendered by the permittee to any licensed distributor to whom the permittee delivered cigarettes of the type covered by the permit (or caused cigarettes of the type covered by the permit to be delivered) in Illinois during the period covered by such return.

Such authority and permit may be suspended, canceled, or revoked when, at any time, the Department considers that the security given is inadequate, or that such tax can more effectively be collected from the person using such cigarettes in this State or through distributors located in this State, or whenever the permittee violates any provision of this Act or any lawful rule or regulation issued by the Department pursuant to this Act or is determined to be ineligible for a distributor's permit under this Act as provided in this Section, or whenever the permittee shall notify the Department in writing of his desire to have the permit canceled. The Department shall have the power, in its discretion, to issue a new permit after such suspension, cancellation, or revocation, except when the person who would receive the permit is ineligible to receive a distributor's permit under this Act.

All permits issued by the Department under this subsection Act shall be valid for not to exceed one year after issuance unless sooner revoked, canceled or suspended as in this Act provided.

(b) Unstamped original packages of cigarettes for distribution to the public for promotional purposes without consideration.

(1) Out-of-state cigarette manufacturers who are not required to be licensed as distributors of cigarettes in this State and who do not elect to obtain approval under subsection (a) to pay the tax imposed by this Act, but who elect to qualify under this Act as distributors of cigarettes in this State for purposes of shipping and delivering unstamped original packages of cigarettes into this State to licensed distributors, shall obtain a permit from the Department, provided that no such permit shall be issued under this subsection to a manufacturer who has obtained the permit provided for in Section 4b(b) of the Cigarette Tax Act. These permits shall be issued without charge in such form as the Department may prescribe and shall not be transferable or assignable.

Application for permit shall be made to the Department, by electronic means, in a form prescribed by the Department. Each applicant for a permit under this subsection shall furnish to the Department in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(A) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(B) the following information:

(i) the name and address of the applicant;

(ii) the address of the location at which the applicant proposes to engage in business; and

(iii) such other additional information as the Department may reasonably require by its rules.

(2) The following are ineligible to receive a distributor's permit under this subsection:

(A) (1) a person who is not of good character and reputation in the community in which he or she resides;

(B) (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 the person has not been sufficiently rehabilitated to warrant the public trust; and

(C) (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 the corporation, would not be eligible to receive a permit under this Act for any reason;

(D) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 (30 ILCS 167/25); or

(E) a person, or any person who owns more than 15% of the ownership interests in a person or a related party who:

(i) owes, at the time of application, any delinquent taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(ii) had a license under this Act, the Cigarette Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(iii) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(iv) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(v) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(vi) has been found by the Department, after notice and a hearing, to have made a materially false statement in the application or has failed to produce records required to be maintained by this Act.

(3) There is no application fee for the initial and renewal permits. A permittee shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change. Such permit shall not be transferable or assignable. A permittee does not acquire any vested interest or compensable property right in a permit issued under this subsection.

With respect to original packages of cigarettes such permittee delivers or causes to be delivered in Illinois and distributed to the public for promotional purposes without consideration, the permittee shall pay the tax imposed by this Act by remitting the amount thereof to the Department by the 5th day of each month covering cigarettes shipped or otherwise delivered in Illinois for those purposes during the preceding calendar month. The permittee, before delivering those cigarettes or causing those cigarettes to be delivered in this State, shall evidence the his or her obligation to remit the taxes due with respect to those cigarettes by imprinting language to be prescribed by the Department on each original package of cigarettes, in such place thereon and in such manner also to be prescribed by the Department. The imprinted language shall acknowledge the permittee's payment of or liability for the tax imposed by this Act with respect to the distribution of those cigarettes.

With respect to cigarettes such permittee delivers or causes to be delivered in Illinois to Illinois licensed distributors or distributed to the public for promotional purposes, the permittee shall, by the 5th day of each month, file with the Department, a report covering cigarettes shipped or otherwise delivered in Illinois to licensed distributors or distributed to the public for promotional purposes during the preceding calendar month on a form to be prescribed and furnished by the Department and shall disclose such other information as the Department may lawfully require. Information that the Department may lawfully require includes information related to the uniform regulation and taxation of cigarettes. All reports required to be filed under this subsection and all payments required to be made under this subsection shall be by electronic means in the form prescribed by the Department The Department may promulgate rules to require that the permittee's report be accompanied by appropriate computer-generated magnetic media supporting schedule data in the format prescribed by the Department, unless, as provided by rule, the Department grants an exception upon petition of the permittee. Each such report shall be accompanied by a copy of each invoice rendered by the permittee to any purchaser to whom the permittee delivered cigarettes of the type covered by the permit (or caused cigarettes of the type covered by the permit to be delivered) in Illinois during the period covered by such report.

Such permit may be suspended, canceled, or revoked whenever the permittee violates any provision of this Act or any lawful rule or regulation issued by the Department pursuant to this Act, is determined to be ineligible for a distributor's permit under this Act as provided in this subsection Section, or notifies the Department in writing of his or her desire to have the permit canceled. The Department shall have the power, in its discretion, to issue a new permit after such suspension, cancellation, or revocation, except when the person who would receive the permit is ineligible to receive a distributor's permit under this Act.

All permits issued by the Department under this subsection Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as in this Act provided.

Any person aggrieved by any decision of the Department under this subsection may, within 30 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 96-782, eff. 1-1-10.)

(35 ILCS 135/7a)

Sec. 7a. Discretionary secondary distributor's license.

(a) The Department may, in its discretion, upon application, issue a secondary distributor's license to persons who are not required to be licensed as secondary distributors of cigarettes in this State, but who elect to qualify under this Section Act as discretionary secondary distributors of cigarettes. Such discretionary secondary distributor shall be issued, without charge, a license to make sales for resale to Illinois retailers, subject to such reasonable requirements as the Department shall prescribe. Each applicant for a license under this Section shall furnish the following information to the Department, by electronic means, in on a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) (a) the name and address of the applicant;

(B) (b) the address of the location at which the applicant proposes to engage in business as a discretionary secondary distributor of cigarettes; and

(C) (c) such other additional information as the Department may reasonably require by its rules.

A separate application for license shall be made for each place of business at or from which the applicant proposes to act as a discretionary secondary distributor under this Section Act and for which the applicant is not required to procure a license as a secondary distributor under the Cigarette Tax Act or Cigarette Use Tax Act.

(b) The following are ineligible to receive a discretionary secondary distributor's license under this Section Act:

(1) a person who is not of good character and reputation in the community in which the person he resides; the Department may consider prior conviction of a felony, but, except as provided in item (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any federal Federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those in Section 4i of the Cigarette Tax Act, and a hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act hereunder for any reason;

(4) a person who manufactures cigarettes, whether in this State or out of this State and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(5) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(6) a person, or any person who owns more than 15% 15 percent of the ownership interests in a person or a related party who:

(A) owes, at the time of application, any delinquent cigarette taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) had a license under this Act, or the Cigarette Tax Act, the Tobacco Products Act of 1995, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(E) has been found by the Department, after notice and a hearing, to have made a materially material false statement in the application or has failed to produce records required to be maintained by this Act.

(c) The Department, upon receipt of application from a person who is eligible to receive a discretionary secondary distributor's license under this Section, Upon approval of such application, the Department shall issue a license to the applicant. Such license shall permit the applicant to engage in business as a discretionary secondary distributor at or from the place shown in the his application. There is no application fee for the initial and renewal permits. All licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as in this Act provided. No license issued under this Section Act is transferable or assignable. Such license shall be conspicuously displayed at the place of business for which it is issued.

No discretionary secondary distributor licensee acquires any vested interest or compensable property right in a license issued under this Section Act.

A licensed discretionary secondary distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership, and shall do so within 30 days after any such change.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 20 days, the Department's decision shall become final without any further determination being made or notice given.

Such authority and license may be suspended, canceled, or revoked whenever the licensee violates any provision of this Act or any lawful rule or regulation issued by the Department pursuant to this Act or is determined to be ineligible for a discretionary secondary distributor's permit under this Act as provided in this Section, or whenever the licensee shall notify the Department in writing of his desire to have the license canceled. The Department shall have the power, in its discretion, to issue a new license after such suspension, cancellation, or revocation, except when the person who would receive the license is ineligible to receive a discretionary secondary distributor's license under this Section Act.

(Source: P.A. 96-1027, eff. 7-12-10.)

(35 ILCS 135/27) (from Ch. 120, par. 453.57)

Sec. 27. Destruction or use of forfeited property.

(a) When any original packages of cigarettes or any cigarette vending device shall have been declared forfeited to the State by the Department, as provided in Section 25 of this Act, and when all proceedings for the judicial review of the Department's decision have terminated, the Department shall, to the extent that its decision is sustained on review, destroy or maintain and use such property in an undercover capacity.

(b) The Department may, prior to any destruction of cigarettes, permit the true holder of the trademark rights in the cigarette brand to inspect such contraband cigarettes, in order to assist the Department in any investigation regarding such cigarettes.

(c) The cost of destruction shall be assessed against the owner or the person in possession of the forfeited property. Such cost shall be assessed regardless of whether the forfeiture is determined by hearing or waiver.

(d) Any person aggrieved by any decision of the Department under this Section may, within 20 days after receiving notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 20 days, the Department's decision shall become final without any further determination being made or notice given. If a hearing has already been set pursuant to Section 25 or Section 6 of this Act, all issues related to the cost of destruction shall be heard simultaneously.

(Source: P.A. 94-776, eff. 5-19-06; 95-1053, eff. 1-1-10.)

Section 25. The Tobacco Products Tax Act of 1995 is amended by changing Sections 10-20, 10-21, 10-25, and 10-58 as follows:

(35 ILCS 143/10-20)

Sec. 10-20. Distributor's licenses.

(a) It shall be unlawful for any person to engage in business as a distributor of tobacco products within the meaning of this Act without first having obtained a license to do so from the Department. Application for that license shall be made to the Department, by electronic means, in a form prescribed and furnished by the Department. Each applicant for a license shall furnish to the Department in on a form, signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department,, the following information:

(1) a statement that the applicant will fully comply with the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; and

(2) the following information:

(A) the The name and address of the applicant; .

(B) the (2) The address of the location at which the applicant proposes to engage in business as a distributor of tobacco products; and .

(C) such other additional (3) Other information as the Department may reasonably require by its rules.

Each distributor, except for a distributor who is applying for a distributor's license under this Act for the first time or a distributor who, in the preceding year, had less than $50,000 of tax liability, shall also file with the Department a bond in an amount not to exceed (i) 3 times the amount of the distributor's average monthly tax liability or (ii) $50,000, whichever amount is lower, on a form to be approved by the Department. The Department shall fix the amount of the bond for each applicant, taking into consideration the amount of money expected to become due from the applicant under this Act. The amount of bond required by the Department shall be an amount that, in its opinion, will protect the State of Illinois against failure to pay the amount that may become due from the applicant under this Act. Except as otherwise provided in this Section, the bond, a reissue, or a substitute shall be kept in full force and effect during the entire period covered by the license. A separate application for license shall be made, and bond filed, for each place of business at which a person who is required to procure a distributor's license proposes to engage in business as a distributor under this Act.

(b) The following are ineligible to receive a distributor's license under this Section:

(1) a person who is not of good character and reputation in the community in which the person resides; the Department may consider prior conviction of a felony but, except as provided in item (2), the conviction shall not operate as an absolute bar to licensure;

(2) a person who has been convicted of a felony under any federal or State law, if the Department, after investigation and consideration of any mitigating factors and evidence of rehabilitation contained in the applicant's record, including those in Section 4i of the Cigarette Tax Act, and hearing, if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust and the conviction will impair the ability of the person to engage in the position for which a license is sought;

(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 such corporation, would not be eligible to receive a license under this Act for any reason;

(4) a person who has delinquent reports under Section 25 of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; or

(5) a person, or any person who owns more than 15% of the ownership interests in a person or a related party who:

(A) owes, at the time of application, any delinquent taxes that have been determined by law to be due and unpaid under this Act or any other tax Act administered by the Department, unless the license applicant has entered into an agreement approved by the Department to pay the amount due;

(B) had a license under this Act, the Cigarette Tax Act, the Cigarette Use Tax Act, or the Cigarette Machine Operator's Occupation Tax Act revoked within the past 2 years by the Department for misconduct relating to stolen or contraband cigarettes or has been convicted of a State or federal crime, punishable by imprisonment of one year or more, relating to stolen or contraband cigarettes;

(C) manufactures cigarettes, whether in this State or out of this State, and who is neither (i) a participating manufacturer as defined in subsection II(jj) of the "Master Settlement Agreement" as defined in Sections 10 of the Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003; nor (ii) in full compliance with Tobacco Products Manufacturers' Escrow Act and the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003;

(D) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution any cigarette in violation of 19 U.S.C. 1681a;

(E) has been found by the Department, after notice and a hearing, to have imported or caused to be imported into the United States for sale or distribution or manufactured for sale or distribution in the United States any cigarette that does not fully comply with the Federal Cigarette Labeling and Advertising Act (15 U.S.C. 1331, et seq.); or

(F) has been found by the Department, after notice and a hearing, to have made a materially false statement in the application or has failed to produce records required to be maintained by this Act.

(c) The Department, upon receipt of an application and bond, if required, in proper form, from a person who is eligible to receive a distributor's license shall issue to the the applicant a license, in a form prescribed by the Department. The license , which shall allow permit the applicant to whom it is issued to engage in business as a distributor at the place shown on the his or her application. The license shall be issued by the Department without charge or cost to the applicant. No license issued under this Section Act is transferable or assignable. The license shall be conspicuously displayed in the place of business conducted by the licensee under the license. No distributor licensee acquires any vested interest or compensable property right in a license issued under this Section.

Licenses issued by the Department under this Section Act shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled, or suspended as provided in this Act.

A licensed distributor shall notify the Department of any change in the information contained on the application form, including any change in ownership and shall do so within 30 days after any such change No license shall be issued to any person who is in default to the State of Illinois for moneys due under this Act or any other tax Act administered by the Department.

The Department shall discharge any surety and shall release and return any bond provided to it by a taxpayer under this Section within 90 days after:

(1) the taxpayer becomes a prior continuous compliance taxpayer; or

(2) the taxpayer has ceased to collect receipts on which the taxpayer is required to remit the tax under this Act to the Department, has filed a final tax return, and has paid to the Department an amount sufficient to discharge his remaining tax liability as determined by the Department under this Act.

For the purposes of item (2), the Department shall make a final determination of the taxpayer's outstanding tax liability as expeditiously as possible after the taxpayer's final tax return under this Act has been filed. If the Department will be unable to make such a final determination within 45 days after receiving the taxpayer's final tax return, then the Department shall notify the taxpayer within that 45-day period stating the reasons why it is unable to make the final determination within that 45-day period.

The Department may, in its discretion, upon application, authorize the payment of the tax imposed under Section 10-10 by any distributor or manufacturer not otherwise subject to the tax imposed under this Act who, to the satisfaction of the Department, furnishes adequate security to ensure payment of the tax. The distributor or manufacturer shall be issued, without charge, a license to remit the tax. When so authorized, it shall be the duty of the distributor or manufacturer to remit the tax imposed upon the wholesale price of tobacco products sold or otherwise disposed of to retailers or consumers located in this State, in the same manner and subject to the same requirements as any other distributor or manufacturer licensed under this Act.

The Department may revoke, suspend, or cancel the license of a distributor of roll-your-own tobacco, ( as that term is used in Section 10 of the Tobacco Product Manufacturers' Escrow Act, ) under this Act if the tobacco product manufacturer, as defined in Section 10 of the Tobacco Product Manufacturers' Escrow Act, that made or sold the roll-your-own tobacco has failed to become a participating manufacturer, as defined in subdivision (a)(1) of Section 15 of the Tobacco Product Manufacturers' Escrow Act, or has failed to create a qualified escrow fund for any roll-your-own tobacco manufactured by the tobacco product manufacturer and sold in this State or otherwise failed to bring itself into compliance with subdivision (a)(2) of Section 15 of the Tobacco Product Manufacturers' Escrow Act.

Any applicant applying for a distributor's license after the applicant's distributor's license has been revoked by the Department shall also file a bond with the Department in an amount equal to 3 times the amount of the applicant's average monthly tax liability under this Act, as that average monthly tax liability was calculated immediately prior to the revocation of the applicant's distributor's license.

Any person aggrieved by any decision of the Department under this Section may, within 30 20 days after notice of the that decision, protest and request a hearing, whereupon the Department must give notice to that person of the time and place fixed for the hearing and must hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of such a protest within 30 20 days, the Department's decision becomes final without any further determination being made or notice given.

(Source: P.A. 103-1001, eff. 8-9-24; 103-1055, eff. 12-20-24.)

(35 ILCS 143/10-21)

Sec. 10-21. Retailer's license. Beginning on January 1, 2016, no person may engage in business as a retailer of tobacco products in this State without first having obtained a license from the Department. Application for license shall be made to the Department, by electronic means, in a form prescribed by the Department. Each applicant for a license under this Section shall furnish to the Department, in a form signed and verified by the applicant under penalty of perjury, in an electronic format established by the Department, the following information:

(1) the name and address of the applicant;

(2) the address of the location at which the applicant proposes to engage in business as a retailer of tobacco products in this State;

(3) such other additional information as the Department may reasonably lawfully require by its rules and regulations.

The annual license fee payable to the Department for each retailer's license shall be $150. The fee will be deposited into the Tax Compliance and Administration Fund and shall be used for the cost of tobacco retail inspection and contraband tobacco and tobacco smuggling with at least two-thirds of the money being used for contraband tobacco and tobacco smuggling operations and enforcement.

Each applicant for license shall pay such fee to the Department at the time of submitting its application for license to the Department. The Department shall require an applicant for a license under this Section to electronically file and pay the fee.

A separate application for license shall be made and a separate annual license fee shall be paid for each place of business at which a person who is required to procure a retailer's license under this Section proposes to engage in business as a retailer in Illinois under this Section Act.

The following are ineligible to receive a retailer's license under this Act:

(1) a person who has been convicted of a felony under any federal or State law for smuggling cigarettes or tobacco products or tobacco tax evasion, if the Department, after investigation and a hearing if requested by the applicant, determines that such person has not been sufficiently rehabilitated to warrant the public trust; and

(2) 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 such corporation, would not be eligible to receive a license under this Act for any reason; a limited liability company, if any member or managing member would not be eligible to receive a license under this Act for any reason; a partnership, if any partner would not be eligible to receive a license under this Act for any reason.

The Department, upon receipt of an application and license fee, in proper form, from a person who is eligible to receive a retailer's license under this Act, shall issue to such applicant a license in form as prescribed by the Department, which license shall permit the applicant to which it is issued to engage in business as a retailer under this Act at the place shown in the his application. All licenses issued by the Department under this Section shall be valid for a period not to exceed one year after issuance unless sooner revoked, canceled or suspended as provided in this Act. No license issued under this Section is transferable or assignable. Such license shall be conspicuously displayed in the place of business conducted by the licensee in Illinois under such license. No licensee acquires any vested interest or compensable property right in a license issued under this Section.

A licensed retailer shall notify the Department of any change in the information contained on the application form, including any change in ownership and shall do so within 30 days after any such change.

A person who obtains a license as a retailer who ceases to do business as specified in the license, or who never commenced business, or whose license is suspended or revoked, shall immediately surrender the license to the Department. The Department shall not issue a license to a retailer unless the retailer is also validly registered under the Retailers Occupation Tax Act.

A retailer as defined under this Act need not obtain an additional license under this Act, but shall be deemed to be sufficiently licensed by virtue of his being properly licensed as a retailer under Section 4g of the Cigarette Tax Act.

Any person aggrieved by any decision of the Department under this Section may, within 30 days after notice of the decision, protest and request a hearing. Upon receiving a request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 30 days, the Department's decision shall become final without any further determination being made or notice given.

(Source: P.A. 104-6, eff. 7-1-25.)

(35 ILCS 143/10-25)

Sec. 10-25. License actions.

(a) The Department may, after notice and a hearing, revoke, cancel, or suspend the license of any distributor or retailer who violates any of the provisions of this Act, fails to keep books and records as required under this Act, fails to make books and records available for inspection upon demand by a duly authorized employee of the Department, or violates a rule or regulation of the Department for the administration and enforcement of this Act. The notice shall specify the alleged violation or violations upon which the revocation, cancellation, or suspension proceeding is based.

(b) The Department may, after notice and hearing as provided for by this Act, revoke, cancel, or suspend the license of any distributor or retailer for the violation of any provision of this Act, or for noncompliance with the provisions of this Act, or for any noncompliance with any lawful rule promulgated by the Department under this Act, or because the licensee is determined to be ineligible for a distributor's license for any one or more of the reasons provided for in Section 10-20 of this Act, or because the licensee is determined to be ineligible for retailer's license for any one or more of the reasons provided for in Section 10-21 of this Act.

(b-5)The Department may revoke, cancel, or suspend the license of any distributor for a violation of the Tobacco Products Manufacturers' Escrow Enforcement Act of 2003 as provided in Section 30 of that Act.

(c) If the retailer has a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 3 days the license of that retailer for a fourth or subsequent violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a) of Section 2 of that Act. For the purposes of this Section, any violation of subsection (a) of Section 2 of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act occurring at the retailer's licensed location, during a 24-month period, shall be counted as a violation against the retailer.

If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 3 days the license of that retailer for a second violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 7 days the license of that retailer for a third violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

If the retailer does not have a training program that facilitates compliance with minimum-age tobacco laws, the Department shall suspend for 30 days the license of a retailer for a fourth or subsequent violation of the Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act, as provided in subsection (a-5) of Section 2 of that Act.

A training program that facilitates compliance with minimum-age tobacco laws must include at least the following elements: (i) it must explain that only individuals displaying valid identification demonstrating that they are 21 years of age or older shall be eligible to purchase cigarettes or tobacco products and (ii) it must explain where a clerk can check identification for a date of birth. The training may be conducted electronically. Each retailer that has a training program shall require each employee who completes the training program to sign a form attesting that the employee has received and completed tobacco training. The form shall be kept in the employee's file and may be used to provide proof of training.

(c-5) Any distributor or retailer aggrieved by any decision of the Department under this Section may, within 30 days after notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice in writing to the distributor or retailer requesting the hearing that contains a statement of the charges preferred against the distributor or retailer and that states the time and place fixed for the hearing. The Department shall hold the hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to the distributor or retailer. In the absence of a written protest and request for a hearing within 30 days, the Department's decision shall become final without any further determination being made or notice given.

(c-10) No license so revoked shall be reissued to any distributor or retailer for a period of 6 months after the date of the final determination of such revocation. No license shall be reissued at all so long as the person who would receive the license is ineligible to receive a distributor's license under this Act for any one or more of the reasons provided for in Section 10-20 of this Act or a retailer's license under this Act for any one or more of the reasons provided for in Section 10-21 of this Act.

(d) The Department may, by application to any circuit court, obtain an injunction restraining any person who engages in business as a distributor of tobacco products without a license (either because the his or her license has been revoked, canceled, or suspended or because of a failure to obtain a license in the first instance) from engaging in that business until that person, as if that person were a new applicant for a license, complies with all of the conditions, restrictions, and requirements of Section 10-20 of this Act and qualifies for and obtains a license. Refusal or neglect to obey the order of the court may result in punishment for contempt.

(e) The Department, upon complaint filed in the circuit court, may, by injunction, restrain any person who fails or refuses to comply with any of the provisions of this Act from acting as a distributor or retailer in this State.

(Source: P.A. 104-6, eff. 6-16-25.)

(35 ILCS 143/10-58)

Sec. 10-58. Sale of forfeited tobacco products or vending devices.

(a) When any tobacco products or any vending devices are declared forfeited to the State by the Department, as provided in Section 10-55, and when all proceedings for the judicial review of the Department's decision have terminated, the Department shall, to the extent that its decision is sustained on review, sell the property for the best price obtainable and shall forthwith pay over the proceeds of the sale to the State Treasurer. If the value of the property to be sold at any one time is $500 or more, however, the property shall be sold only to the highest and best bidder on terms and conditions, and on open competitive bidding after public advertisement, in a manner and for terms as the Department, by rule, may prescribe.

(b) If no complaint for review, as provided in Section 12 of the Retailers' Occupation Tax Act, has been filed within the time required by Law, and if no stay order has been entered under that Law, the Department shall proceed to destroy, maintain and use in an undercover capacity, or sell the property for the best price obtainable and shall forthwith pay over the proceeds of the sale to the State Treasurer. If the value of the property to be sold at any one time is $500 or more, however, the property shall be sold only to the highest and best bidder on terms and conditions, and on open competitive bidding after public advertisement, in a manner and for terms as the Department, by rule, may prescribe.

(c) Upon making a sale of tobacco products as provided in this Section, the Department shall affix a distinctive stamp to each of the tobacco products so sold indicating that they are sold under this Section.

(d) The cost of destruction shall be assessed against the owner or the person in possession of the forfeited property. Such cost shall be assessed regardless of whether the forfeiture is determined by hearing or waiver.

(e) Notwithstanding the foregoing, any tobacco products seized under this Act may, at the discretion of the Director of Revenue, be distributed to any eleemosynary institution within the State of Illinois.

(f) Any person aggrieved by any decision of the Department under this Section may, within 20 days after receiving notice of the decision, protest and request a hearing. Upon receiving a written request for a hearing, the Department shall give notice to the person requesting the hearing of the time and place fixed for the hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to that person. In the absence of a protest and request for a hearing within 20 days, the Department's decision shall become final without any further determination being made or notice given. If a hearing has already been set pursuant to Section 10-25 or Section 10-56 of this Act, all issues related to the cost of destruction shall be heard simultaneously.

(Source: P.A. 97-1129, eff. 8-28-12.)

Section 95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.