35 ILCS 143/10-10: Tax imposed.

(a) Except as otherwise provided in this Section with respect to little cigars, on the first day of the third month after the month in which this Act becomes law, a tax is imposed on any person engaged in business as a distributor of tobacco products, as defined in Section 10-5, at the rate of:

(1) 18% of the wholesale price of tobacco products sold or otherwise disposed of to retailers or consumers located in this State prior to July 1, 2012;

(2) 36% of the wholesale price of tobacco products sold or otherwise disposed of to retailers or consumers located in this State beginning on July 1, 2012 and through June 30, 2025; except that, beginning on January 1, 2013 and through June 30, 2025, the tax on moist snuff shall be imposed at a rate of $0.30 per ounce, and a proportionate tax at the like rate on all fractional parts of an ounce, sold or otherwise disposed of to retailers or consumers located in this State; and except that, beginning July 1, 2019 and through June 30, 2025, the tax on electronic cigarettes shall be imposed at the rate of 15% of the wholesale price of electronic cigarettes sold or otherwise disposed of to retailers or consumers located in this State; and

(3) 45% of the wholesale price of tobacco products, including moist snuff and electronic cigarettes, sold or otherwise disposed of to retailers or consumers located in this State on and after July 1, 2025 and through December 31, 2026; and

(4) beginning on January 1, 2027, 45% of:

(A) the actual cost paid by a distributor or remote retail seller for the tobacco product sold or otherwise disposed of to a retailer or consumer in the State; or

(B) if documentation of the actual cost paid by a distributor or remote retail seller is not available due to matters beyond the distributor or remote retail seller's control, the actual cost list paid by a distributor or remote retail seller for the tobacco product sold or otherwise disposed of to retailers or consumers located in this State for which documentation is not available.

The tax imposed under this subsection (a) is in addition to all other occupation or privilege taxes imposed by the State of Illinois, by any political subdivision thereof, or by any municipal corporation. However, the tax is not imposed upon any activity in that business in interstate commerce or otherwise, to the extent to which that activity may not, under the Constitution and Statutes of the United States, be made the subject of taxation by this State, and except that, beginning July 1, 2013, the tax on little cigars shall be imposed at the same rate, and the proceeds shall be distributed in the same manner, as the tax imposed on cigarettes under the Cigarette Tax Act. The tax is also not imposed on sales made to the United States or any entity thereof.

If the Department determines that the actual cost list for a tobacco product is not indicative of the actual cost paid for the tobacco product, then the Department may determine the distributor's or remote retail seller's tax liability for the tobacco product based on the distributor's or remote retail seller's books and records or from information on invoices obtained from the distributor's or remote retail seller's suppliers.

(a-5) Beginning January 1, 2027, the tax imposed under subsection (a) is also imposed upon persons who are engaged in business as remote retail sellers of cigars, pipe tobacco, or alternative nicotine products and who make sales to Illinois consumers on which the tax has not been paid by a distributor, if the cumulative gross receipts of the remote retail seller from sales of tangible personal property to consumers in this State are $100,000 or more.

A remote retail seller that meets or exceeds the threshold in this subsection shall be liable for taxes imposed by this Act on all sales made by that remote retail seller of taxable products under this Act to Illinois consumers on which the tax has not been paid by a distributor.

The remote retail seller shall determine on a quarterly basis, ending on the last day of March, June, September, and December, whether it meets the threshold of this subsection for the preceding 12-month period. If the remote retail seller meets the threshold for a 12-month period, then the remote retail seller is considered to be engaged in business as a remote retail seller in this State and is required to collect and remit the tax imposed under this Act and to file all applicable returns for the next 12-month period. At the end of that 12-month period, the remote retail seller shall determine whether the remote retail seller met the threshold for the preceding 12-month period. If the remote retail seller met the threshold for the preceding 12-month period, the remote retail seller is considered to be engaged in business as a remote retail seller in this State and is required to collect and remit the tax imposed under this Act and file returns for the subsequent year. If, at the end of a one-year period, a remote retail seller that was required to collect and remit the tax imposed under this Act determines that the remote retail seller did not meet the threshold during the preceding 12-month period, then the remote retail seller shall certify to the Department, in the form and manner required by the Department, that the remote retail seller did not meet the threshold during the preceding 12-month period and shall subsequently determine on a quarterly basis, ending on the last day of March, June, September, and December, whether the remote retail seller meets the threshold for the preceding 12-month period.

(b) Notwithstanding subsection (a) of this Section, stamping distributors of packages of little cigars containing 20 or 25 little cigars sold or otherwise disposed of in this State shall remit the tax by purchasing tax stamps from the Department and affixing them to packages of little cigars in the same manner as stamps are purchased and affixed to cigarettes under the Cigarette Tax Act, unless the stamping distributor sells or otherwise disposes of those packages of little cigars to another stamping distributor. Only persons meeting the definition of "stamping distributor" contained in Section 10-5 of this Act may affix stamps to packages of little cigars containing 20 or 25 little cigars. Stamping distributors may not sell or dispose of little cigars at retail to consumers or users at locations where stamping distributors affix stamps to packages of little cigars containing 20 or 25 little cigars.

(c) The impact of the tax levied by this Act is imposed upon distributors engaged in the business of selling tobacco products to retailers or consumers in this State. Beginning January 1, 2027, the impact of the tax levied by this Act is also imposed upon remote retail sellers that meet the threshold in subsection (a-5) of this Section. A remote retail seller shall pay the tax on all sales of cigars, pipe tobacco, and alternative nicotine products to consumers in this State on which the tax has not been paid by a distributor. Whenever a stamping distributor brings or causes to be brought into this State from without this State, or purchases from without or within this State, any packages of little cigars containing 20 or 25 little cigars upon which there are no tax stamps affixed as required by this Act, for purposes of resale or disposal in this State to a person not a stamping distributor, then such stamping distributor shall pay the tax to the Department and add the amount of the tax to the price of such packages sold by such stamping distributor. Payment of the tax shall be evidenced by a stamp or stamps affixed to each package of little cigars containing 20 or 25 little cigars.

Stamping distributors paying the tax to the Department on packages of little cigars containing 20 or 25 little cigars sold to other distributors, wholesalers or retailers shall add the amount of the tax to the price of the packages of little cigars containing 20 or 25 little cigars sold by such stamping distributors.

(d) Beginning on January 1, 2013, the tax rate imposed per ounce of moist snuff may not exceed 15% of the tax imposed upon a package of 20 cigarettes pursuant to the Cigarette Tax Act.

(d-5) Notwithstanding any other provision of this Section, beginning January 1, 2027 and continuing through December 31, 2029, the tax per cigar sold or otherwise disposed of shall not exceed $0.75 per cigar. This subsection does not apply to little cigars.

(e) All moneys received by the Department under this Act from sales occurring prior to July 1, 2012 shall be paid into the Long-Term Care Provider Fund of the State Treasury. Of the moneys received by the Department from sales occurring on or after July 1, 2012, except for moneys received from the tax imposed on the sale of little cigars, 50% shall be paid into the Long-Term Care Provider Fund and 50% shall be paid into the Healthcare Provider Relief Fund. Beginning July 1, 2013, all moneys received by the Department under this Act from the tax imposed on little cigars shall be distributed as provided in Section 2 of the Cigarette Tax Act. Of the moneys received by the Department under this Act from sales occurring on or after July 1, 2025, except for moneys received from the tax imposed on the sale of little cigars, the first $5,000,000 collected in each fiscal year shall be paid into the Tobacco Settlement Recovery Fund for tobacco health initiatives at the Department of Public Health, and the remainder of the moneys collected in each fiscal year shall be paid as follows: 50% shall be paid into the Long-Term Care Provider Fund; and 50% shall be paid into the Healthcare Provider Relief Fund.