PCA

Illinois

Alerts & Updates

Key Contacts

Illinois Department of Revenue
Alcohol, Tobacco, and Fuel Division
(217) 782-6045

PCA Contact

Joshua Habursky
Glynn Loope joshua@premiumcigars.orgglynn@premiumcigars.org

Legislative Information

2019 Session Info
2019 Partisan Splits

Taxation

Illinois’s Tobacco Products Tax Act of 1995 imposes a tax on tobacco products purchased for sale in the state by any person engaged in the business of a tobacco products distributor.  Out-of-state distributors must pay this tax if they sell tobacco products to Illinois retailers or consumers. However, purchases of tobacco products by wholesalers who will not sell the product at retail or who will deliver the products outside of Illinois are exempt from the tax.

The state tobacco products tax is in addition to all other occupation or privilege taxes imposed by any political subdivision of Illinois or by any municipal corporation.

35 Ill. Comp. Stat. 143/10-10

The tobacco products tax is 36% of the wholesale price of tobacco products sold or otherwise disposed of to retailers or consumers located in the state, except that the tax on moist snuff is $0.30 per ounce and the tax on little cigars is the same rate as the tax imposed on cigarettes and must be paid by purchasing tax stamps.

Beginning on July 1, 2019, “tobacco products” also includes electronic cigarettes. 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.

35 Ill. Comp. Stat. 143/10-10

Illinois SB 690 (2019) imposes a tax upon any person engaged in business as a retailer of cigarettes at the rate of 149 mills per cigarette sold or otherwise disposed of in the course of such business (rather than the aggregate tax rate of 99 mills), which shall be distributed each month into the Capital Projects Fund.

Every distributor must file a Tobacco Products Tax Return (Form TP-1) with the Department of Revenue on or before the 15th day of each month, along with payment for the taxes due.

35 Ill. Comp. Stat. 143/10-30

Form Type / NameForm Number / Link
Tobacco Products Tax Forms DatabaseTax Forms Database
Tobacco Products Tax Return: Form TP-1Form TP-1
Form TP-1 – InstructionsInstructions

Cigar and Smoking Tobacco Definitions

“Smoke” or “smoking”means the carrying, smoking, burning, inhaling, or exhaling of any kind of lighted pipe, cigar, cigarette, hookah, weed, herbs, or any other lighted smoking equipment.

410 Ill. Comp. Stat. 82/10

“Tobacco products” means any cigars, including little cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff (including moist snuff) or snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing tobaccos; shorts; refuse scraps, clippings, cuttings, and sweeping of tobacco; and other kinds and forms of tobacco, prepared in such manner as to be suitable for chewing or smoking in a pipe or otherwise, or both for chewing and smoking; but does not include cigarettes as defined in Section 1 of the Cigarette Tax Act or tobacco purchased for the manufacture of cigarettes by cigarette distributors and manufacturers defined in the Cigarette Tax Act and persons who make, manufacture, or fabricate cigarettes as a part of a Correctional Industries program for sale to residents incarcerated in penal institutions or resident patients of a State-operated mental health facility. Beginning on July 1, 2019, “tobacco products” also includes electronic cigarettes.

35 Ill. Comp. Stat. 143/10-5

“Moist snuff” means any finely cut, ground, or powdered tobacco that is not intended to be smoked, but does not include any finely cut, ground, or powdered tobacco that is intended to be placed in the nasal cavity. 

35 Ill. Comp. Stat. 143/10-5

“Little cigar” means and includes any roll, made wholly or in part of tobacco, where such roll has an integrated cellulose acetate filter and weighs less than 4 pounds per thousand, the wrapper or cover of which is made in whole or in part of tobacco.

35 Ill. Comp. Stat. 143/10-5

“Distributor” means any of the following:

  • Any manufacturer or wholesaler in the state who sells, exchanges, or distributes tobacco products to retailers or consumers in the state.
  • Any manufacturer or wholesaler out of the state who sells, exchanges, distributes, ships, or transports tobacco products to retailers or consumers located in the state if the manufacturer or wholesaler has contracts with the state in the form of a place of business or a permanent or temporary agent. 
  • Any retailer who receives tobacco products on which the tax has not been or will not be paid by another distributor.

35 Ill. Comp. Stat. 143/10-5

“Retailer” means any person in this State engaged in the business of selling tobacco products to consumers in this State, regardless of quantity or number of sales.

35 Ill. Comp. Stat. 143/10-5

“Retail tobacco store” means a retail establishment that derives more than 80% of its gross revenue from the sale of loose tobacco, plants, or herbs and cigars, cigarettes, pipes, and other smoking devices for burning tobacco and related smoking accessories and in which the sale of other products is merely incidental. “Retail tobacco store” includes an enclosed workplace that manufactures, imports, or distributes tobacco or tobacco products, when, as a necessary and integral part of the process of making, manufacturing, importing, or distributing a tobacco product for the eventual retail sale of that tobacco or tobacco product, tobacco is heated, burned, or smoked, or a lighted tobacco product is tested, provided that the involved business entity: 

  • maintains a specially designated area or areas within the workplace for the purpose of the heating, burning, smoking, or lighting activities, and does not create a facility that permits smoking throughout; 
  • satisfies the 80% requirement related to gross sales; and (3) delivers tobacco products to consumers, retail establishments, or other wholesale establishments as part of its business. “Retail tobacco store” does not include a tobacco department or section of a larger commercial establishment or any establishment with any type of liquor, food, or restaurant license.

410 Ill. Comp. Stat. 82/10

“Wholesaler” means any person, wherever resident or located, engaged in the business of selling tobacco products to others for the purpose of resale. “Wholesaler“, when used in this Act, does not include a person licensed as a distributor.

35 Ill. Comp. Stat. 143/10-5

“Manufacturer” means any person, wherever resident or located, who manufactures and sells tobacco products.

35 Ill. Comp. Stat. 143/10-5

Restrictions

Illinois state law prohibits smoking in public places, places of employment, and government vehicles. This prohibition includes, but is not limited to, hospitals, restaurants, retail stores, offices, commercial establishments, elevators, indoor theaters, libraries, museums, concert halls, public conveyances, educational facilities, nursing homes, auditoriums, enclosed or partially enclosed sports arenas, meeting rooms, schools, exhibition halls, convention facilities, polling places, private clubs, gaming facilities, all government-owned vehicles and facilities, healthcare facilities or clinics, enclosed shopping centers, retail service establishments, financial institutions, educational facilities, ticket areas, public hearing facilities, public restrooms, waiting areas, lobbies, bars, taverns, bowling alleys, skating rinks, reception areas, and no less than 75% of the sleeping quarters within a hotel, motel, resort, inn, lodge, or bed and breakfast.  Additionally, the state enacted the Smoke-Free Campus Act. Smoking is prohibited on each campus of a State-supported institution of higher education. 

410 Ill. Comp. Stat. 82/10: Definitions

410 Ill. Comp. Stat. 82/15: Smoking in public places, places of employment, and governmental vehicles prohibited

770 Ill. Comp. Stat. 64/15: Smoke –Free Campus Act

Any home rule unit of local government, any non-home rule municipality, or any non-home rule county within the unincorporated territory of the county may regulate smoking in public places, but that regulation must be no less restrictive than state law. In addition, any home rule unit of local government, any non-home rule municipality, or any non-home rule county within the unincorporated territory of the county may regulate smoking in any enclosed indoor area used by the public or serving as a place of work if the area does not fall within the definition of a “public place” under state law.

410 Ill. Comp. Stat. 82/65

Illinois HB 2276 (2019) states that a person shall not smoke in a motor vehicle containing a person under 18 years of age, regardless of whether the vehicle is in motion, at rest, or has its windows down. This measure defines smoking as inhaling, exhaling, burning, or carrying a lighted cigarette, cigar, pipe, weed, plant, regulated narcotic, or other combustible substance. A police officer may not stop a motor vehicle solely for this violation. Furthermore, this measure states that a violation is a petty offense with a maximum fine of $100 and that, for a second or subsequent offense, the fine is not to exceed $250.

The following are exempt from the ban on smoking, subject to conditions:

  • Private residences, except when used as a childcare, adult daycare, or healthcare facility or any other home-based business open to the public.
  • Retail tobacco stores in operation prior to January 1, 2008, that derive more than 80 percent of their gross revenue from the sale of loose tobacco, plants, or herbs and cigars, cigarettes, pipes, and other smoking devices for burning tobacco and related smoking accessories. Retail tobacco stores that began operation after January 1, 2008 only qualify for an exemption if located in a freestanding structure occupied solely by the business and if smoke from the business does not migrate into an enclosed area where smoking is prohibited. Retail tobacco stores must file an annual affidavit to the Illinois Department of Public Health by January 31st stating the percentage of its gross income that was derived from the sale of tobacco products.
    • Staff reported that there is no required form for this affidavit. A simple letter is sufficient as long as it lists the business name and includes the required information.
    • Affidavits may be sent to:
      • Tobacco Control Program
        535 West Jefferson Street (2nd Floor)
        Springfield, Illinois 62761
  • Designated hotel and motel rooms.
  • Enclosed laboratories.
  • Common smoking rooms in long-term care facilities.
  • Vehicles traveling through or parked on campus as long as the vehicles are not owned by a state-supported institution of higher education.

410 Ill. Comp. Stat. 82/35

770 Ill. Comp. Stat.  64/15: Smoke–Free Campus Act

Beginning July 1, 2019, the minimum age to purchase tobacco products and cigarettes within Illinois was raised from 18 to 21.

Individuals under 16 years of age cannot sell any tobacco product at a retail establishment selling tobacco products. This prohibition does not apply to a salesclerk in a family-owned business that can prove the salesclerk is, in fact, a son or daughter of the owner.

720 Ill. Comp. Stat. 675/1 Prevention of Tobacco Use by Persons under 21 Years of Age and Sale and Distribution of Tobacco Products Act

State liquor laws do not regulate age restrictions for admittance to liquor establishments. It is the decision of local municipalities to regulate this restriction.

In Illinois, distributing free samples of any tobacco product to any person, regardless of age, is illegal:

  • Within a retail establishment selling tobacco products, unless the retailer has verified the purchaser’s age with a government-issued ID
  • From a lunch wagon/food truck; or
  • In a public way as a promotion or advertisement of a tobacco manufacturer or tobacco product.

This prohibition does not apply to the distribution of a tobacco product sample in any adult-only facility where the operator ensures or has a reasonable basis to believe that no person under the legal age is present.

The sale or distribution of a tobacco product that is not contained within a sealed container, pack, or package bearing a federal health warning as provided by the manufacturer is prohibited.

720 Ill. Comp. Stat. 675/1 (a-8)

Staff reported that tobacco samples are taxed at the same rate as other tobacco products in Illinois.

Localities may require licenses for the distribution of tobacco product samples.

Illinois law contains no specific provisions concerning state preemption of sampling, so local communities may pass more stringent laws or ordinances on tobacco sampling.

Operating Your Business

Anyone who is engaged in the business of a tobacco products distributor in Illinois must obtain a license from the Department of Revenue by filing an Illinois Business Registration Application (Form REG-1) and a Cigarette and Tobacco Products Information form (Form REG-1-C). There is no application fee, but distributors must file a bond equal to three times the company’s average monthly tobacco tax liability or $50,000, whichever is less. Beginning on January 1, 2016, all retailers of tobacco products in Illinois must obtain an annual license from the Department of Revenue for $75 per place of business. A single license will be issued by the Department if a person is both licensed as a distributor and retailer under the Tobacco Products Act (including a retailer who is deemed to be sufficiently licensed by virtue of his being properly licensed as a retailer under Section 4g of the Cigarette Tax Act).  

35 Ill. Comp. Stat. 143/10-20

35 Ill. Comp. Stat. 143/10-21

Every distributor must also file a Tobacco Products Tax Return (Form TP-1) with the Department of Revenue on or before the 15th day of each month, along with payment for the taxes due.

35 Ill. Comp. Stat. 143/10-30

Illinois SB 664 (2019) provides that any person who manufactures, fabricates, assembles, processes, or labels a tobacco product or imports a finished tobacco product for sale or distribution in the United States, shall provide written evidence and documentation of its compliance with labeling provisions of the federal Family Smoking Prevention and Tobacco Control Act of 2009. These compliance records would need to be reported to the Department of Public Health and the Department of Revenue.  

Localities may require additional business licenses.

Form Type / NameForm Number / Link
Illinois Department of Revenue: Business Registration FormsBusiness Registration Forms
Illinois Business Registration ApplicationForm REG-1
Cigarette and Tobacco Products InformationForm REG-1-C
Tobacco Products Tax Forms DatabaseTobacco Tax Forms Database
Tobacco Products Tax ReturnForm TP-1
Tobacco Products Tax Return – InstructionsInstructions

Political Involvement

“Lobby” and “lobbying” refer to any communication with an official of the executive or legislative branch of state government for the ultimate purpose of influencing any executive, legislative, or administrative action.

25 Ill. Comp. Stat. 170/2

“Influencing” means any communication, action, reportable expenditure as prescribed in Section 6 or other means used to promote, support, affect, modify, oppose or delay any executive, legislative or administrative action or to promote goodwill with officials.

25 Ill. Comp. Stat. 170/2

“Lobbyist” means any natural person who undertakes to lobby state government.

25 Ill. Comp. Stat. 170/2

“Lobbying entity” means any entity that hires, retains, employs, or compensates a natural person to lobby state government.

25 Ill. Comp. Stat. 170/2

“Client” means any person or entity that provides compensation to a lobbyist to lobby state government.

25 Ill. Comp. Stat. 170/2

Illinois law requires any individual who, for compensation or otherwise, undertakes to lobby or any person or entity who employs or compensates another person for lobbying, to register annually, on or before January 31st, with the Secretary of State electronically. The registration fee is $300. All lobbying entities must also submit bi-monthly expenditure reports.

25 Ill. Comp. Stat. 170/3

Form Type / NameForm Number / Link
Illinois Lobbyist Registration Act25 ILCS 170/
Illinois Lobbyist Registration and Reporting SystemRegistration and Reporting System
Lobbyists Registration: Annual Registration GuideAnnual Registration Guide
Illinois Lobbyists: Electronic Expenditure Filing InstructionsElectronic Expenditure Filing Instructions

Shipping Regulations

Illinois’s Tobacco Products Tax Act of 1995 includes a requirement addressing shipping invoices. If required by the Department of Revenue, every distributor who purchases tobacco products for shipment into Illinois from a point outside Illinois shall procure invoices in duplicate covering each shipment and provide one copy of each invoice to the Department at the time of filing the return required by this Act. In addition, under the Prevention of Cigarette Sales to Minors Act, Illinois has specific age verification requirements for the shipping of cigarettes.

35 Ill. Comp. Stat. 143/10-40

Illinois does not have any specific age verification requirements for the shipping of tobacco products. 

Illinois’s Tobacco Products Tax Act of 1995 imposes a tax on tobacco products purchased for sale in the state by any person engaged in the business of a tobacco products distributor. Out-of-state distributors must pay this tax if they sell tobacco products to Illinois retailers or consumers. However, purchases of tobacco products by wholesalers who will not sell the product at retail or who will deliver the products outside of Illinois are exempt from the tax.

The state tobacco products tax is in addition to all other occupation or privilege taxes imposed by any political subdivision of Illinois or by any municipal corporation.

35 Ill. Comp. Stat. 143/10-10

Additional information about taxation in Illinois, including information about tax rates, filings, and forms, is available at the Taxation and Definitions link above.

Disclaimer: PCA believes the information on this site is accurate. However, tobacco laws and regulations are subject to frequent change and court interpretation. Statements above are not intended as legal advice or restatement of law. PCA does not guarantee or assume responsibility for the accuracy, completeness or timeliness of this information, nor that this information complies with all federal laws or the laws of all 50 states. Parties acknowledge and agree it is not the intention of PCA to provide specific legal advice for particular individuals, but rather to provide users with general information to better understand these issues. Users shall neither construe any of these materials as legal advice nor make this site the primary basis for any legal decisions made by or on your behalf and agree to release and waive any claims against PCA for the same. You shall consult with legal advisors concerning any contemplated individual decision.