Cigarette & Cigarette Use Taxes

• Statutory
  
  • Cigarette Tax - 35 ILCS 130/1 to 130/30
  • Cigarette Use Tax - 35 ILCS 135/1 to 135/37
    
• Regulations
  
  • Cigarette Tax - Part 440
    
  • Cigarette Use Tax - Part 450
    

• MyTax Illinois
• Tax-Prep Software

• In-state cigarette distributors
• Out-of-state cigarette distributors
• Secondary cigarette distributors
• Cigarette manufacturers

The Cigarette Tax Act imposes a tax on the occupation of selling cigarettes at retail. Licensed distributors prepay the tax through the purchase of stamps, which are affixed (either heat-transferred or hand applied) to each cigarette package. The distributor collects the tax from the retailer at or before the time of sale. The retailer passes the tax on to the consumer in the cigarette sale price.

The Cigarette Use Tax Act imposes a tax on the privilege of using cigarettes in Illinois. This act duplicates the provisions of the Cigarette Tax Act.

“Cigarette” means any roll for smoking made wholly or in part of tobacco irrespective of size or shape and whether or not such tobacco is flavored, adulterated or mixed with any other ingredient, and the wrapper or cover of which is made of paper or any other substance or material except tobacco.

The Tobacco Products Tax Act imposes the tax on little cigars at the same rate as the tax imposed on cigarettes under the Cigarette Tax Act and the Cigarette Use Tax Act. Little cigars sold in packages of 20 or 25 sticks must be affixed with a cigarette tax stamp. Distributors selling both cigarettes and little cigars are considered “stamping distributors.” See below for licensing and form filing requirements for stamping distributors. Stamping Distributors also must meet all the filing requirements of a tobacco products distributor.

“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 and the wrapper or cover of which is made in whole or in part of tobacco.

Use the Tax Rate Database to locate the rate for both Cigarette Tax and Cigarette Use Tax.

• sales out-of-state;
• cigarettes and little cigars returned to manufacturers;
• cigarettes and little cigars lost through fire, theft, etc., if the loss is supported by proper documentation;
• sales to residents incarcerated in penal institutions and to resident patients of state-operated mental health facilities when the cigarettes or little cigars have been manufactured as part of a correctional industries program;
• sales to U.S. military personnel through officially recognized agencies physically located at military bases; and
• direct sales to U.S. veteran's hospitals.

In addition to filing Form REG-1, Illinois Business Registration Application, distributors must pay a $250 annual fee and post a $2,500 bond for each location. You may also register using MyTax Illinois.

Form IDR-169, Application for Cigarette Transporter Permit, must be completed if unstamped cigarettes will be
• purchased as a sale for resale in a state other than Illinois,
• transported through Illinois but not sold in Illinois, and
• delivered to another state.

These cigarettes cannot be returned to Illinois.

Distributors selling both cigarettes and little cigars are considered “stamping distributors” and must be licensed under the Cigarette Tax Act or the Cigarette Use Tax Act and the Tobacco Products Tax Act.

Secondary distributors must also be licensed. A secondary distributor is any person engaged in the business of selling cigarettes, who purchases stamped original packages of cigarettes from a licensed distributor under the Cigarette Tax Act or the Cigarette Use Tax Act, sells 75 percent or more of those cigarettes to retailers for resale, and maintains an established business where a substantial stock of cigarettes is available to retailers for resale.

Retailers of cigarettes and tobacco products as defined in the Cigarette Tax Act, the Cigarette Use Tax Act, or the Tobacco Products Tax Act must also obtain a Cigarette and Tobacco Products Retailer License. This License allows retailers to sell electronic cigarettes. Retailers must pay an annual license fee of $75 per retail location. This fee must be submitted electronically with your initial license application. The annual renewal fee of $75 also must be submitted electronically using MyTax Illinois.

Cigarette taxes may exist in both home rule and non-home rule municipalities.  The Department of Revenue does not collect locally imposed cigarette taxes.

• The in-state distributors return, Form RC-6, Cigarette and Little Cigar Revenue Return, is due monthly by the 15th day of the month following the end of the reporting period.
• The out-of-state distributors return, Form RC-6-A, Out-of-State Cigarette and Little Cigar Revenue Return, is due monthly by the 15th day of the month following the end of the reporting period.
• Form RC-25, Cigarette Importation Report, must be filed by distributors by the first business day of the month following the end of the reporting period.
• Form RC-1-A, Cigarette Tax Stamp Order-Invoice, is filed as needed to purchase cigarette tax stamps.
• Form RCS-36 Schedule CSM, Sales of Cigarettes and Little Cigars to Illinois Secondary Cigarette Distributors, must be filed using MyTax Illinois and is due by the 15th day of the month following the transaction being reported.
• Form RC-55, Unstamped Little Cigar Sticks Tax Return, is due monthly by the 15th day of the month following the end of the reporting period.

• Form RC-6
• Form RC-6-A
• Form RC-25
• Form RC-1-A
• Form RCS-36 Schedule CSM (must be filed electronically)
• Form RC-55
• Form TP-1, Tobacco Products Tax Return, is due by the 15th day of the month following the month in which the tobacco products were sold or otherwise disposed.

• Form RCS-1, Secondary Distributors/Manufacturer Representatives Report, must be filed using MyTax Illinois and is due monthly by the 15th day of the month following the end of the reporting period.

• Form RC-36 Schedule CM, Sales of Cigarettes and Little Cigars into Illinois by Manufacturers or Importers, is due by the 5th day of the month following the transaction being reported.

• Form RC-44, Cigarette Use Tax Return, is filed as needed, on a per-purchase basis, to pay tax on unstamped cigarettes purchased from a seller and is due within 30 days of the purchase.

A taxpayer who has 30 or more transactions per month must file electronically. One electronic filing option is the direct transmission method using software you develop or purchase (see Tax-Prep Software). Another option is to use MyTax Illinois, our on-line account management program, to file most Cigarette Tax and Cigarette Use Tax returns and reports.

Beginning July 1, 2003, all cigarette tax stamp purchases must be paid by Electronic Funds Transfer (EFT).

• Email us at: REV.ATP-MFR@illinois.gov 
  
• Call us weekdays from 8:00 a.m. to 4:00 p.m. at: 217-782-6045
• Write us at:
  ALCOHOL, TOBACCO AND FUEL DIVISION
  ILLINOIS DEPARTMENT OF REVENUE
  PO BOX 19467
  SPRINGFIELD IL 62794-9467