• Cigarette Tax 35 ILCS 130/1 to 130/30
  • Cigarette Use Tax 35 ILCS 135/1 to 135/37

Electronic Services

  • MyTax Illinois
  • Tax Prep Software

Definition

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.

NOTE Tobacco products other than cigarettes are also taxed. (See “Tobacco Products Tax.”)

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.

Tax Rate

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

Allowable Deductions

  • 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.

Additional Registration, License fee and bonding requirements

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
&bull purchased as a sale for resale in a state other than Illinois,
&bull transported through Illinois but not sold in Illinois, and
&bull 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.

Local Taxes

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

Form/Filing & Payment Requirements Cigarette Distributors

  • 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.

Stamping Distributors

  • Form RC 6
  • Form RC 6 A
  • Form RC 25
  • Form RC 1 A
  • Form RCS 36 Schedule CSM
  • 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.

Secondary Distributors

  • 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.

Cigarette Manufacturers

  • 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.

Unlicensed Individuals

  • 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.

Electronic Filing

A taxpayer who has 30 or more transactions per month must file electronically. For more information refer to RC 750, Electronic Filing Cigarette Returns. Most Cigarette Tax and Cigarette Use Tax returns and reports can be filed for free at MyTax Illinois.

Electronic Payments

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

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    Reduced ignition propensity cigarettes

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    The RIP Coalition is pleased to announce that it has achieved its goal to make reduced ignition propensity or “fire safer” cigarettes a legal requirement in the UK and European Union. From 17 November 2011 all cigarettes sold throughout the EU must conform to the new standard.

    Members of the RIP Coalition have been campaigning for the new standard since 2007 to reduce the number of avoidable deaths and injuries resulting from fires started by cigarettes.

    Cigarettes are the biggest cause of domestic fire deaths in the UK causing over 100 fatalities each year. In 2008, the most recent year for which statistics are available, smokers materials caused 2,814 fires and 101 deaths.

    How do RIP cigarettes work?

    A simple change in the design of cigarettes (two narrow bands of slightly thicker paper) greatly reduces the likelihood of unattended cigarettes continuing to burn, dramatically cutting the risk of fire. Tobacco companies could have introduced the change voluntarily but they refused. They even campaigned against laws that would bring in these “fire safer” cigarettes.

    However, thanks to persistent lobbying by health and fire safety organisations, all cigarettes now sold in the EU are required to comply with the new fire safety standard.

    In 2010, Finland became the first EU country to require fire safer cigarettes and the number of smoking related fire deaths fell by 40% in one year.

    Click here to see the London Fire Brigade s press release

    RIP Implementation update by Sir Ken Knight

    Sir Ken Knight, Chief Fire and Rescue Advisor to the UK Government, has written to Deborah Arnott and the RIP coalition to provide an update on the RIP implementation later this year.

    Download a pdf of the letter by clicking here.

    RIP cigarettes for Europe before the end of 2011

    The RIP Coalition understands that “fire safer cigarettes” should be in UK shops within the year. Negotiations at the European Union have been progressing well since the CEN, Europe s standard making body, published the standard and test method on 17th November 2010. Once the standard is referenced in the Official Journal of the European Union, which is usually 12 months after it is published, companies will be required to meet it. Therefore we expect the standard to be in force on or around 17th November, 2011.

    European Committee for Standardization

    RIP Law to cover entire US population

    Eleven more US states now require all cigarettes sold to conform to the Reduced Ignition Propensity (RIP) standard, bringing the total to 43 states. Laws came into force on 1 January 2010 in Alabama, Arkansas, Florida, Georgia, Michigan, Nebraska, New Mexico, North Carolina, South Carolina, Tennessee, and Virginia.

    Mississippi, Nevada, North Dakota, Ohio and Missouri will all implement legislation during 2010, followed by South Dakota in January 2011 and Wyoming in July 2011. Wyoming became the 50 and last state to pass legislation to protect smokers and their families from the old style cigarettes, on 19 March 2010.

    Cigarettes had been the number one cause of preventable fire deaths across the US until the State of New York became the first to implement RIP legislation in 2004 against fierce tobacco industry resistance. Canada was the first country to introduce RIP Cigarettes nationwide, while legislation in Australia came into force on 23 March 2010.

    Tobacco manufacturers don’t sell firesafer cigarettes in the UK where cigarettes continue to be the largest cause of domestic fire deaths causing up to 3,000 fires per year. The European Union is currently developing a standard to be introduced across Europe, however Finland has introduced its own regulations from 1 April 2010.