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Bill

HB 5182

TOBACCO TAX-REMOTE SELLERS

104th Regular Session Introduced by Margaret Croke and 2 co-sponsors

Require remote tobacco sellers to collect and remit Illinois tobacco taxes at sale for Illinois customers, aligning remote with in-state tax treatment.

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Bill Summary · HB 5182

Summary of HB 5182 (104th Illinois General Assembly)

Purpose and intent

HB 5182 is a bill concerning tobacco products sold by remote (out-of-state or online) sellers to Illinois consumers. The core aim is to ensure that tobacco taxes are collected and remitted on sales to Illinois residents, regardless of where the seller is located or how the sale is transacted, thereby leveling the tax treatment between in-state and remote sales and preventing tax avoidance.

Key provisions and changes

  • Tax collection on remote sales: Requires remote sellers (including online, catalog, and other out-of-state vendors) to collect Illinois tobacco taxes at the point of sale or via a similar collection mechanism for sales to Illinois customers.
  • Tax rate applicability: Applies the applicable Illinois tobacco tax rates to remote sales, aligning with the rates imposed on traditional brick-and-mortar purchases within the state.
  • Registration and compliance: Remote sellers would likely be required to register with the Illinois Department of Revenue (IDOR) or a designated tax authority, file regular reports, and remit collected taxes on a defined schedule.
  • Due diligence and penalties: Establishes enforcement provisions, including potential penalties or interest for failure to collect, report, or remit taxes as required. This may include audit authority for IDOR and penalties proportionate to noncompliance.
  • Economic nexus considerations: The bill addresses the practical implications of remote commerce by clarifying tax collection responsibilities for sellers with sufficient economic presence in Illinois, even if they lack a physical presence in the state.
  • Consistency with other tobacco taxes: Ensures that tax treatment for remote tobacco sales aligns with existing Illinois tobacco tax structures, avoiding gaps in revenue collection.

Who would be affected

  • Remote tobacco sellers: Online retailers, catalog sellers, and other out-of-state vendors selling tobacco products to Illinois residents would be directly subject to tax collection and remittance requirements.
  • Illinois consumers: Residents purchasing tobacco products from remote sellers would experience collection of Illinois tobacco taxes at the point of sale, potentially affecting final purchase prices.
  • Illinois Department of Revenue (IDOR): Responsible for administering registration, reporting, filing, and enforcement activities under the new requirements.
  • Manufacturers and distributors: May experience shifts in compliance burdens and potential changes in sales practices to accommodate remote tax collection.

Procedural and timeline aspects

  • The bill would define effective dates for when remote sellers must begin collecting and remitting Illinois tobacco taxes (often tied to a specific date or upon enactment, with phased compliance in some cases).
  • It would outline reporting periods (monthly, quarterly, or annual) and filing deadlines.
  • It would specify penalties for noncompliance, including potential interest and enforcement actions, and may provide transition rules for sellers currently in the process of adjusting to new obligations.

Additional notes

  • The bill is sponsored in part by multiple co-sponsors, signaling cross-chair or bipartisan interest in tightening tobacco tax enforcement on remote sales.
  • Specific dollar amounts, filing frequencies, and penalty rates would be defined in the enacted text; those details are not included in the summary provided here.

If you want, I can tailor this summary to emphasize fiscal impact (estimated revenue) or compliance burdens for businesses, once the exact text or fiscal notes are available.

Compiled from official sources — confirm details with the bill’s official record.

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