Legal References

Electronic Services

Illinois Licensed Tobacco Products Distributors

Definition

The tax is imposed on persons engaged in the business as a distributor of tobacco products (other than cigarettes), including cigars; cheroots; stogies; periques; granulated, plug-cut, crimp-cut, ready-rubbed and other smoking tobacco; snuff or snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing tobaccos; refuse scraps, clippings, cuttings and sweepings of tobacco; and other kinds and forms of tobacco suitable for chewing or smoking. Out‑of‑state distributors must pay this tax if they sell tobacco products to Illinois retailers or consumers.

Effective July 1, 2019 electronic cigarettes will be regulated and taxable under the Tobacco Products Tax Act. "Electronic cigarette" is defined as follows:

• any device that employs a battery or other mechanism to heat a solution or substance to produce a vapor or aerosol intended for inhalation;

• any cartridge or container of a solution or substance intended to be used with or in the device or to refill the device; or

• any solution or substance, regardless of whether it contains nicotine, intended for use in the device.

This definition includes, but is not limited to, any electronic nicotine delivery system, electronic cigar, electronic cigarillo, electronic pipe, electronic hookah, vape pen, or similar product or device, and any component or part that can be used to build the product or device. For additional information see FY 2019- 29 New Tax Requirements for Electronic Cigarettes and Electronic Cigarette Frequently Asked Questions

The Tobacco Products Tax Act provides that any package of little cigars containing 20 or 25 sticks must be affixed with a cigarette tax stamp. The stamping must be done in the same manner as a package of cigarettes under the Cigarette Tax Act and Cigarette Use Tax Act and must be performed by a “stamping distributor.” Little cigars sold in packages containing quantities other than 20 or 25 sticks do not require stamps. Instead, a stamping distributor must pay the tax due using Form RC-55, Unstamped Little Cigar Sticks Tax Return.

“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 determine the rate.

Form Filing & Payment Requirements

Note: A taxpayer that had an annual liability of $20,000 or more in the preceding calendar year must remit any tax payment by Electronic Funds Transfer.
  • 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 TP-1-X, Amended Tobacco Products Tax Return
  • Form TP-7,  Schedule of Returned Merchandise for Tobacco Products Tax
  • Form TP-11, Products Sold in Interstate Commerce
  • Form TP-12, Products Sold to Other Distributors/Wholesalers
  • Form TP-13, Other Deductions for Tobacco Products
  • Form TP-14, Moist Snuff Sold and Shipped in Interstate Commerce
  • Form TP-15, Moist Snuff Sold to Other Distributors/Wholesalers
  • Form TP-16, Schedule of Returned Moist Snuff
  • Form TP-17, Other Deductions for Moist Snuff

Electronic Filing

Forms TP-1 and TP-1-X can be filed for free at MyTax Illinois.

Allowable Deductions and Nontaxable Sales

The following types of tobacco products sales are not subject to this tax:

  • Sales out-of-state
  • Sales of tobacco used in the cigarette manufacturing process
  • Sales to manufacturers of tobacco products as part of a Correctional Industries program for sale to residents incarcerated in penal institutions and to resident patients of state-operated mental health facilities
  • Sales made to a US government agency

Additional Registration and Bonding Requirements

In addition to filing Form REG-1, Illinois Business Registration Application, distributors must file a bond equal to three times the company's average monthly tobacco tax liability or $50,000, whichever is less. The bond is not required if the taxpayer is a licensed cigarette distributor. You may also register using MyTax 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.

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.

Questions?

  • 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