Books and Records; Invoices

Section 440 TITLE 86: REVENUE CHAPTER I: DEPARTMENT OF REVENUE PART 440 CIGARETTE TAX ACT SECTION 440.110 BOOKS AND RECORDS; INVOICES Section 440.110  Books and Records; Invoices a) Distributors. Every distributor of cigarettes, who is required to procure a license under the Act, shall keep within Illinois, at its licensed address, complete and accurate records of cigarettes held, purchased, manufactured, brought in or caused to be brought in from without the State, and sold or otherwise disposed of, and shall preserve and keep within Illinois at its licensed address all invoices, bills of lading, sales records, copies of bills of sale, inventory at the close of each period for which a return is required of all cigarettes on hand and of all cigarette revenue stamps, both affixed and unaffixed, and other pertinent papers and documents relating to the manufacture, purchase, sale or disposition of cigarettes. [35 ILCS 130/11] 1)         A distributor's records of a particular purchase from a manufacturer or distributor shall include: A)        a copy of the distributor's purchase order, if any, to the manufacturer or distributor ; B)        the manufacturer's or distributor's invoice to the distributor in duplicate (see subsection (b)(2)); C)        a bill of lading or waybill pertaining to the shipment covered by the invoice; D)        the receiving record showing the date when the cigarettes were received by the distributor; and E)        evidence of payment by the distributor to the manufacturer or distributor. 2) Every distributor who is required to procure a license under the Act and who purchases cigarettes for shipment into Illinois from a point outside this State shall procure invoices in duplicate covering each shipment, shall make the invoices available for inspection upon demand by a duly authorized agent or employee of the Department, and shall, if the Department so requires, furnish one copy of each invoice to the Department upon request.  [35 ILCS 130/12] 3) Every sales invoice issued by a licensed distributor to a retailer in this State shall contain the distributor's cigarette distributor license number unless the distributor has been granted a waiver by the Department.  The distributor shall file a written request with the Department, and, if the Department determines that the distributor meets the conditions for a waiver, the Department shall grant the waiver. The Department shall grant a waiver in response to a written request when: A) the distributor sells cigarettes only to licensed retailers that are wholly-owned by the distributor or owned by a wholly-owned subsidiary of the distributor; B) the licensed retailer obtains cigarettes only from the distributor requesting the waiver; and C) the distributor affixes the tax stamps to the original packages of cigarettes sold to the licensed retailer. [35 ILCS 130/11] 4) Any licensed distributor that ships or otherwise causes to be delivered unstamped original packages of cigarettes into, within, or from this State shall ensure that the invoice or equivalent documentation and the bill of lading or freight bill for the shipment identifies the true name and address of the consignor or seller, the true name and address of the consignee or purchaser, and the quantity by brand style of the cigarettes so transported, provided that this subsection (a)(4) shall not be construed as to impose any requirement or liability upon any common or contract carrier. [35 ILCS 130/3] 5)         When a distributor who is licensed or has a permit under the Cigarette Tax Act sells cigarettes to a federal or foreign government agency or instrumentality, the distributor shall print, stamp or otherwise write substantially the following legend on the original and all copies of the invoice covering the cigarettes:  "Illinois cigarette tax paid". 6)         When a distributor who is licensed or has a permit under the Cigarette Tax Act sells Illinois tax-stamped or tax-imprinted original packages of cigarettes to any purchaser other than a federal or foreign government agency or instrumentality, the distributor's invoice not only shall state that the cigarette tax has been paid by the distributor, but also shall state the amount of the tax to the purchaser as a separate item from the selling price of the cigarettes. 7)         When a permit holder or licensee under the Cigarette Use Tax Act, as distinguished from a licensee or permit holder under the Cigarette Tax Act, sells Illinois tax-stamped or tax-imprinted cigarettes to anyone other than a federal or foreign government agency or instrumentality, the distributor's invoice shall state the amount of the Cigarette Use Tax to the purchaser as a separate item from the selling price of the cigarettes.  However, when a person sells cigarettes to a federal or foreign government agency or instrumentality, the invoice should omit any reference to the Cigarette Use Tax. 8)         Each Illinois manufacturer of cigarettes in original packages that are contained inside a sealed transparent wrapper shall keep a copy of each invoice rendered by the manufacturer to any purchaser to whom the manufacturer delivered cigarettes or caused cigarettes to be delivered during the period covered by the manufacturer's return.  Copies of invoices must be furnished to the Department upon request. 9)         Each manufacturer who holds a permit under Section 4b of the Act shall keep a copy of each invoice rendered by the permittee to any purchaser to whom the permittee delivered cigarettes of the type covered by the permit or caused cigarettes of the type covered by the permit to be delivered in Illinois during the period covered by the return.  Copies of invoices must be furnished to the Department upon request. b)         Secondary Distributors. 1) Every secondary distributor of cigarettes, who is required to procure a license under the Act shall keep within Illinois, at its licensed address, complete and accurate records of cigarettes held, purchased, brought in from without the State, and sold, or otherwise disposed of, and shall preserve and keep within Illinois at its licensed address all invoices, bills of lading, sales records, copies of bills of sale, inventory at the close of each period for which a report is required of all cigarettes on hand, and other pertinent papers and documents relating to the purchase, sale, or disposition of cigarettes. [35 ILCS 130/11a] 2) Every secondary distributor of cigarettes, who is required to procure a license under the Act and who purchases cigarettes for shipment into Illinois from a point outside this State shall procure invoices in duplicate covering each shipment, shall make the invoices available for inspection upon demand by a duly authorized agent or employee of the Department, and shall, if the Department so requires, furnish one copy of each invoice to the Department upon request.  [35 ILCS 130/12] c)         Manufacturers with Manufacturer Representatives. Every manufacturer with authority to maintain manufacturer representatives under Section 4f of the Act shall keep within Illinois, at its business address identified under Section 4f of the Act, complete and accurate records of cigarettes purchased, sold, or otherwise disposed of, and shall preserve and keep within Illinois at its business address all invoices, sales records, copies of bills of sale, inventory at the close of each period for which a report is required of all cigarettes on hand, and other pertinent papers and documents relating to the purchase, sale, or disposition of cigarettes.  At all times during the usual business hours of the day, any duly authorized agent or employee of the Department may enter any place of business of the manufacturers with authority to maintain manufacturer representatives under Section 4f of the Act and their manufacturer representatives, or inspect any motor vehicle used by a manufacturer representative in the course of business, without a search warrant and may inspect the premises, motor vehicle, and any packages of cigarettes therein contained to determine whether any of the provisions of the Act are being violated. [35 ILCS 130/11b] d)         Retailers. Every retailer who is required to procure a license under the Act shall keep within Illinois complete and accurate records of cigarettes purchased, sold, or otherwise disposed of.  It shall be the duty of every retail licensee to make sales records, copies of bills of sale, and inventory at the close of each period for which a report is required of all cigarettes on hand available upon reasonable notice for the purpose of investigation and control by the Department. 1)         The books and records need not be maintained on the licensed premises, but must be maintained in the State of Illinois. However, all original invoices or copies thereof covering purchases of cigarettes must be retained on the licensed premises for a period of 90 days after purchase, unless the Department has granted a waiver in response to a written request in cases in which records are kept at a central business location within the State of Illinois. [35 ILCS 130/11c]  Prior to removing the books and records from the licensed premises, the retailer must notify the Department that the books and records will be kept at another location in Illinois and identify the location.  Under these circumstances, books and records may be kept at that location in Illinois, but the taxpayer must, within a reasonable time after notification by the Department, make all pertinent books, records, papers, and documents available within 30 days at the licensed premises or an agreed upon location by the Department for the purpose of inspection and audit as the Department may deem necessary. 2)         Books and records may be maintained out of State if access is available electronically.  However, all original invoices or copies thereof covering purchases of cigarettes must be retained on the licensed premises for a period of 90 days after purchase, unless the Department has granted a waiver in response to a written request in cases in which records that are available electronically are maintained out of State. [35 ILCS 130/11c] 3)         The Department will grant a written waiver under subsections (d)(1) and (2) when the following requirements are met by the retailer: A)        The retailer submits a letter to the Department containing: i)          the retailer's license number and FEIN; ii)         the address or addresses of the licensed premises where records are currently maintained; iii)        the address of the central location or out-of-State location where the retailer intends to maintain the records; iv)        if the records are maintained out-of-State, an explanation of the process and system that will enable the Department or its duly authorized agents or employees to electronically access the records from the licensed premises on demand; and v)         an acknowledgement by the retailer that the Department, upon 30 days written notice, may revoke the waiver of the retailer for one or more licensed premises if the retailer fails to provide electronic access in accordance with the requirements of the written waiver; transfers or sells the licensed premises to another person; or changes the process or system for providing access to the records electronically. B)        For books and records maintained out of State, the Department is given access electronically to accurate records of cigarettes held, purchased, sold, or otherwise disposed of; invoices; bills of lading; sales records; copies of bills of sale, returns, and other pertinent papers; and documents relating to the purchase, sale, or disposition of cigarettes kept at the licensed premises in the normal course of business at the time of the request; and C)        For books and records maintained out of State, the Department has tested the process and system from the licensed premises and verified that the Department and its duly authorized agents and employees have access electronically to the required records from the licensed premises on demand. e)         General. 1) For purposes of this Section , "records" means all data maintained by distributors , secondary distributors, manufacturers with the authority to maintain manufacturer representatives and their manufacturer representatives, and retailers, including data on paper, microfilm, microfiche , or any type of machine sensible data compilation. [35 ILCS 130/11, 11a, 11b and 11c] 2) All books and records and other papers and documents that are required by the Act to be kept shall be kept in the English language, and shall, at all times during the usual business hours of the day, be subject to inspection by the Department or its duly authorized agents and employees. [35 ILCS 130/11, 11a, and 11b] 3) At all times during the usual business hours of the day, any duly authorized agent or employee of the Department may enter any place of business of the distributor, secondary distributor, manufacturer with authority to maintain a manufacturer representative, manufacturer representative's vehicle, or retailer without a search warrant and inspect the premises and the stock or packages of cigarettes and any vending devices in the premises or motor vehicle to determine whether any of the provisions of the Act are being violated.  If the agent or employee is denied free access or is hindered or interfered with in making the examination, the license of the distributor, secondary distributor, manufacturer representative, or retailer shall be subject to revocation by the Department. [35 ILCS 130/11, 11a, 11b, and 11c] 4) The books, records, papers and documents shall be preserved for a period of at least 3 years after the date of the documents, or the date of the entries appearing in the records, whichever is later , unless the Department, in writing, authorizes their destruction or disposal at an earlier date. [35 ILCS 130/11, 11a, 11b, and 11c]