Violations and Penalties

TITLE 86: REVENUE CHAPTER I: DEPARTMENT OF REVENUE PART 440 CIGARETTE TAX ACT SECTION 440.216 VIOLATIONS AND PENALTIES Section 440.216  Violations and Penalties a) With the exception of licensed distributors and transporters, anyone possessing or having possessed 10 to 100 packages of contraband cigarettes contained in original packages is liable to pay to the Department, for a deposit into the Tax Compliance and Administration Fund, a penalty of $15 for each package of contraband cigarettes, unless reasonable cause can be established by the person upon whom the penalty is to be imposed.  The provisions of the Uniform Penalty and Interest Act do not apply to this subsection (a).  [35 ILCS 130/18c]  For purposes of this Section, "contraband cigarettes" means unstamped original packages of cigarettes or original packages of cigarettes that bear a tax stamp of another state or taxing jurisdiction. b) With the exception of licensed distributors and transporters, any person possessing or having possessed more than 100 packages of contraband cigarettes contained in original packages is liable to pay, to the Department, for deposit in the Tax Compliance and Administration Fund, a penalty of $25 for each package of contraband cigarettes in excess of 100 packages, unless reasonable cause can be established by the person upon whom the penalty is to be imposed.  This penalty is in addition to the taxes imposed by the Act.  The provisions of the Uniform Penalty and Interest Act do not apply to this subsection (b).  [35 ILCS 130/18b] c) The sale of individual or loose cigarettes is prohibited.  Any person who violates this subsection (c) is liable to pay to the Department for deposit in the Tax Compliance and Administration Fund, a penalty of $1,000 for the first violation and $3,000 for any subsequent violation.  Any person who violates this subsection (c) shall be guilty of a Class 4 felony. [35 ILCS 130/18d] d) Any person shall be guilty of a Class 2 felony who for the purpose of evading the tax imposed by the Act : 1) falsely or fraudulently makes, forges, alters , or counterfeits any stamp ; 2) causes or procures to be falsely or fraudulently made, forged, altered , or counterfeited any such stamp ; 3) knowingly and wilfully utters, publishes, passes , or tenders as genuine any such false, altered, forged , or counterfeit stamp ; 4) falsely or fraudulently makes, forges, alters , or counterfeits any tax imprint on an original package of cigarettes inside a sealed transparent wrapper ; 5) causes or procures falsely or fraudulently to be made, forged, altered , or counterfeited any such tax imprint ; or 6) knowingly and wilfully utters, publishes, passes , or tenders as genuine any false, altered, forged , or counterfeited tax imprint. [35 ILCS 130/22] e)         Any person including every distributor, secondary distributor, retailer, manufacturer with authority to maintain manufacturer representatives, and their manufacturer representatives shall be deemed guilty of a Class 2 felony who shall : 1) knowingly and wilfully sell or offer for sale any original package having affixed to such original package any fraudulent, spurious, imitation , or counterfeit stamp, or stamp which has been previously affixed, or affixes a stamp which has previously been affixed to an original package ; or 2) knowingly and wilfully sell or offer for sale any original package having imprinted on such original package underneath the sealed transparent wrapper any fraudulent, spurious, imitation , or counterfeit tax imprint. [35 ILCS 130/23] f)         Sale or Possession of Packages of Contraband Cigarettes. 1) With the exception of licensed distributors, licensed secondary distributors, or licensed transporters, any person who has in their possession or sells : A) 100 or less original packages of contraband cigarettes is guilty of a Class A misdemeanor for a first offense and a Class 4 felony for each subsequent offense occurring within 12 months of a prior offense ; B)        101 to 250 original packages of contraband cigarettes is guilty of Class A misdemeanor for a first offense and a Class 4 felony for each subsequent offense ; C)        251 to 1000 original packages of contraband cigarettes is guilty of a Class 4 felony ; or D)        1001 or more original packages of contraband cigarettes is guilty of a Class 3 felony. [35 ILCS 130/24(a)-(d)] 2) Any licensed distributor, licensed secondary distributor, or licensed transporter who has in their possession or sells : A) 100 or less original packages of contraband cigarettes is guilty of a Class A misdemeanor for a first offense and a Class 4 felony for each subsequent offense occurring within 12 months of a prior offense ; or B)        101 or more original packages of contraband cigarettes is guilty of a Class 4 felony .  [35 ILCS 130/24(e) and (f)] 3) Notwithstanding subsections (f)(2)(A) and (B), A) licensed distributors and transporters may possess unstamped packages of cigarettes; B) licensed distributors may possess cigarettes that bear a tax stamp of another state or taxing jurisdiction; C) a licensed distributor or licensed secondary distributor may possess contraband cigarettes returned to the distributor or secondary distributor by a retailer if: i) the distributor or licensed secondary distributor immediately conducts an inventory of the cigarettes being returned; ii) the distributor or licensed distributor and the retailer returning the contraband cigarettes sign the inventory; iii) the distributor or licensed secondary distributor provides a copy of the signed inventory to the retailer; and iv) the distributor or licensed secondary distributor retains the inventory in its books and records and promptly notifies the Department. [35 ILCS 130/24(g)] 4)         Retailers. A) Any retailer who knowingly possesses packages of cigarettes with a counterfeit stamp with intent to sell is guilty of a Class 2 felony. B) Any retailer who knowingly possesses unstamped packages of cigarettes with intent to sell is guilty of a Class 4 felony. C) Notwithstanding subsections (f)(1)(A)-(D), a retailer unknowingly possessing contraband cigarettes obtained from a licensed distributor or licensed secondary distributor or knowingly possessing contraband cigarettes obtained from a licensed distributor or secondary distributor is not subject to penalties under this Section if the retailer, within 48 hours after discovering that the cigarette are contraband cigarettes, excluding Saturdays, Sundays, and holidays: i) notifies the Department and the licensed distributor or licensed secondary distributor from whom the cigarettes were obtained, orally and in writing, that the retailer possesses contraband cigarettes obtained from a licensed distributor or licensed secondary distributor; ii) places the contraband cigarettes in one or more containers and seals those containers; and iii) places on the containers the following or similar language:  "Contraband Cigarettes.  Not For Sale." D) All contraband cigarettes in the possession of a retailer remain subject to forfeiture under the provisions of the Act. [35 ILCS 130/24(h)] g) Any person, or any officer, agent or employee of a person, required by the Act to make, file, render, sign or verify any report or return, who makes any false or fraudulent report or return or files any false or fraudulent report or return, or who shall fail to make such report or return or files such report or return when due, shall be guilty of a Class 4 felony. [35 ILCS 130/25] h)         Any person who acts as a distributor, secondary distributor, retailer, or manufacturer representative without having a license, as required by the Act, shall be guilty of a Class 4 felony. [35 ILCS 130/26]