CIGARETTE TAX

Municipal Code of Chicago tit. 3, ch. 3-42

in effect

Municipal Code of Chicago § 3-42-010 Definitions.

3-42-010 Definitions. For the purpose of this chapter, whenever any of the following words or terms is used herein, it shall have the meaning ascribed to it in this section: "Cigarette" means any roll for smoking made wholly or in part of tobacco, irrespective of size or shape and whether such tobacco is flavored, adulterated or mixed with any other ingredient, or not, and the wrapper of which is made of paper or any other substance or material except tobacco. "Cigarette purveyor" means a wholesale tobacco dealer or retailer tobacco dealer. "Cigarette vending machine" has the meaning ascribed to that term in Section 4-64-100. "Commissioner" means the commissioner of business affairs and consumer protection. "Comptroller" means the comptroller of the city. "Department" means the department of finance of the city. "Director of revenue" means the director of revenue of the city. "Manufacturer" means any person who makes or fabricates cigarettes, or packs and sells them in packages. "Package" means the original packet, box or container whatsoever used to contain and to convey cigarettes to the consumer. "Person" means any natural person, trustee, court- appointed representative, syndicate, association, partnership, limited liability company, firm, club, company, corporation, business trust, institution, agency, government corporation, municipal corporation, district or other political subdivision, or any other entity recognized by law as the subject of rights and duties. "Retail tobacco dealer" means any person who engages in the business of selling cigarettes in the City of Chicago to a purchaser for use or consumption and not for resale in any form. "Sale", "resale", "selling" means any transfer of ownership or possession, or both, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever for a valuable consideration. "Stamp" means paper or other material with an imprint or decalcomania device thereon, of such size, design, color and denominations as may be prescribed and procured by the comptroller which, when affixed to a package of cigarettes, shall evidence payment of the tax thereon, as provided by this chapter. "Use" means any exercise of right or power, actual or constructive, and shall include but is not limited to the receipt, storage or any keeping or retention for any length of time, but shall not include possession for sale by a retail or wholesale tobacco dealer as defined in this chapter. "Wholesale tobacco dealer" means any person who engages in the business of selling or supplying cigarettes to any person for resale in the City of Chicago. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 12-15-92, p. 27387; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 7-27-05, p. 53211, § 1; Amend Coun. J. 12-14-05, p. 66648, § 1; Amend Coun. J. 11-19-08, p. 47220, Art. V, § 5; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3; Amend Coun. J. 5-9-12, p. 27485, § 9*; Amend Coun. J. 11-8-12, p. 38872, § 37; Amend Coun. J. 4-19-17, p. 48180, Art. IV, § 1) * Editor's note– Amendments made by Coun. J. 5-9-12, p. 27485, § 9, take effect after the expiration of all cigarette-vending machine operator licenses issued or renewed by the city's Commissioner of Business Affairs and Consumer Protection.

Municipal Code of Chicago § 3-42-020 Tax imposed.

3-42-020 Tax imposed. (a) A tax at the rate of $.059 (fifty-nine mills) per cigarette is hereby imposed upon all cigarettes possessed for sale and upon the use of all cigarettes within the City of Chicago, the ultimate incidence of and liability for payment of said tax to be borne by the consumer of said cigarettes. The tax herein levied shall be in addition to any and all other taxes. (b) Except as otherwise provided by Sections 3-42-050 and 3-42-090 of this chapter, the tax shall be paid by the purchase of tax stamps from the department. It shall be the duty of every wholesale tobacco dealer, before delivering or causing to be delivered any cigarettes to a retail tobacco dealer in the City of Chicago, to purchase from the department a tax stamp for each package of cigarettes and to affix and cancel the tax stamps prior to the delivery of the cigarettes to the retail tobacco dealer. The tax stamps shall be affixed and canceled in the manner prescribed by this chapter or by rules and regulations promulgated by the comptroller. Any wholesale tobacco dealer lawfully in possession of unused or defective tax stamps may return the stamps to the department for reimbursement or credit. (c) Any wholesale tobacco dealer who shall pay the tax imposed by this chapter shall collect the tax from the retail tobacco dealer to whom the sale of the cigarettes is made; and the retail tobacco dealer shall in turn collect the tax from the purchaser of the cigarettes. The tax shall be paid to the person required to collect it as trustee for and on account of the City of Chicago. (d) It shall be unlawful for any business licensed under Title 4 to purchase or receive cigarettes from any person unless the package containing the cigarettes bears an unmutilated tax stamp affixed and canceled as required by this chapter or by the rules and regulations promulgated by the comptroller. Possession by a business licensed under Title 4 of cigarettes having no tax stamp affixed and canceled shall give rise to the prima facie presumption that the cigarettes are possessed in violation of the provisions of this chapter. (e) It shall be unlawful for any retail tobacco dealer or wholesale tobacco dealer to engage in an act of concealment. Any retail tobacco dealer or wholesale tobacco dealer that violates this subsection shall be subject to a fine of $2,000.00 to $10,000.00. Each day that the violation occurs shall be considered as a separate and distinct offense. For purposes of this section, "concealment" means cigarettes, other tobacco products, or cigarette tax stamps, in violation of this subsection, deliberately hidden to prevent or evade discovery and offered for sale by or in the possession of a wholesale or retail tobacco dealer. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 12-15-04, p. 39840, § 1; Amend Coun. J. 12-14-05, p. 66648, § 1; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3; Amend Coun. J. 5-9-12, p. 27485, § 10; Amend Coun. J. 11-26-13, p. 67528, § 1; Amend Coun. J. 12-14-16, p. 39210, § 2; Amend Coun. J. 11-14-18, p. 90308, Art. V, § 4)

Municipal Code of Chicago § 3-42-025 Violations of other laws.

3-42-025 Violations of other laws. It shall be unlawful for any business licensed under Title 4 to purchase or receive cigarettes from any person unless the package containing the cigarettes bears an unmutilated tax stamp affixed and canceled as required by Section 74-435 of the Cook County Code of Ordinances, as amended. Such unlawful conduct shall be a violation of this section. The penalty schedule for violating this section is set forth in Section 74-435 of the Cook County Code of Ordinances, as amended, and is incorporated by reference into this section. Violation of this section shall be deemed a separate and distinct offense from other tax stamp violations of this chapter. (Added Coun. J. 2-15-12, p. 20496, § 5; Amend Coun. J. 11-14-18, p. 90308, Art. V, § 4)

Municipal Code of Chicago § 3-42-030 Comptroller authorized to make rules and regulations.

3-42-030 Comptroller authorized to make rules and regulations. The comptroller may adopt, promulgate, and enforce rules and regulations appropriate to and in furtherance of the purposes of this chapter. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 12-14-05, p. 66648, § 1; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3)

Municipal Code of Chicago § 3-42-040 Tax stamps.

3-42-040 Tax stamps. (a) The comptroller shall contract for and furnish tax stamps of such denominations and quantities as may be necessary for the payment of the tax imposed by this chapter, and may, from time to time, provide for the issuance and exclusive use of stamps of a new design and forbid the use of stamps of any other design. The comptroller may make arrangements for the method of acquiring and paying for such tax stamps. (b) The comptroller may appoint wholesale tobacco dealers of cigarettes and any other person within or without the city as agents to affix stamps to be used in paying the tax hereby imposed and said agent is hereby authorized to appoint other persons in his employ who are to affix said stamps to any cigarettes under his control in the manner prescribed by the rules and regulations promulgated by the comptroller. The comptroller may, in his discretion, permit an agent to pay for such stamps within 30 days after the date of sale, consignment or delivery of such stamps to such agent, provided a bond satisfactory to the comptroller and approved as to form and legality by the corporation counsel shall be submitted by said agent to the comptroller in an amount not less than the par value of such stamps. (c) The comptroller may redeem unused tax stamps lawfully in the possession of any person. No person shall sell or offer for sale any stamp issued under this chapter, except by written permission of the comptroller. The comptroller may prescribe rules and regulations concerning refunds, sales of stamps and redemption under the provisions of this chapter. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 11-19-08, p. 48243, Art. I, § 4; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3)

Municipal Code of Chicago § 3-42-050 Returns required after a tax increase.

3-42-050 Returns required after a tax increase. (a) Every retail tobacco dealer and every wholesale tobacco dealer, who possesses cigarette packages to which City of Chicago tax stamps are affixed or who possesses unused City of Chicago tax stamps purchased prior to the effective date of a City of Chicago tax increase, shall file with the department, on a form prescribed by the comptroller, a tax return attesting to the number of city tax stamps in its possession as of the last day prior to the tax increase and pay to the department the amount of tax due as a result of the tax increase. (b) Each such tax return due under subsection (a) above shall be filed and received by the department by the 15th day following the effective date of any tax increase. (c) Every retail tobacco dealer required to file a tax return under this section who does not file such tax return by its due date, or alternatively does not provide all required information on such tax return, or fails to pay all required tax due computed thereon, shall be subject to a penalty of $100.00 per business location required to be reported on the tax return, in addition to all other penalties and interest that may be due under the provisions of the Uniform Revenue Procedures Ordinance, Chapter 3-4 of this Code. (d) Every wholesale tobacco dealer required to file a tax return under this section who does not file such tax return by its due date, or alternatively does not provide all required information on such tax return, or fails to pay all required tax due computed thereon, shall be subject to a penalty of $1,000.00, in addition to all other penalties and interest that may be due under the provisions of the Uniform Revenue Procedures Ordinance, Chapter 3-4 of this Code. (e) If the comptroller determines that a party to whom the penalties in paragraphs (c) and (d) of this section has accrued had reasonable cause for paying late, underpaying the applicable tax, or filing a late or incomplete tax return, then the applicable penalty shall be waived. (f) The comptroller, or his or her designee, may at any time during the statute of limitations outlined in Section 3-4-120 of this Code, examine the books and records of any party required to file a tax return under this section and may issue a tax determination and assessment to the party as per Section 3-4-160 of this Code if a determination is made that any amount of tax, penalty or interest is due. (g) Every party required to file a tax return under this section who files a complete tax return by its due date and makes timely payment of the amount computed thereon shall be eligible to retain a commission in the amount of one percent of the tax computed due thereon. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 3-31-04, p. 20916, § 3.14; Amend Coun. J. 12-14-05, p. 66648, § 1; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3)

Municipal Code of Chicago § 3-42-060 Inspections.

3-42-060 Inspections. (a) The comptroller, the commissioner of business affairs and consumer protection, or any person authorized by either the comptroller or commissioner may enter the premises of any wholesale or retail tobacco dealer for inspection and examination of property, inventory, books and records for the proper administration of this chapter and enforcement of the collection of the tax imposed. It is unlawful for any person to prevent, hinder or interfere with the comptroller or the commissioner of business affairs and consumer protection or their duly authorized deputy or representative in the discharge of his duties in the enforcement of this chapter. (b) The penalty for violation of this section shall be as set forth in Section 4-64-900(b). (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 7-27-05, p. 53211, § 1; Amend Coun. J. 11-19-08, p. 47220, Art. V, § 5; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3; Amend Coun. J. 5-9-12, p. 27485, § 11; Amend Coun. J. 11-8-12, p. 38872, § 38; Amend Coun. J. 4-19-17, p. 48180, Art. IV, § 2)

Municipal Code of Chicago § 3-42-070 Reserved. Editor's note – Coun. J. 12-14-05, p. 66648, § 1, repealed § 3-42-070, which pertained to recordkeeping and quarterly returns.

Municipal Code of Chicago § 3-42-080 Counterfeit stamps.

3-42-080 Counterfeit stamps. Every person who shall falsely make, alter, forge or counterfeit any tax stamp, or who, with intent to defraud the city, shall affix or cause to be affixed any counterfeit stamp to any package of cigarettes, knowing said stamp to be counterfeit, shall be charged with forgery under the Illinois Criminal Code and shall be subject to prosecution for such crime. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311)

Municipal Code of Chicago § 3-42-090 Alternate methods of collection.

3-42-090 Alternate methods of collection. Notwithstanding the provisions of Sections 3-42-020(b) and (d), and 3-42-040 of this chapter, the comptroller may provide by regulation that the tax imposed by this chapter shall, in the alternative, be collected by means of the issuance and sale of a single tax stamp to be prepared jointly with either or both the Department of Revenue of the State of Illinois and the Department of Revenue of Cook County, evidencing the payment of the tax imposed by this chapter. Toward that end, the comptroller may make such arrangements and agreements with the Department of Revenue of the State of Illinois and the Department of Revenue of Cook County as may be required with respect to the method of acquiring, affixing and canceling and the manner of sharing the cost of such joint single tax stamps, and may establish procedures for payment of that portion of the tax revenue collected by or for the Department of Revenue of the State of Illinois and the Department of Revenue of Cook County due and payable to the City of Chicago, in furtherance of the purposes of this chapter. In the event such alternative method as herein provided is utilized, no other method of collecting said tax may be used; however, all other applicable provisions of this chapter shall nevertheless remain in full force and effect. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 12-14-05, p. 66648, § 1; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3)

Municipal Code of Chicago § 3-42-100 Mutilation of stamps prohibited.

3-42-100 Mutilation of stamps prohibited. (a) It is unlawful for any person to mutilate a tax stamp herein required on any package of cigarettes before it is sold by a retail tobacco dealer. (b) The penalty for violation of this section shall be as set forth in Section 4-64-900(b). (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311; Amend Coun. J. 5-9-12, p. 27485, § 12; Amend Coun. J. 4-19-17, p. 48180, Art. IV, § 3)

Municipal Code of Chicago § 3-42-110 Confiscation of illegal cigarettes and cigarette-vending machines.

3-42-110 Confiscation of illegal cigarettes and cigarette-vending machines. (a) As an alternative to the filing of an action in the circuit court, the comptroller, the commissioner of business affairs and consumer protection, the superintendent of police and their representatives shall have the authority (1) to issue notices of violation, in accordance with Section 2-14-074, to any cigarette purveyor found in possession of unstamped or improperly stamped cigarette packages in violation of this chapter and (2) to seize and store all unstamped or improperly stamped cigarette packages together with any cigarette-vending machines dispensing those cigarette packages. If the purveyor is not the owner of the cigarette packages or cigarette-vending machines, within ten days of the issuance of a notice of violation pursuant to subsection (a) of this section, the department or the commissioner of business affairs and consumer protection shall notify by certified mail the cigarette purveyor and the owner of the cigarette packages or cigarette-vending machines, if the identity of the purveyor and owner is known or reasonably ascertainable, of the date, time and location of a hearing to determine whether the cigarette packages, at the time of issuance of the notice of violation, were unstamped or improperly stamped in violation of the provisions of this chapter. (b) After issuing a notice of violation, the comptroller or the commissioner of business affairs and consumer protection shall institute an action with the department of administrative hearings which shall appoint an administrative law officer who shall conduct the hearing, no later than 45 days after the issuance of the notice of violation, to determine whether the cigarette packages at the time of issuance of the notice of violation, were unstamped or improperly stamped in violation of the provisions of this chapter. If the alleged violation is not contested or the administrative law officer determines by a preponderance of the evidence that any or all of the cigarette packages were unstamped or improperly stamped in violation of the provisions of this chapter, the administrative law officer shall enter an order requiring payment by the cigarette purveyor or the owner of the following penalty for cigarettes possessed in violation of Section 3-42-020: between $2,000.00 and $10,000.00, as well as $50.00 per package for a violation involving over forty packages, plus fees for the seizure and storage of any seized cigarette packages or cigarette-vending machines. Any penalty imposed for a violation of Section 3-42-020 shall be in addition to any penalty imposed for a violation of Section 3-42-025. If the administrative law officer determines a violation, all unstamped or improperly stamped cigarette packages seized under this section shall be forfeited to the city and subsequently destroyed or sold at public sale. Any money contained in a cigarette-vending machine seized under this section shall also be forfeited to the city, unless the administrative law officer determines that the evidence presented by the alleged violator at the hearing established that the money was not consideration for unstamped or improperly stamped cigarette packages. The cigarette purveyor and the owner of the unstamped or improperly stamped cigarette packages or cigarette- vending machines shall be jointly and severally liable for sanctions provided by this section. (c) If the administrative law officer determines a violation, any cigarette-vending machine may be reclaimed, provided that the penalty and fees have been paid. After the expiration of the time during which judicial review of the city's actions may be sought, any cigarette-vending machines not so reclaimed may be disposed of by the department or the commissioner of business affairs and consumer protection as provided by law. (d) The comptroller or the commissioner of business affairs and consumer protection shall have the authority to promulgate rules and regulations setting fees for seizure and daily storage. All fees and penalties imposed pursuant to this section shall constitute debts due and owing the city. The issuance or renewal of any license may be withheld as provided in Section 4-4-150 of this Code, as amended, for such indebtedness. (e) Nothing in this section shall be construed to relieve any person from fine or imprisonment as provided in the uniform revenue procedures ordinance, Chapter 3-4 of this Code, as amended, or from an action to revoke or suspend a license as provided by Section 4-4-280 of this Code, as amended. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 12-15-92, p. 27387; 5-4-94, p. 49311; 7-13-95, p. 4593; Amend Coun. J. 7-10-96, p. 24982; Amend Coun. J. 11-12-97, p. 56813; Amend Coun. J. 4-29-98, p. 66564, § 2; Amend Coun. J. 7-27-05, p. 53211, § 1; Amend Coun. J. 11-19-08, p. 47220, Art. V, § 5; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3; Amend Coun. J. 2-15-12, p. 20496, § 5; Amend Coun. J. 5-9-12, p. 27485, § 13*; Amend Coun. J. 12-9-15, p. 15481, § 1; Amend Coun. J. 12-14-16, p. 39210, § 2) * Editor's note– Amendments made by Coun. J. 5-9-12, p. 27485, § 13, take effect after the expiration of all cigarette-vending machine operator licenses issued or renewed by the city's Commissioner of Business Affairs and Consumer Protection.

Municipal Code of Chicago § 3-42-120 Proceeds to be paid into city treasury.

3-42-120 Proceeds to be paid into city treasury. All proceeds resulting from the imposition of the tax under this chapter, including penalties, shall be paid into the treasury of the City of Chicago and shall be credited to and deposited in the corporate fund of the city, except as may be otherwise provided pursuant to intergovernmental agreement with regard to penalties assessed for violations of Section 3-42-025. (Added Coun. J. 12-9-92, p. 25465; 5-4-94, p. 49311; Amend Coun. J. 2-15-12, p. 20496, § 5)

Municipal Code of Chicago § 3-42-130 Saving clause.

3-42-130 Saving clause. If any provision of this chapter, or the application thereof to any person or circumstances, is held invalid, the remainder of this chapter and the application of such provisions to other persons or circumstances shall not be affected thereby. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311)

Municipal Code of Chicago § 3-42-140 Application of Uniform Revenue Procedures Ordinance.

3-42-140 Application of Uniform Revenue Procedures Ordinance. Whenever not inconsistent with the provisions of this chapter or whenever this chapter is silent, the provisions of the uniform revenue procedures ordinance, Chapter 3-4 of the Municipal Code of Chicago, as amended, shall apply and supplement this chapter. (Added Coun. J. 12-9-92, p. 25465; Amend Coun. J. 5-4-94, p. 49311)

Source: City of Chicago, Municipal Code of Chicago (American Legal Publishing, codelibrary.amlegal.com)URL: https://codelibrary.amlegal.com/codes/chicago/latest/chicago_il/0-0-0-2606983Fetched: 10/24/2026