Chicago Pre-Empted from Adopting Tobacco Tax 

Monday, February 08, 2016 10:35:00 AM

Illinois state law prohibits the city of Chicago from enacting Emanuel’s proposed taxes

Published in Tobacco E-News


Thomas A. Briant, NATO Executive Director

 CHICAGO -- Chicago Mayor Rahm Emanuel has proposed a sweeping anti-tobacco ordinance that would increase the legal age to purchase tobacco to 21; set minimum prices for certain tobacco products; mandate minimum package sizes for various products; prohibit the redemption of tobacco product coupons; outlaw multipack discount pricing; require minimum package sizes of 20 cigarettes, 20 little cigars and four large cigars unless a cigar has a retail price of more than $3; and enact new taxes on other tobacco products.

The proposed ordinance would tax other tobacco products at the following tax rates:

  • Roll-your-own tobacco at a rate of $6.60 per ounce.

  • Smokeless tobacco at a rate of $1.80 per ounce.

  • Little cigars at a rate of 15 cents per cigar.

  • Large cigars at a rate of 90 cents per cigar.

    While Emanuel is proposing the implementation of these new taxes, Illinois state law prohibits the city of Chicago from enacting any such taxes. 

    Generally, under Illinois state law, a home rule municipality is prohibited from imposing an excise tax on tobacco products unless the municipality had previously adopted such a tax before July 1, 1993.  This prohibition on the adoption of tobacco excise taxes is found in 65 Illinois Compiled Statutes Section 5/8-11-6(a).  Besides this literal prohibition in state law preventing a home rule municipality such as Chicago from adopting a tax on tobacco products, Section 5/8-11-6(a) also states that the pre-emption is a constitutional limit on the authority of home rule cities to enact certain taxes. 

    That is, the state pre-emption of a home rule municipality to assess a tobacco tax originated with the Illinois state constitution.  Moreover, a review of the Chicago city code reveals that the city did not impose a tax on other tobacco products before July 1, 1993.  This absence of a tobacco products excise tax precludes the city of Chicago from now adopting such an excise tax on cigarette roll-your-own tobacco, smokeless tobacco, little cigars and large cigars.  In fact, since 1990 when Section 5/8-11-6(a) of the Illinois Compiled Statutes was enacted, this law has never been construed to permit Chicago or any other home rule municipality in Illinois to tax other tobacco products.

    Moreover, on Jan. 13, 2011, Resolution R2011-19 was introduced before the Chicago City Council urging the Illinois legislature to amend Section 5/8-11-6(a) to “permit home rule units of government in the State of Illinois to have the authority to tax any and all tobacco products.”  The resolution acknowledged that while Chicago presently has the authority to tax cigarettes, a change in state law is required to authorize home rule municipalities to tax other tobacco products.  The resolution subsequently failed to pass the Chicago City Council on May 18, 2011. 

    Also during the 2011 and 2014 Illinois state legislative sessions, bills were introduced to amend Illinois Compiled Statutes Section 5/8-11-6(a) to allow home rule municipalities to enact excise taxes on other tobacco products, regardless of whether such a tax had been imposed before July 1, 1993.  However, these bills were not passed by the Illinois legislature.  These two legislative attempts to clarify existing state law is a further acknowledgement that Chicago cannot enact a tax on tobacco products unless and until the Illinois state legislature changes the pre-emption under state law.

    NATO, the Cigar Association of America and the International Premium Cigar and Pipe Retailers Association have submitted a joint letter to the chairman of the Chicago City Council’s Finance Committee explaining why the tax on other tobacco products cannot be adopted.  The Chicago Finance Committee is scheduled to hold a hearing on the proposed ordinance on Feb. 8.

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Happy Hour Bill 

Wednesday, July 15, 2015 12:47:00 PM


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Thursday, June 04, 2015 3:51:00 PM


(“The Culinary and Hospitality Modernization Act of 2015”) 

The Illinois Licensed Beverage Association introduced, testified and helped move the Happy Hour Bill through the General Assembly.  The ILBA worked with other industry members in this coalition effort.  Senate Bill 398 Amendment 2 passed the Illinois House 82 – 31 and the Senate 52 – 1 during the final weekend hours of the Spring 2015 Session.  As of this writing the Bill will be sent to Governor Rauner’s desk for signature approval.  Below find highlights of the new Happy Hour legislation.




SB 398, the Culinary and Hospitality Modernization Act of 2015, updates the liquor control act to support our robust hospitality industry. SB 398 takes a balanced approach by increasing safeguards for responsible service while allowing for temporary price reductions and other marketing tools.

SB 398 respects the longstanding Illinois precedent of local liquor control. SB 398 DOES NOT PREEMPT HOMERULE.

SB 398

• Prohibits trade practice policies, restoring JCAR as the rulemaking authority for the Liquor Control Act.

• Permits hotels to purchase one state liquor license per address; currently hotels must purchase a license for every bar in the hotel.

• Ends Sunday Blue laws.

• Creates process for infusions to accommodate the needs of modern mixology.

• Requires state-wide responsible server training for all bartenders.

• Allows for reduced price “Happy Hour” on drinks for 15 hours a weeks with certain restrictions:

    - Max 4 hours a day

    - Must end by 10pm

    - No 2 for 1’s

    - No games, mega drinks or contests

• Allows for meal & party packages for food and drink.

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Illinois State Police Post Approved Concealed Carry Signage Specifications Pursuant To The Firearm Concealed Carry Act 

Tuesday, October 15, 2013 2:30:15 PM



ISP Seal
Press Release Date: October 11, 2013

Signs Can Be Posted & Must Meet Regulatory Requirements

SPRINGFIELD – Illinois State Police Officials today released information on regulatory requirements for concealed carry signage under the Firearm Concealed Carry Act (430 ILCS 66/1, et. seq.).

Individuals licensed to carry a concealed firearm under the Firearm Concealed Carry Act are prohibited from carrying a firearm on, or into, any of the prohibited areas listed under Section 65 of the statute.  Private property owners may also prohibit individuals from carrying a concealed firearm on, or into, property under their control.

Owners of any statutorily prohibited area or private property, excluding residences, where the owner prohibits the carrying of firearms must clearly and conspicuously post the Illinois State Police approved sign, in accordance with 430 ILCS 66/1, at the entrance of the building, premises or real property:

HB183, Section 65 (Prohibited Areas) (d) Signs stating that the carrying of firearms is prohibited shall be clearly and conspicuously posted at the entrance of a building, premises, or real property specified in this Section as a prohibited area, unless the building or premises is a private residence. Signs shall be of a uniform design as established by the Department and shall be 4 inches by 6 inches in size….  Please refer to Section 65 (Prohibited Areas) for more information on statutory regulatory requirements for signage as well as where concealed weapons are prohibited.

Pursuant to Section 65(d) of the Firearms Concealed Carry Act, signs must be of a uniform design and the Illinois State Police is responsible for adopting rules for standardized signs.  The Illinois State Police has proposed rules which require a white background; no text (except the reference to the Illinois Code 430 ILCS 66/1) or marking within the one-inch area surrounding the graphic design; a depiction of a handgun in black ink with a circle around and diagonal slash across the firearm in red ink; and that the image be 4 inches in diameter.  The sign in its entirety will measure 4 in x 6 in.

The Illinois State Police’s proposed administrative rules allow the design and posting of a larger sign if the property owner believes the entrance of the building, premises or real property requires it.  The administrative rules proposed by the Illinois State Police would also permit a larger sign to include additional language.  These administrative rules have been filed with the Illinois Secretary of State pursuant to the Illinois Administrative Procedure Act.  

To download a template of the approved sign for use, visit the ISP website at www.isp.state.il.us/firearms/ccw

Concealed Carry permit applications will be available on the ISP website by January 5, 2014.

Concealed Carry Prohibited Area Sign

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Legislative Victories 

Tuesday, February 05, 2013 12:11:30 PM
·        SB1565 – Defeated Minimum Wage Increase from $8.25 to $10.55
·        HB1600 – Defeated Trans Fat Bill
·        HB3665 – Defeated Mandatory 7 Sick Days per Year for Employees.
·        SB3973 – Defeated Ban on Use of Energy Drinks w/Alcohol.
·        Instrumental in Repeal of the SOT Tax.
·        Delayed Indoor Smoking Ban for 12 Years.  
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Wednesday, November 21, 2012 2:33:30 PM
The Illinois Licensed Beverage Association was very active during the 2012 Spring Session of the General Assembly. A total of 460 bills       passed both Chambers so far this year. Additionally many more bills did not pass out of the Legislature. There are many issues that will be  addressed in the Fall 2012 Veto Session scheduled for November 27 – 29 and December 4 – 6, 2012. With the General Election on Tuesday    November 6, 2012, most elected officials will be campaigning in their districts. The Fall Veto Session must be closely monitored because there are many lame duck members.
The ILBA has been protecting hospitality interests in 2012. Below find a few updates from the 2012 session of the 97th General Assembly. 
1.)     Defeated HB 5369 which would set minimum pricing on drinks.
2.) Defeated SB 1565 which would have increased the minimum wage to $10.55.
3.) Defeated SB 3456 which would have provided Illinois Wineries special use permits 
     for special events year round.
4.)   Defeated SB 1531 which would have allowed the closing of a business in Chicago for 30 days if the business had “any” violation.
5.)   Defeated HB 5277 which would have changed the basis for voting dry a district from population totals to registered voter totals.
Passed SB 2900 which requires that taxes on roll your own cigarettes are equal to pre-packed cigarettes taxes.
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Senators Introduce Legislation to Close Tobacco Tax 'Loopholes' 

Monday, May 14, 2012 10:04:51 AM
Would create tax parity for all tobacco products at same per-unit level as cigarettes

CSP Daily News |

WASHINGTON-- U.S.Senators Dick Durbin (D-Ill.), Frank Lautenberg (D-N.J.) and Richard Blumenthal (D-Conn.) have introduced the Tobacco Tax Equity Act to close loopholes in the tax code that allow tobacco companies to avoid the federal cigarette and roll-your-own (RYO) tobacco tax.

Because pipe tobacco is taxed at a lower rate than cigarettes, some companies have begun offering the option of purchasing pipe tobacco and allowing customers to roll their own cigarettes to avoid paying the federal cigarette tax

"The current loopholes in the taxes on tobacco products encourage the use of products like pipe tobacco, smokeless tobacco and 'nicotine candies' as a cheap source of tobacco, particularly among young people. This difference in tax rates doesn't make sense, and we are already seeing tobacco manufacturers abusing them by changing the labels on their products to avoid paying the higher tax. This bill will stop tobacco manufacturers from gaming the system and protect more children and teens from this dangerous habit," Durbin said.

"This legislation will stop big tobacco from exploiting loopholes that cheat the government out of tax dollars," said Lautenberg.

"I am proud to cosponsor the Tobacco Tax Equity Act to eliminate disparities in tobacco tax rates, closing a harmful loophole in our tax code that taxes repackaged pipe tobacco and other tobacco products at lower levels than cigarettes, small cigars and roll-your-own tobacco. This bill equalizes the federal tax rate for all tobacco products to that of cigarettes. It will generate more than a billion dollars in revenue."

They cited a Government Accountability Office (GAO) report published last month that said RYO tobacco products are currently being sold in packages labeled as pipe tobacco--which is taxed at a lower rate--with no change to the product. Also, they cited a recent report by the Centers for Disease Control & Prevention (CDC) that claimed more than $1.3 billion in state and federal revenue has been lost as a result of tobacco manufacturers relabeling RYO tobacco as pipe tobacco. By establishing tax parity and closing loopholes in the tobacco tax code, this bill would generate approximately $4 billion in revenue over five years.

The Tobacco Tax Equity Act would create tax parity by establishing the tax rate on all tobacco products at the same per-unit level as cigarettes. This legislation would eliminate the current tax incentive for tobacco companies to label RYO tobacco as pipe tobacco in order to sell their product at a lower cost, the senators said.

Source: CSP Daily News
Related Terms: Tobacco, Cigarettes, RYO

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The Department of Revenue proposed an amendment that will impact establishments that sell alcohol at retail:  

Friday, January 06, 2012 4:25:57 PM



The Department of Revenue proposed an amendment that will impact establishments that sell alcohol at retail:         
The Department of Revenue proposed an amendment to "Retailers' Occupation Tax" (86 Ill. Adm. Code 130; 35 Ill. Reg. 19649) requiring liquor retailers who sell alcoholic liquor at retail through a liquor store, tavern, or restaurant to file a monthly statement listing the total amount paid for liquor during the preceding calendar month electronically beginning 2/1/12. The amendment also allows the taxpayer to petition DOR for a waiver of the electronic filing requirement if the taxpayer does not have access to the Internet. (DOR states that it is curtailing the option to file the information by telephone.) 
Bottom Line: This rulemaking is proposed as part of an effort to eliminate the Department of Revenue's TeleFile program. These rules currently require liquor retailers to file a monthly statement of liquor purchases on an ST-1 return that is Tele-filed. This amendment eliminates the requirement to TeleFile the ST-1 return and instead requires that liquor retailers filing their monthly statement of liquor purchases include this statement on an ST-1 return that is electronically filed. The rules specify that this change will be effective for returns due on and after February 1, 2012. The statute mandating that liquor retailers file a monthly statement allows the Department to adopt rules requiring the statement to be filed either electronically or telephonically. Originally the Department chose to require telephonic filing; however, the number of telephonic filers has dropped significantly, while the number of electronic filers has increased significantly. Due to these factors, as well as budgetary constraints, the Department has chosen to discontinue its TeleFile program. These rules implement that determination. The rules do provide however that a taxpayer may petition for a waiver of the electronic filing requirement. The Department has made this accommodation for taxpayers that demonstrate they do not have access to the Internet. Persons who wish to submit comments or have questions are encouraged to contact Jerilynn Troxell-Gorden, Illinois Department of Revenue's Legal Services Office at (217) 782-2844 or Jerilynn.Gorden@Illinois.gov. Click here to submit comments.

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