Illinois Department of Revenue
 
 
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Tobacco Products Tax

 
 

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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.

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

  • 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.

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.

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.

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 19019
    SPRINGFIELD IL 62794-9019
 
 
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