TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.100 NATURE OF THE TAX
Section 425.100
Nature of the Tax
a) The corporate
authorities of any municipality may, by ordinance, impose a tax upon all
persons engaged in the business of selling cannabis, other than cannabis
purchased under the Compassionate Use of Medical Cannabis Program Act [410 ILCS 130], at retail in the municipality. The Tax
is imposed on the cannabis retailer.
b) Persons subject to any Tax
imposed under the Law may reimburse themselves for their seller's tax liability
under the Law by separately stating the Tax as an additional charge. That charge
may be stated in combination (in a single amount) with any State or local tax
administered by the Department that sellers are required to collect.
c) The Tax imposed under
the Law and all civil penalties that may be assessed as an incident of the Tax shall
be collected and enforced by the Department of Revenue. [65 ILCS
5/8-11-23]
 | TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.105 DEFINITIONS
Section 425.105
Definitions
"Act" means the Cannabis Regulation and Tax
Act [410 ILCS 705].
"Cannabis" means
marijuana, hashish, and other substances
that are identified as including any parts of the plant Cannabis sativa and
including derivatives or subspecies, such as indica, of all strains of
cannabis, whether growing or not;
the seeds of the plant;
the resin extracted from any part of the
plant;
any compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin,
including tetrahydrocannabinol (THC) and all other naturally produced
cannabinol derivatives, whether produced directly or indirectly by extraction;
and
cannabis flower, concentrate, and
cannabis-infused products.
"Cannabis" does not include:
the mature stalks of the plant;
fiber produced from the stalks;
oil or cake made from the seeds of the
plant;
any other compound, manufacture, salt,
derivative, mixture, or preparation of the mature stalks (except the resin
extracted from it), fiber, oil or cake;
the sterilized seed of the plant that is
incapable of germination;
industrial hemp as defined and authorized
under the Industrial Hemp Act [505 ILCS 5]; or
cannabis that is subject to tax under the
Compassionate Use of Medical Cannabis Program Act. [410 ILCS 705/1-10]
"Cannabis business
establishment" means a cultivation center, craft grower, processing
organization, infuser organization, dispensing organization, or transporting
organization licensed under the Cannabis Regulation and
Tax Act.
[410
ILCS 705/1-10]
"Cannabis concentrate" means a
product derived:
from cannabis that is produced by
extracting cannabinoids, including tetrahydrocannabinol (THC), from the plant
through the use of:
propylene glycol, glycerin, butter, olive
oil or other typical cooking fats;
water, ice, or dry ice; or
butane, propane, CO2, ethanol,
or isopropanol; and
with the intended use of smoking or making
a cannabis-infused product. [410 ILCS 705/1-10]
"Cannabis flower" means
marijuana, hashish, and other substances that are identified as including any
parts of the plant Cannabis sativa and including:
derivatives or
subspecies, such as indica, of all strains of cannabis; and
raw kief, leaves, and buds, but not:
resin that has
been extracted from any part of the plant; nor
any compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin. [410 ILCS
705/1-10]
"Cannabis-infused product" means
beverage, food, oils, ointments, tincture, topical formulation, or another
product containing cannabis that is not intended to be smoked. [410 ILCS
705/65-5]
"Cannabis retailer" means a
dispensing organization licensed under the Cannabis Regulation and Tax Act that
sells cannabis for use and not for resale. [410 ILCS 705/65-1]
"Department" means the Department of
Revenue.
"Gross receipts" from the sales of cannabis
by a cannabis retailer means the total selling price or the amount of such
sales. In the case of charges and time sales, the amount thereof shall be
included only when payments are received by the cannabis retailer.
"Law" means the Municipal Cannabis Retailers'
Occupation Tax Law [65 ILCS 5/8-11-23].
"Municipal Cannabis Retailers' Occupation
Tax" or "Tax" means the Tax imposed by the Law.
"Person" means:
a natural individual, firm, partnership, association,
joint stock company, joint adventure, public or private corporation, limited
liability company; or
a receiver, executor, trustee, guardian, or other
representative appointed by order of any court.
"Purchaser" means a person who acquires
cannabis for a valuable consideration.
"Selling price" or "Amount of sale"
means the consideration for a sale valued in money, whether received in money
or otherwise, including cash, credits, property, and services, and shall be
determined without any deduction on account of the cost of the property sold,
the cost of materials used, labor or service cost, or any other expense whatsoever,
but does not include separately stated charges identified on the invoice by
cannabis retailers to reimburse themselves for their Tax liability under the
Law. However, "selling price" does not include consideration paid
for:
any charge for a payment that is not honored by a
financial institution;
any finance or credit charge, penalty or charge for
delayed payment, or discount for prompt payment; and
any amounts added to a purchaser's bill because of
charges made under the Municipal Cannabis Retailers' Occupation Tax Law, the
Cannabis Purchaser Excise Tax Law [410 ILCS 705/Art.65], the County Cannabis
Retailers' Occupation Tax Law [55 ILCS 5/5-1006.8], the Use Tax Act [35 ILCS
105], the Service Use Tax Act [35 ILCS 110], or any locally imposed occupation
tax.
"Taxpayer" means a cannabis retailer who is
required to remit the Tax imposed under the Law.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.110 TAX IMPOSED
Section 425.110
Tax Imposed
a) The corporate
authorities of any municipality may, by ordinance, impose a Tax upon all
persons engaged in the business of selling cannabis, other than cannabis
purchased under the Compassionate Use of Medical Cannabis Program Act, at
retail in the municipality on the gross receipts of the
sales made in the course of business. If imposed, the Tax shall be imposed
only in 0.25% increments. The Tax rate may not exceed 3% of the gross receipts
of sales made in a municipality. [65 ILCS 5/8-11-23(a)]
b) The sale of any product
that contains any amount of cannabis or any derivative of cannabis is subject
to the Tax under subsection (a) on the full selling price of the product.
c) The Tax is not imposed
with respect to any transaction in interstate commerce, to the extent the
transaction may not, under the Constitution and statutes of the United States,
be made the subject of taxation by this State.
d) The Tax is in addition
to all other occupation, privilege, or excise taxes imposed by the State of
Illinois or by any municipal corporation or political subdivision thereof.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.115 BUNDLING OF TAXABLE AND NONTAXABLE ITEMS; PROHIBITION; TAXATION
Section 425.115
Bundling of Taxable and Nontaxable Items; Prohibition; Taxation
a) Section 15-70(n)(17) of
the Act prohibits dispensing organizations from selling cannabis,
cannabis-infused products, and concentrates in combination or bundled with each
other or any other items for one price. If a cannabis retailer sells cannabis,
concentrate, or cannabis-infused products in combination or bundled with items
that are not subject to Tax under the Law for one price in violation of the
prohibition on this activity in Section 15-70 of the Act, then the Tax is
imposed on the selling price of the entire bundled product.
EXAMPLE: A cannabis retailer makes gift baskets that
contain a ¼ ounce of cannabis that normally sells for $60, a pipe that normally
sells for $20, 4 cannabis-infused pods that normally sell for $40, and an
electronic device the pods can be used with that normally sells for $45. The
cannabis retailer offers the basket for $135. The Tax is imposed on the
selling price of $135.
b) Each item of
cannabis, concentrate and cannabis-infused product must be separately
identified by quantity and price on the receipt. [410 ILCS
705/15-70(n)(17)]
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.120 REGISTRATION OF CANNABIS RETAILERS
Section 425.120
Registration of Cannabis Retailers
a) It shall be unlawful for
any cannabis retailer to engage in the business of selling cannabis at retail
in this State without a certificate of registration from the Department.
b) Every person subject to
the Tax under the Law shall apply to the Department (on a form prescribed and
furnished by the Department) for a certificate of registration under the Law. Application
for a certificate of registration shall be made to the Department on forms
furnished by the Department.
c) The certificate of
registration that is issued by the Department to a retailer under the
Retailers' Occupation Tax Act [35 ILCS 120] shall permit a person to
engage in the business of selling cannabis under the Law without registering
separately with the Department. If a retailer holding a certificate of
registration under the Retailers' Occupation Tax Act engages in the business of
selling cannabis at another location in this State, the Department shall
furnish him or her with a sub-certificate of registration for that place of
business, and the applicant shall display the appropriate sub-certificate of
registration at that place of business. The sub-certificate of registration
shall bear the same registration number as that appearing upon the certificate
of registration to which the sub-certificate relates. [35 ILCS 120/2a] A
certificate of registration or sub-certificate of registration issued under the
Retailers' Occupation Tax Act waives the registration requirements under this
Section. However, the Department may require the retailer to provide such
other information as the Department may reasonably require for it to administer
and enforce the provisions of the Law. A retailer may not engage in the
business of selling cannabis until he or she is issued a certificate of
registration.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.125 REVOCATION OF CERTIFICATE OF REGISTRATION
Section 425.125
Revocation of Certificate of Registration
a) The revocation of a
cannabis retailer's certificate of registration under the Retailers' Occupation
Tax Act revokes a cannabis retailer's certificate of registration under the
Law.
b) The Department shall
notify the Department of Financial and Professional Regulation upon revocation
of a certificate of registration issued to a cannabis retailer.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.130 RETURN AND PAYMENT OF TAX BY CANNABIS RETAILERS
Section 425.130
Return and Payment of Tax by Cannabis Retailers
a) Retailers shall file
all cannabis Tax returns and shall make all cannabis Tax payments by electronic
means in the manner and form required by the Department. [35 ILCS 120/3]
b) The information required
for the Tax shall be furnished on the cannabis retailer's State cannabis
dispensary Tax return.
c) If the cannabis retailer
files its Illinois Retailers' Occupation Tax returns on the gross receipts
basis, it must report Municipal Cannabis Retailers' Occupation Tax information
in its returns on the same basis. If the cannabis retailer files its Illinois
Retailers' Occupation Tax returns on the gross sales basis, it must report
Municipal Cannabis Retailers' Occupation Tax information in its returns on the
gross sales basis.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.135 BOOKS AND RECORDS
Section 425.135 Books
and Records
a) Every cannabis retailer
shall keep books and records of all sales of cannabis, together with invoices,
bills of lading, sales records, copies of bills of sale, inventories prepared
as of December 31 of each year, or otherwise annually as has been the custom in
the specific trade, and other pertinent papers and documents. For purposes of
this Section, "records" means all data maintained by the cannabis
retailer, including data on paper, microfilm, microfiche or any type of
machine-sensible data compilation.
b) All books and records and
other papers and documents that are required by the Law to be kept shall be
kept in the English language and shall, at all times during business hours of
the day, be subject to inspection by the Department or its duly authorized
agents and employees.
c) It shall be presumed that
all sales of cannabis are subject to Tax under the Law until the contrary is
established, and the burden of proving that a transaction is not taxable under this
Part shall be upon the cannabis retailer.
d) Penalties
1) Except for the books and
records identified in subsection (e), any cannabis retailer who fails to keep
books and records, or fails to produce books and records for examination as
required by this Section, is liable to pay to the Department, for deposit into
the Tax Compliance and Administration Fund, a penalty of:
A) $1,000 for the first
failure to keep books and records or produce books and records for examination;
and
B) $3,000 for each subsequent
failure to keep books and records or produce books and records for examination.
2) The penalties imposed
under this subsection (d) shall not apply if the taxpayer shows that it acted
with ordinary business care and prudence.
e) All books and records kept
by a cannabis retailer, pursuant to rules adopted by the Department of
Financial and Professional Regulation to implement the Act, shall, at all times
during business hours of the day, be subject to inspection by the Department or
its duly authorized agents and employees. The Department shall also have
access to the cannabis retailer's automated data processing and/or point of
sale system.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.140 CLAIMS AND CREDIT MEMORANDA
Section 425.140 Claims
and Credit Memoranda
Cannabis retailers
may file claims for credit or refund of Taxes in accordance with the
procedures, limitations, and restrictions contained in Sections 6, 6a, 6b, 6c,
and 6d of the Retailers' Occupation Tax Act.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.145. PENALTIES AND INTEREST; PROCEDURES
Section 425.145.
Penalties and Interest; Procedures
a) All penalties (both
civil and criminal), provisions concerning interest and procedures (such as the
making of assessments, the venue and mode of conducting hearings, subpoenas,
matters pertaining to judicial review and other procedural subjects), together
with statutes of limitation, are the same under the Law as under the Illinois
Retailers' Occupation Tax Act.
b) All provisions of the
Uniform Penalty and Interest Act [35 ILCS 735] that are not inconsistent with
the Law shall apply.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.150 ORDINANCES AND RESOLUTIONS IMPOSING OR DISCONTINUING A TAX
Section 425.150
Ordinances and Resolutions Imposing or Discontinuing a Tax
a) An ordinance or
resolution imposing or discontinuing a Tax under the Law or effecting a change
in the rate of the Tax that is adopted on or after June 25, 2019 (the effective
date of Public Act 101-27), and for which a certified copy is filed with the
Department on or before April 1, 2020, shall be administered and enforced by
the Department beginning on July 1, 2020.
b) For ordinances filed
with the Department after April 1, 2020, an ordinance or resolution imposing or
discontinuing the Tax or effecting a change in the rate of the Tax shall either:
1) be adopted, with a
certified copy of the ordinance filed with the Department, on or before the
first day of April. After the filing, the Department will proceed to administer
and enforce the Law as of the first day of July next following the adoption and
filing; or
2) be adopted, with a
certified copy of the ordinance filed with the Department on or before the
first day of October. After the filing, the Department will proceed to
administer and enforce the Law as of the first day of January next following
the adoption and filing. [65 ILCS 5/8-11-23(f)]
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 425
MUNICIPAL CANNABIS RETAILERS' OCCUPATION TAX
SECTION 425.155 ADMINISTRATION AND ENFORCEMENT
Section 425.155
Administration and Enforcement
a) The Department shall
have full power to:
1) administer and
enforce the Law;
2) collect all Taxes and
penalties due under the Law;
3) submit to the State
Treasurer, for deposit in the Local Cannabis Retailers' Occupation Tax Trust
Fund, all Taxes and penalties collected under the Law, excluding those
described in Section 425.135(d); and
4) determine all rights
to credit memoranda arising on account of the erroneous payment of Tax or
penalty under the Law.
b) In the administration
of and compliance with the Law, the Department and persons who are subject to
the Law shall have the same rights, remedies, privileges, immunities, powers
and duties, and be subject to the same conditions, restrictions, limitations,
penalties, and definitions of terms, and employ the same modes of procedure, as
are described in Sections 1, 1a, 1d, 1e, 1f, 1i, 1j, 1k, 1m, 1n, 2 through 2-65
(in respect to all provisions therein other than the State rate of tax), 2a,
2b, 2c, 2i, 3 (except as to the disposition of taxes and penalties collected),
4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5h, 5i, 5j, 5k, 5l, 6, 6a, 6b, 6c, 6d, 7, 8,
9, 10, 11, 11a, 12, and 13 of the Retailers' Occupation Tax Act and Section 3-7
of the Uniform Penalty and Interest Act as fully as if those provisions were
set forth in the Law. [65 ILCS 5/8-11-23]
c) To avoid needless
repetition, the substance and provisions of all Retailers' Occupation Tax
Regulations (86 Ill. Adm. Code 130) that are not incompatible with the Law will
apply in implementation of the Law.
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