Synopsis As Introduced Amends the Cigarette Tax Act. Requires the Department of Revenue to issue a request for proposal to acquire and use digital tax stamps. Provides that, upon implementation of the digital stamps, a stamp is considered affixed if 90% or more of the stamp is affixed to the individual package. Contains provisions concerning reimbursement of licensed distributors for costs associated with the initial purchase of a tax stamping machine, and provides a tax collection discount for licensed distributors.
Fiscal Note (Dept. of Revenue)
The fiscal impact for SB 850 is as follows: (1) Cost of the 5.5% distributor reimbursement for new stamping machines (A) Total number of licensed distributors in IL = 96; (B) Estimated cost of a digital stamping machine = $125,000 to $150,000; (C) Statewide cost if each distributor purchased one new digital stamping machine = $12 million to $14.4 million; (D) Portion of Statewide costs eligible for reimbursement by the Department of Revenue = $660,000 to $792,000; (E) Department of Revenue reimbursement cost factoring the Statewide cap on reimbursement = $60,000. (2) Cost of the 0.5% distributor discount for technology and equipment = Without a Statewide or per distributor cap on the total amount of reimbursement possible there is no way to estimate the total cost of the discount the State may have to bare. (3) Additional revenue due to the 90% requirement for an affixed stamp - This change has no direct impact on the revenue generated by the cigarette tax. (4) Additional revenue due to the implementation of a digital tax stamp - Digital tax stamps are unlikely to produce additional cigarette tax revenue.