HB5108 Summary

• Effective January 1, 2025, remote retail sellers meeting specified sales thresholds ($100,000 cumulative gross receipts or 200+ separate transactions to Illinois consumers) are required to collect and remit tobacco tax on cigars and pipe tobacco sales.

• Changes tax calculation method beginning January 1, 2025 from wholesale price to 36% of actual cost paid by distributors and remote retail sellers for each stock keeping unit (SKU), or actual cost list price if actual cost documentation is unavailable.

• Requires remote retail sellers meeting the threshold criteria to obtain a license from the Department of Revenue, register under the Retailers' Occupation Tax Act, perform age verification, and maintain certified actual cost lists.

• Imposes a cap of $0.75 per cigar for tax purposes from January 1, 2025 through December 31, 2027, excluding little cigars.

• Establishes eligibility restrictions for remote retail seller licenses, including exclusions for individuals convicted of tobacco tax evasion and entities in default on state tax obligations; allows Department to revoke licenses for non-compliance with registration, reporting, or state law requirements.