IL SB1314

Remote retail sellers of cigars and pipe tobacco located outside Illinois must collect and remit the state tobacco products tax if they have $100,000 or more in cumulative gross receipts from Illinois sales or 200 or more separate transactions with Illinois consumers

Beginning January 1, 2026, the tobacco products tax rate changes from 36% of wholesale price to 36% of the actual cost paid by the distributor or remote retail seller for each stock keeping unit (SKU)

A temporary cap of $0.75 per cigar applies to the tax on cigars (excluding little cigars) from January 1, 2026 through December 31, 2028

Remote retail sellers meeting the sales thresholds must obtain an annual license from the Department of Revenue, register under the Retailers' Occupation Tax Act, perform third-party age verification, and maintain records of all tobacco product transactions

Licensed distributors and remote retail sellers may claim a discount of 1.75% (up to $1,000 per month) on timely filed electronic returns to offset record-keeping and compliance costs