The Illinois Cigarette Tax Act imposes a tax on the occupation of selling cigarettes at retail. An Illinois cigarette use tax bond is required of sellers to guarantee his or her obligations to the Department of Revenue. Licensed distributors prepay the tax through the purchase of stamps, which are affixed (either heat-transferred or hand applied) to each cigarette package. The distributor collects the tax from the retailer at or before the time of sale. The retailer passes the tax on to the consumer in the cigarette sale price. Illinois provides a convenient tax rate calculator on the DOR website. A cigarette distributor must provide the Illinois cigarette tax bond in form REG-4-A, Financial Responsibility Bond in the amount of $2,500. A cigarette seller must provide the Illinois cigarette use tax bond on the same form however the amount can be as low as $1,000 as determined by the Department of Revenue. The bond obligation is a strict financial guarantee, ensuring that the distributor will pay to the Illinois Department of Revenue (IDOR) all amounts becoming due from the distributor under this Act. The Illinois surety leader, Surety One, Inc., will issue cigarette and tobacco distributor tax bonds for all applicants regardless of credit condition. Visit us at SuretyOne.com, call (787) 333-0222 or (800) 373-2804, or email Underwriting@SuretyOne.com, for a Illinois cigarette use tax bond application or information about any surety bond need. We bond in EVERY state.
