Next time you see someone smoking in a nonsmoking area and you are just about to ask them to put it out, well here is one reason to do a double check first. An electronic cigarette looks almost exactly like a real cigarette and it is easy to mistake someone using an electronic cigarette for smoking a real cigarette. However, it is actually a battery operated device that allows one to inhale vaporized nicotine and simulates the experience of smoking a real cigarette.

How Electronic Cigarettes Work Unlike a regular cigarette, you don’t need matches to smoke an e cig, they are powered by a rechargeable lithium battery. Hidden inside the e cig is a chamber that contains miniaturized electronics and an atomizer. The function of the tiny atomizer is to vaporize the liquid nicotine turning it into an aerosol mist, and it is activated by the inhaling action of the user, by “taking a puff”. The liquid nicotine is hidden inside another refillable chamber that on the outside looks like the filter of a cigarette, where the smoker places their mouth to inhale.

When a person smokes an electronic cigarette they look exactly like they are smoking a tobacco filled cigarette. By inhaling, the smoker pulls the liquid nicotine into the atomizer chamber, the electronics heat up the liquid and vaporizes it and passes the vapor on to the smoker.

The nicotine vapor enters the smokers’ lungs and voila, a nicotine high occurs. The vapor even looks like cigarette smoke. Other features of the e cig may include a led light at the end of the cigarette that emulates the flame of burning tobacco.

Invention In 1963, Herbert Gilbert patented “a smokeless non tobacco cigarette”. In his patent Gilbert described how his device worked, by “replacing burning tobacco and paper with heated, moist, flavored air.” Gilbert’s device involved no nicotine, smokers of Gilbert’s device enjoyed flavored steam. Attempts to commercialize Gilbert’s invention failed and his product fell into obscurity. However, it deserves a mention as the earliest patent for an electronic cigarette.

Better known is the the invention of Chinese pharmacist Hon Lik, who patented the first nicotine based electronic cigarette in 2003. The following year, Hon Lik was the first person to manufacture and sell such a product, first in the Chinese market and then internationally.

Are They Safe? Electronic cigarettes are no longer considered a smoking cessation tool as they were once promoted as being. Nicotine is addictive, however, e cigs do not have the harmful tars that regular commercial cigarettes do contain but unfortunately they might have other harmful chemical ingredients included. Toxic substance found in an examination of e cigs by the FDA included things like diethylene glycol, a toxic chemical used in antifreeze.

There is also controversy over how to regulate electronic cigarettes, age restrictions, and if they should or should not be included in smoking bans. Secondhand vapors could be just as bad as secondhand smoke. Some countries have banned the sale and marketing of e cigs entirely.

In September 2010, the FDA issued a number of warning letters to electronic cigarette distributors for various violations of the Federal Food, Drug, and Cosmetic Act including “violations of good manufacturing practices, making unsubstantiated drug claims, and using the devices as delivery mechanisms for active pharmaceutical ingredients.”

A Booming Business If electronic cigarettes do continue to remain legal in the United States and other countries, there are huge profits to be made. According to manufacturers make between $250 million to $500 million estimated annually and while that is a small portion of the $100 billion US tobacco market, a government survey found that 2.7% of U.S. adults had tried e cigarettes by 2010, up from 0.6% a year earlier, the kind of statistics that potential trends are made of.

Cigarette & cigarette use taxes

European cigarettes suppliers and european cigarettes manufacturers at – [page 1 of 10]

  • Cigarette Tax 35 ILCS 130/1 to 130/30
  • Cigarette Use Tax 35 ILCS 135/1 to 135/37

Electronic Services

  • MyTax Illinois
  • Tax Prep Software


The Cigarette Tax Act imposes a tax on the occupation of selling cigarettes at retail. 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.

The Cigarette Use Tax Act imposes a tax on the privilege of using cigarettes in Illinois. This act duplicates the provisions of the Cigarette Tax Act.

“Cigarette” means any roll for smoking made wholly or in part of tobacco irrespective of size or shape and whether or not such tobacco is flavored, adulterated or mixed with any other ingredient, and the wrapper or cover of which is made of paper or any other substance or material except tobacco.

NOTE Tobacco products other than cigarettes are also taxed. (See “Tobacco Products Tax.”)

The Tobacco Products Tax Act imposes the tax on little cigars at the same rate as the tax imposed on cigarettes under the Cigarette Tax Act and the Cigarette Use Tax Act. Little cigars sold in packages of 20 or 25 sticks must be affixed with a cigarette tax stamp. Distributors selling both cigarettes and little cigars are considered “stamping distributors.” See below for licensing and form filing requirements for stamping distributors. Stamping Distributors also must meet all the filing requirements of a tobacco products distributor.

“Little cigar” means and includes any roll, made wholly or in part of tobacco, where such roll has an integrated cellulose acetate filter and weighs less than 4 pounds per thousand and the wrapper or cover of which is made in whole or in part of tobacco.

Tax Rate

Use the “Tax Rate Database” to locate the rate for both Cigarette Tax and Cigarette Use Tax.

Allowable Deductions

  • sales out of state
  • cigarettes and little cigars returned to manufacturers
  • cigarettes and little cigars lost through fire, theft, etc., if the loss is supported by proper documentation
  • sales to residents incarcerated in penal institutions and to resident patients of state operated mental health facilities when the cigarettes or little cigars have been manufactured as part of a correctional industries program
  • sales to U.S. military personnel through officially recognized agencies physically located at military bases and
  • direct sales to U.S. veteran’s hospitals.

Additional Registration, License fee and bonding requirements

In addition to filing Form REG 1, Illinois Business Registration Application, distributors must pay a $250 annual fee and post a $2,500 bond for each location. You may also register using MyTax Illinois.

Form IDR 169, Application for Cigarette Transporter Permit, must be completed if unstamped cigarettes will be
&bull purchased as a sale for resale in a state other than Illinois,
&bull transported through Illinois but not sold in Illinois, and
&bull delivered to another state.

These cigarettes cannot be returned to Illinois.

Distributors selling both cigarettes and little cigars are considered “stamping distributors” and must be licensed under the Cigarette Tax Act or the Cigarette Use Tax Act and the Tobacco Products Tax Act.

Secondary distributors must also be licensed. A secondary distributor is any person engaged in the business of selling cigarettes, who purchases stamped original packages of cigarettes from a licensed distributor under the Cigarette Tax Act or the Cigarette Use Tax Act, sells 75 percent or more of those cigarettes to retailers for resale, and maintains an established business where a substantial stock of cigarettes is available to retailers for resale.

Local Taxes

Cigarette taxes may exist in both home rule and non home rule municipalities. The Department of Revenue does not collect locally imposed cigarette taxes.

Form/Filing & Payment Requirements Cigarette Distributors

  • The in state distributors return, Form RC 6, Cigarette and Little Cigar Revenue Return, is due monthly by the 15th day of the month following the end of the reporting period.
  • The out of state distributors return, Form RC 6 A, Out of State Cigarette and Little Cigar Revenue Return, is due monthly by the 15th day of the month following the end of the reporting period.
  • Form RC 25, Cigarette Importation Report, must be filed by distributors by the first business day of the month following the end of the reporting period.
  • Form RC 1 A, Cigarette Tax Stamp Order Invoice, is filed as needed to purchase cigarette tax stamps.
  • Form RCS 36 Schedule CSM, Sales of Cigarettes and Little Cigars to Illinois Secondary Cigarette Distributors, must be filed using MyTax Illinois and is due by the 15th day of the month following the transaction being reported.
  • Form RC 55, Unstamped Little Cigar Sticks Tax Return, is due monthly by the 15th day of the month following the end of the reporting period.

Stamping Distributors

  • Form RC 6
  • Form RC 6 A
  • Form RC 25
  • Form RC 1 A
  • Form RCS 36 Schedule CSM
  • Form RC 55
  • Form TP 1, Tobacco Products Tax Return, is due by the 15th day of the month following the month in which the tobacco products were sold or otherwise disposed.

Secondary Distributors

  • Form RCS 1, Secondary Distributors/Manufacturer Representatives Report, must be filed using MyTax Illinois and is due monthly by the 15th day of the month following the end of the reporting period.

Cigarette Manufacturers

  • Form RC 36 Schedule CM, Sales of Cigarettes and Little Cigars into Illinois by Manufacturers or Importers, is due by the 5th day of the month following the transaction being reported.

Unlicensed Individuals

  • Form RC 44, Cigarette Use Tax Return, is filed as needed, on a per purchase basis, to pay tax on unstamped cigarettes purchased from a seller and is due within 30 days of the purchase.

Electronic Filing

A taxpayer who has 30 or more transactions per month must file electronically. For more information refer to RC 750, Electronic Filing Cigarette Returns. Most Cigarette Tax and Cigarette Use Tax returns and reports can be filed for free at MyTax Illinois.

Electronic Payments

Beginning July 1, 2003, all cigarette tax stamp purchases must be paid by Electronic Funds Transfer (EFT).


  • Call us weekdays from 8 00 a.m. to 4 00 p.m. at 217 782 6045
  • Write us at