Due to the Cigarette Tax act, anyone that distributes cigarettes or small cigars in the state of Illinois is required to be licensed. In order to apply for your cigarrette distributor license you will need to:
Step #1: Complete application
Step #2: Pay the annual fee of $250
Step #3: Purchase a $2,500 surety bond for each location
What is an Illinois Cigarette Tax Bond?
An Illinois Cigarette Tax Bond serves as a security to guarantee that you will pay taxes on sales revenue from selling tobacco products. An Illinois Cigarette Tax Bond guarantees that you will pay tax to the Department of Revenue.
If you do not pay cigarette taxes, the government agency that holds your bond will file a claim with the surety bond company that issued your bond. The surety company will then investigate the case, and if the claim is found valid the company will pay out the bond penalty to the government agency. However, you are ultimately liable and the surety company will come to you to recover the amount of payment.
How Much Does an Illinois Cigarette Tax Bond Cost?
The price you'll pay for your Illinois Cigarette Tax Bond is based on the risk that the surety bond company will have to pay out on a claim. Your risk is mainly determined by your personal credit history and financial strength.
If you are assessed at a low risk, you will typically pay 1-4% of the total bond amount. Higher risk individuals will have to pay more for their bond, normally between 5-15% of the total bond amount.
The best way to see what you'd pay for your Illinois Cigarette Tax Bond is to get a free quote below: