New Ordinance Requirements Effective Throughout 2016
Pursuant to an ordinance passed by the City Council on March 16, 2016, please be advised of the following changes to laws regarding the sale of tobacco in the City of Chicago. BACP hosted a workshop to educate the public which can be viewed here.
1) The following changes became effective July 1, 2016. Citations for violations of the following will be issued:
2) All tobacco products must be sold in their original factory-wrapped packaging, except for cigars and pipe tobacco. Fines for violations of this section shall increase to $1,000 - $5,000 for a first offense, and $2,500 - $10,000 for second and subsequent offenses. Taxes imposed on “Other Tobacco Products” (OTP) including cigars, pipe tobacco, smokeless tobacco, and smoking tobacco took effect July 1, 2016, as follows:
a. $1.80 per ounce of smoking tobacco;
b. $0.60 per ounce of pipe tobacco;
c. $0.20 per little cigar; and
d. $0.20 per large cigar.
Beginning October 10, 2016, all coupons and other discounts on tobacco products will be banned. Violation of the ban on coupon and other discounts has been added to the list of tobacco violations which will subject the licensee to a revocation or a non-renewal of a license upon the 3rd violation in a 24-month period.
3) Effective immediately, every person required to collect the new OTP taxes shall keep accurate books and records subject to and available for inspection.
4) If a person commits 2 or more violations of the prohibition on the sale of single cigarettes (MCC 4-64-191) within any 48-month period, the licensee shall be subject to revocation and/or nonrenewal of the license.
5) The new law does not impose price floors. However, if the OTP tax is struck down by the courts, a set of minimum prices (price floors) for tobacco products will be imposed and a minimum package size of 10 for little cigars will go into effect. A description of the potential price floors is listed below. Violations of the price floors or the 10-pack minimum little cigar requirement will provide a basis for license revocation under 4-64-240, which states that any combination of 3 violations within a 24 month period of certain tobacco-related ordinances shall subject the license to revocation. Additionally, violations of price floors or the 10-pack minimum little cigars requirement will also provide a basis for license non-renewal under 4-64-245, which states that any combination of 3 violations within any 24-month period of certain tobacco-related ordinances shall subject the licensee to denial of license renewal.
TOBACCO PRICE FLOORS
The following minimum prices for tobacco products are NOT in effect. If the OTP tax is challenged in court and invalidated, the Municipal Code of Chicago will require retailers to sell the following tobacco products at prices no lower than the following:
These floors may be adjusted on an annual basis to correspond with changes, if any, in the Chicago-Gary-Kenosha area consumer price index. In the event the City amends a price floor, the amended price floor shall not go into effect until 90 days after its announcement.
BACP licenses the sale of tobacco products in Chicago. The rules for tobacco dealing in Chicago are below and on attached pages for your convenience.
Tobacco Sellers Rules and Regulations
In 2013, the Tobacco Sellers Rules and Regulations were instituted. If found liable of possession of unstamped or improperly stamped cigarette packages, seizure and storage fees are assessed. Please read these rules as they may affect your business.
Clean Indoor Air Ordinance (No Smoking, Including E-Cigarettes)
E-cigarettes may not be used anywhere City law already prohibits smoking, which includes within 15 feet of building entryways. Businesses must post no smoking signs. A sign can be downloaded and printed for free. Please visit the Chicago Department of Public Health’s (CDPH) website for additional information.
4-64-515 Prohibited locations – Retail tobacco dealers:
(a) No licensee engaged in the business of retail tobacco dealer shall sell, give away, barter, exchange or otherwise deal in tobacco products, tobacco product samples or tobacco accessories at any location that has a property line within 100 feet of the property line of any building or other location used primarily as a school, child care facility, or for the education or recreation of children under 18 years of age.
(b) No licensee engaged in the business of retail tobacco dealer shall sell, give away, barter, exchange, or otherwise deal in flavored tobacco products, flavored tobacco product samples, or accessories for such products at any location that has a property line within 500 feet of the property line of any public, private, or parochial secondary school located in the City of Chicago. This subsection (b) shall not apply to retail tobacco stores. For purposes of this subsection, “retail tobacco store” has the meaning ascribed to that term in Section 7-32-010.
(c) The Commissioner of Business Affairs and Consumer Protection shall not issue any new tobacco license to engage in the business of retail tobacco dealer at any location that has a property line within 500 feet of the property line of any public, private, or parochial secondary school located in the City of Chicago. This subsection (c) shall not apply to: (1) renewals of licenses existing as of December 31, 2016, or (2) applications for a new tobacco license to engage in the business of retail tobacco dealer pursuant to a purchase of a retail tobacco business at a location that holds such a license on or after December 31, 2016.
(d) The Commissioner of Business Affairs and Consumer Protection and the Commissioner of Health are hereby authorized to promulgate rules necessary or appropriate to enforce this section.
The sale of e-cigarettes requires a Retail Tobacco license. The sale, sampling, bartering, or exchange of e-cigarettes to minors is illegal. Samplers of e-cigarettes, vape pens, e-hookah, and e-juice must obtain a Tobacco Product Sampler license and provide notice to BACP of the location(s) at which they propose to conduct sampling not less than 30 days prior to the actual sampling date. The sale of e-cigarettes is not permitted within 100 feet of a school and/or day care facility. The sale of e-cigarettes in vending machines is illegal. All tobacco products must be stored in a manner that is not physically accessible in any way to a member of the general public, and the sale of tobacco products must involve a direct person-to-person transfer between store agent and customer.
Substitute Ordinance Regarding E-Cigarettes
In the City of Chicago, the City of Chicago and Cook County cigarette tax remittance is evidenced by affixing the City of Chicago tax stamp.
In 2012, BACP began to enforce and write violations for both the Cook County and City of Chicago codes relating to unstamped cigarette sales. Since June 2012, the fines for unstamped cigarette sales have begun at $1,000 for one pack of unstamped cigarette; this mirrors the Cook County fine structure. As mentioned, the City of Chicago tax stamp is inclusive of the Cook County tax stamp.
Tobacco Sales to Minor Program (TS2M)
It is illegal to furnish tobacco products to persons under 21 years of age. BACP tests the sales practices of retailers to determine compliance with Chicago’s underage provisions. The sale of tobacco products to a minor is prohibited, and the required warning sign must be conspicuously posted. BACP investigators, with the assistance of a youth participant, will test a business to determine if a sale is made to the minor. The youth participant will provide his or her actual age to the store clerk. If a sale is made and/or the required warning sign is not posted, enforcement action will be taken.
• NEW! Clean Indoor Air Ordinance Information
• Retail Tobacco Dealer Requirements
• Wholesale Tobacco Dealer Requirements
• What to Expect During a Tobacco Investigation
• 2016 New Tobacco Ordinance Requirements Video