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Record #: O2018-4192   
Type: Ordinance Status: Failed to Pass
Intro date: 5/25/2018 Current Controlling Legislative Body: Committee on Finance
Final action:
Title: Amendment of Municipal Code Chapter 3-47 by further regulating collection and receipt of tax imposed on purchasers of liquid nicotine products
Sponsors: Burke, Edward M.
Topic: MUNICIPAL CODE AMENDMENTS - Title 3 - Revenue & Finance - Ch. 47 Chicago Liquid Nicotine Product Tax
Attachments: 1. O2018-4192.pdf
Related files: R2019-362

WHEREAS, the City of Chicago is a home rule unit of government pursuant to the 1970 Illinois Constitution, Article VII, Section 6(a); and

WHEREAS, pursuant to its home rule power, the City of Chicago may exercise any power and perform any function relating to its government and affairs including the power to regulate for the protection of the public health, safety, morals, and welfare; and

WHEREAS, in 2015 the Chicago City Council created a liquid nicotine tax (the Tax) in an effort to remain current with smoking product developments; and

WHEREAS, the tax also signaled the City's commitment to regulate and track sales of those products and to ensure that these are sold to the intended user—an adult with full awareness of the product's detrimental effects; and

WHEREAS, to that end, the tax was imposed on liquid nicotine products defined in the ordinance as "(1) any electronic cigarette containing liquid, gel, or other solution that contains nicotine; and (2) any other container of liquid, gel, or other solution where the liquid, gel, or other solution (i) contains nicotine and (ii) is intended to be utilized in an electronic cigarette:" and

WHEREAS, although the "ultimate" liability for the tax is to be borne on the purchaser, the collection obligations begin with the wholesaler, with the retailer responsible where the tax has not been collected at wholesale and the consumer responsible where it has not been collected at retail; and

WHEREAS, the current regulatory structure leaves a sizable potential product loophole and a potential enforcement gap; and

WHEREAS, for example, as far as products, the tax ignores electronic cigarette devices that are sold in starter packs with the actual smoking device or e-cigarette; and

WHEREAS, this defeats the argument that devices that are not pre-filled with nicotine products should avoid the tax because it is not a given that they are intended for nicotine use; and

WHEREAS, as far as tax collection enforcemen...

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