Legal Question in Tax Law in Illinois

Re: Buying cigarettes online from ''Indian Reservations''

I am unfamiliar with the cigarette tax, but I believe, anecdotally, that it is collected at the source, i.e., the distributor level.

Regarding Illinois sales and use tax, any sale at retail, which is what the purchase of out-of-state cigarettes would be, is subject to a use tax, offset by any sales tax paid to the other jurisdiction. Here, because you paid no sales tax on the internet purchase of cigarettes from the indian reservation, Illinois law requires you to self-declare and file an Illinois use tax return, reporting the transaction and paying the use tax.

This is true of generally all out-of-state purchases. I know of cases where Illinois sales and use tax auditors have reviewed the files of out-of-state jewlers, auto sales, etc. and have sought out the Illinois buyers for tax, interest and penalties. I have lived near the Indiana state line, where cigarettes are sold at retail just accross the border. From time to time, folks with Illinois plates are followed back to Illinois and assessed a use tax. So, while not omniscient, the law is enforced.

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