Bill Text: IL HB2880 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Creates the Prescription Drug Price Increase Tax Act. Imposes a tax on each establishment that makes the first sale of a covered outpatient drug within the State. Provides that the term "first sale" means an initial sale of a covered outpatient drug from a manufacturer to a wholesaler or from a wholesaler to a pharmacy. Provides that the tax shall be charged against and paid by the establishment making the first sale and shall not be added as a separate charge or line item or otherwise passed down on any invoice to the customer. Provides that the proceeds shall be deposited into the Prescription Drug Fairness Fund and used by the Department of Healthcare and Family Services. Amends the State Finance Act to create the Prescription Drug Fairness Fund.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB2880 Detail]

Download: Illinois-2019-HB2880-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB2880 Introduced , by Rep. Will Guzzardi SYNOPSIS AS INTRODUCED:
New Act
30 ILCS 105/5.891 new
Creates the Prescription Drug Price Increase Tax Act. Imposes a tax on each establishment that makes the first sale of a covered outpatient drug within the State. Provides that the term "first sale" means an initial sale of a covered outpatient drug from a manufacturer to a wholesaler or from a wholesaler to a pharmacy. Provides that the tax shall be charged against and paid by the establishment making the first sale and shall not be added as a separate charge or line item or otherwise passed down on any invoice to the customer. Provides that the proceeds shall be deposited into the Prescription Drug Fairness Fund and used by the Department of Healthcare and Family Services. Amends the State Finance Act to create the Prescription Drug Fairness Fund.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Prescription Drug Price Increase Tax Act.
Section 5. Definitions. As used in this Act:
"Average manufacturer price" has the meaning given to that
term in 42 U.S.C. 1396r-8.
"Baseline average manufacturer price" means the average
manufacturer price for the dosage, form, and strength of the
covered outpatient drug for the first full calendar quarter
after the day on which the drug was first marketed.
"Covered outpatient drug" has the meaning given to that
term in 42 U.S.C. 1396r-8.
"First sale" means an initial sale of a covered outpatient
drug from a manufacturer to a wholesaler or, if the sale from
the manufacturer to the wholesaler is not subject to the tax
under this Act, from the wholesaler to a pharmacy. Any such
sale of a covered outpatient drug within the State shall be
presumed to be the first sale of the covered outpatient drug
unless the seller can prove that the tax is due from another
establishment within the chain of title.
"Inflation-adjusted baseline average manufacturer price"

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means the baseline average manufacturer price increased by the
percentage by which the Consumer Price Index for All Urban
Consumers (United States city average) for the month before the
month in which the sale occurs exceeds that index for the month
before the first month of the first full calendar quarter after
the day on which the drug was first marketed, regardless of
whether the covered outpatient drug has been sold or
transferred to an entity, including a division or subsidiary of
the manufacturer, after the first day of that quarter.
Section 10. Tax imposed.
(a) On and after January 1, 2020, any establishment that
makes the first sale of a covered outpatient drug within the
State is liable for a tax equal to 100% of the difference
between the gross amount received for the first sale of the
covered outpatient drug and the inflation-adjusted baseline
average manufacturer price of the covered outpatient drug.
(b) This tax shall be charged against and paid by the
establishment making the first sale and shall not be added as a
separate charge or line item or otherwise passed down on any
invoice to the customer.
(c) Any invoice associated with the first sale of a covered
outpatient drug shall state the establishment making the sale's
liability for the tax and include the establishment's name,
address, and taxpayer identification number. This invoice
shall also include identifying information, as defined by the

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Department of Healthcare and Family Services, for the covered
outpatient drug or drugs associated with the first sale, the
date of the sale, the purchaser, the number of units sold, and
any other information required by the Department of Healthcare
and Family Services. A copy of this invoice shall be made
available to any subsequent seller or purchaser of the covered
outpatient drugs detailed on the invoice as evidence that the
subsequent seller or purchaser is not liable for the tax. The
Department of Healthcare and Family Services may adopt rules
concerning the information required and may allow for such
invoices to be transmitted and stored electronically,
including allowing sellers to maintain records of the invoice
on behalf of purchasers.
Section 15. Returns. On or before the twentieth day of each
calendar month, every establishment that makes a first sale of
a covered outpatient drug within the State during the preceding
calendar month shall file a return with the Department of
Revenue, stating:
(1) the name of the establishment;
(2) the address of the establishment's principal place
of business;
(3) the amount of tax due; and
(4) such other information as the Department of Revenue
may require.
If a taxpayer fails to sign a return within 30 days after

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the proper notice and demand for signature by the Department of
Revenue, the return shall be considered valid and any amount
shown to be due on the return shall be deemed assessed.
Section 20. Recordkeeping. Any establishment liable for
any tax under this Act shall maintain auditable records of
sales made and taxes paid for a period of at least 3 years
unless the Department of Revenue establishes a different
retention period by rule. Those records shall be available to
the Department of Revenue for inspection or audit upon request.
Section 25. Retailers' Occupation Tax Act. All of the
provisions of Sections 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i and 5j of
the Retailers' Occupation Tax Act, which are not inconsistent
with this Act, and Section 3-7 of the Uniform Penalty and
Interest Act, shall apply, as far as practicable, to the
subject matter of this Act to the same extent as if such
provisions were included herein.
Section 30. Payment into the Prescription Drug Fairness
Fund. The proceeds collected from the tax imposed under this
Act shall be deposited into the Prescription Drug Fairness
Fund, a special fund created in the State treasury. Moneys in
the Fund shall be used, subject to appropriation, by the
Department of Healthcare and Family Services.

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Section 90. The State Finance Act is amended by adding
Section 5.891 as follows:
(30 ILCS 105/5.891 new)
Sec. 5.891. The Prescription Drug Fairness Fund.