Tenn. Drug Dealers Must Buy Tax Stamps
It's the tax man...coming after Tennessee drug dealers. Beginning January 1, dealers of illegal controlled substances will have to buy tax stamps. Tennessee becomes the 22nd state to enact such a law. The tax isn't cheap to create or enforce:
Drug peddlers will be required to pay state excise taxes on illegal substances — from marijuana to moonshine, from cocaine to the often illegally obtained prescription painkiller OxyContin — under a new law that goes into effect Saturday.
A 10-person tax agency has been created at a one-time cost of $1.2 million to assess the taxes and collect them. The annual cost to enforce the drug tax will be $800,000...
What a stupid idea.
''It's patently ridiculous. Legal nitwittery,'' said Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws, a Washington nonprofit that calls itself the largest, oldest group devoted to legalizing marijuana for responsible adult use. ''On the one hand, it says you can't own a substance. And on the other hand, it creates a taxing scheme … The law on its face makes no sense.''
St. Pierre suggests that marijuana users here challenge the law to either get it wiped off the books or affirm the legal taxation of marijuana, similar to how alcohol and tobacco are taxed.
Can it possibly be worth it? Obviously, no drug dealer with an ounce of brains is going to buy tax stamps because they have to use their name. Then the drug agents will follow them, wiretap them and ultimately bust them. So what's the purpose of the law?
After a drug dealer gets busted, in addition to drug charges, the state will charge failure to buy the tax stamp.
The most probable way the tax will be collected is when police make drug busts. Law enforcement agencies are required to call tax officials within 48 hours detailing the drugs found.
Tax collectors then assess the tax on the drug suspects, as well as additional fines for not paying the tax in the first place. If the suspects cannot make immediate payment, the state seizes and sells any assets, such as cars, homes and personal belongings, to pay off the liability.
Paying the tax does not immunize a drug dealer from criminal prosecution, nor does nonpayment result in harsher jail sentences or fines, other than a tax penalty. Typical tax penalties are 5% of the unpaid tax liability.
In North Carolina, which also has a tax, 79,000 people have been taxed. Only 79 of them voluntarily bought the stamps.
Let the court challenges begin. They have succeeded in some states and not in others. This isn't a tax. It's a penalty.
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