Tennessee Windfall a Message to Mississippi?
2005-07-11 >> news category >> drug policy news
Source: sunherald.com

In Mississippi, they wanted to call it a levy on unauthorized substances.

In Indiana, it is the controlled substances excise tax.

In Montana, it was called the drug possession tax.

In Oklahoma and North Carolina, it is the illegal drug tax.

In Tennessee, it is simply a windfall.

For states scrounging for ways to put new money into the local budgets, Tennessee's experience is an eye-opener.

Mississippi lawmakers tinkered with the idea this year. The House voted to allow lawmakers to consider a bill to require dealers to buy tax stamps for cocaine or other illegal drugs.

Its purpose? To bring down drug dealers and raise a little cash.

The Senate killed the proposal. Some lawmakers worried that the tax could lead dealers to sue to try to legalize crack, methamphetamine and other drugs.

"You could be promoting corruption with this legislation," said Rep. David Green, D-Gloster.

Rep. Joe Warren, D-Mount Olive, who brought the proposal to the House, said the tax would financially benefit local law enforcement agencies and the state when drug sellers or carriers pay taxes after being caught.

"I don't think we would have to worry about people rushing in and buying a stamp," Warren said.

Such black market taxes are not new to Mississippi. Before liquor was legalized in 1966, Mississippi charged a black market tax on alcoholic beverages.

Now comes the Volunteer State.

This past week, Tennessee officials said the unauthorized substances tax had generated more than $600,000 in collections and $15 million in assessments since it took effect Jan. 1.

Under the law - which some Mississippi lawmakers had hoped to copy - people in possession of illegal drugs in Tennessee must purchase stamps marked with a number to be affixed to packages containing the drugs.

When drugs without the stamp are found, the Tennessee Department of Revenue taxes the alleged drug possessor and gives them an opportunity to pay the tax. If it is not paid, agents may seize and auction off anything of value the person owns.

Tennessee officials said only 184 stamps have been purchased voluntarily so far.

The illegal drug tax is levied per gram - $3.50 for marijuana, $50 for cocaine and $200 for meth and crack cocaine. Three-fourths of the tax revenue is given to the law enforcement agency that investigates the drug offense and the rest goes into Tennessee's general fund.

Such laws have been enacted amid questions of constitutionality. Legal experts have argued such tax laws are criminal penalty lacking in necessary due-process safeguards. Other questions involve forcing drug offenders to pay a tax in addition to their criminal fines - that is, double punishment for the same crime.

Federal and state law enforcement agencies have called Mississippi the "Crossroads of the South" in terms of movement of illegal drugs.

With interstate highways, deepwater and river ports and air and rail systems, lawmen say drugs move from Texas, Mexico and the Gulf of Mexico ports into Mississippi and on the Midwest and the eastern seaboard.

According to federal agencies, cocaine and crack cocaine seizures in Mississippi in 2002 were estimated at 7,169 kilograms. A kilogram is 1,000 grams. Methamphetamine seizures were 4.4 kilograms, and marijuana seizures were 294 kilograms.

Applying the Tennessee illegal drug tax levies, Mississippi's take could have been more than $37 million.

With the growth of methamphetamine over the past three years, the figures could be higher.


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Ugghhh. What kind of drug dealers will go get the stamps in the first place? Then when they get caught this seems like double punishment. Part of me seems to not want to care (except if you're selling pot ) but the other part of me doesn't sit well with this.

This has probably already been discussed here anyway.

Thanks, because I really couldn't figure that out myself.

Brought to you by the people who brought you the solar-powered flashlight!

Why don't we tell the drug dealers that they've won a boat, and they just have to come to the police department to pick it up.

Okay, is this another fake story, or is this yet another bizarre way the US sanctions illegal behavior e.g. giving illegal immigrants driver's licences?

If it is real, then WHAT THE FUCK? Who would buy such a stamp, and why wouldn't that person automatically start getting watched as a result of buying said stamp?

If the gov't wants taxes from the sale of these substances, then (DUH!) they should make those drugs legal first.

anyone else see that cocaine is only $50 while crack and meth are $200 a gram? What a joke. It's not like people selling/buying crack have a ton of money. The guy doing coke on the other hand, he's got some dough.

This is a true story and I work for the department who is going to be handling the appeals of the convictions. I bet they will be an interesting read!

Thw war on drugs targets poor people specifically. I thought this was common knowledge.

As you may know, many police departments do things similar to this. Of course I doubt they have the criminal go pick up the reward at the police department.

I hope you share some non-ID info!

Just read through a couple of the cases that have been filed. It seems that the law enacted by the state not only gives them the right to tax the people caught with drugs, but it also gives the state the right to seize any property that the person has in lieu of this tax payment. So in one case the person was taxed for over 100 grand. He obviously didn't pay this off. The state then cleared out his bank accounts, and seized 9,000 dollars. He is appealing to get his money back. From what another person in this office told me most of the people suing were cleared of the drug charges but were still taxed? GO figure

I could see a good constitutional challenge to this as a due process violation.

maybe I am a dumbass, but how is that the gov't can tax something that is illegal?

why not just attach a larger fine to the possession of these drugs and cut out all this tax crap?

why not just make it legal and THEN tax the hell out of it?

Those all make to much sense!

I don't think that is a major issue. It seems silly, and few people will pay the tax BEFORE they get busted, but I don't think there's any rules that say a substance must be legal to be taxed.


Well, see that's the unconstitutional part. If they just made a larger fine, then the person would actually have to be CONVICTED to pay the fine. With this scheme, they can tax you without a criminal conviction. The constitutional issue is whether this is being used as an illegal taking of property without due process by calling a criminal penalty a "tax".


Because then what we do with all the money we're currently spending on drug enforcement? How would drug kingpins make a living if they can't charge black market prices? Who would fill up all of our jails?

You really ask some silly questions.

another article - http://tennessean.com/apps/pbcs.dll/art ... 1/ARCHIVES



Taxes on illegal drugs pay off for state

Money being taken from some innocent people, defense attorneys say

By AMBER NORTH
Staff Writer


Tennessee modeled its program to collect taxes on illegal drugs after North Carolina's, but early returns indicate that the Volunteer State's 6-month-old effort has been more successful.

A report released yesterday showed that Tennessee had collected about six times more taxes on controlled substances as did its neighbor to the east in its first six months. Substances taxed include cocaine, crack, methamphetamine and marijuana.




The 10-person unit of the Tennessee Department of Revenue reported that it had collected $606,687 and assessed more than $15 million. The department has spent $376,400 since the program began in January.

North Carolina's Department of Revenue collected $107,000 in the six months after its program began in January 1990.

"I will say we've exceeded our expectations, based on what North Carolina did in their first six months," said Emily Richard, Tennessee Department of Revenue's spokeswoman. "I feel like it was a success."

Ron Starling, director of North Carolina Department of Revenue's unauthorized substance tax division, said the year ended June 30 was its most successful; $9,349,533.55 was collected, nearly a million more than last year, bringing its 15-year total to almost $90 million.

The tax also applies to illicit alcoholic beverages, such as untaxed liquors and spirits. It applies to dealers who possess illegal substances, and the tax is payable within 48 hours of the dealer acquiring the substance.

Despite Tennessee's success with the new tax, some defense attorneys think that some people being taxed are not guilty of drug possession.

"I don't have a problem with money being taken from people who are proven to be involved in some sort of illegal conduct," said Erik Herbert, a Nashville defense attorney. "The issue that I have are these liens and monies being taken before it's proven people have done anything wrong."

Herbert represented Michael Garcia, who was ordered to pay $17,592 in taxes in April after being stopped as he followed a vehicle going through Springfield. Authorities said the other vehicle was carrying 10 pounds of marijuana, and police said they suspected that Garcia was running interference for a drug dealer.

Garcia was never arrested or charged.

Last week a state revenue department lawyer waived the assessment, saying there wasn't enough evidence to prove Garcia possessed the drugs.

Herbert said Garcia probably isn't the only innocent person who was assessed the tax.

"If you've got financial resources, you can go out and hire an attorney to represent you and potentially convince the Department of Revenue" to waive the tax, he said. "But there are thousands of people out there that don't have resources to test this and will have property taken from them or liens. There's no judicial oversight to make sure this is done properly."

Richard, the Revenue Department spokeswoman, said officials expected such criticisms.

"There are some of these challenges that have been filed, and we expected them," she said. "We're implementing and executing a law that was enacted by the General Assembly."

how completely convoluted and bizarre.

Now for another question, sort of related (i.e.the gov't sanctioning illegal things) but sort of off topic at the same time (i.e. has nothing to do with drugs):

there is a push to be able to give illegal immigrants (if there is a more "pc" term, I don't know it, sorry) driver's licences.

How is that possible? Shouldn't that illegal immigrant be deported as soon as he/she shows up to get a licence?

I have a solution, don't sell or use drugs and you wont have to worry about some stupid tax or a fine. If you get caught you deserve what you get.

It's actually the other way around. The push is to DENY illegal immigrants drivers licenses which they have largely been able to obtain in the past. You really overestimate the ability of INS to keep track of illegals if you think they'll pick someone up at the DMV. The question of whether they should be allowed to get licenses is another issue entirely, and one I think we've had a thread on in the past.

gosh you're smart, please continue to enlighten