PolySciFi Blog

Tennessee has passed a tax on crack. NO. REALLY.

Here's the state web page for the "Unauthorizzed Substances Tax". From the state's "frequently asked questions:

What is the unauthorized substances tax?

The unauthorized substances tax is a state excise tax levied on controlled substances (marijuana, cocaine, crack, methamphetamine, etc.) and certain illicit alcoholic beverages (untaxed liquors and spirits).

Who is required to pay the tax?

The tax is due by any dealer who possesses an unauthorized substance upon which the tax has not been paid as evidenced by a stamp available from the Tennessee Department of Revenue. A "dealer" is any person who possesses more than 42.5 grams of marijuana, seven or more grams of any other unauthorized substance that is sold by weight, or 10 or more dosage units of any other unauthorized substance that is not sold by weight.

When is the tax due?

The tax is payable within 48 hours after the dealer acquires actual or constructive possession of a non-tax-paid unauthorized substance, exclusive of Saturdays, Sundays, and legal holidays of this state, in which case the tax is payable on the next working day. If a dealer is found in possession of a taxable substance, it will be presumed he/she had possession of the substance for more than 48 hours. Penalty and interest will be assessed pursuant to the provisions of Tennessee Code Annotated, Title 67, Chapter 1, Part 8.

What should I do with the stamps that I receive after I pay the tax? The stamps must be permanently affixed to the unauthorized substance. Once the tax due has been paid and the stamps affixed, no additional tax is due even though the unauthorized substance may be handled or possessed by other individuals in the future.

Will the Department of Revenue notify law enforcement if I purchase stamps? No. Information obtained pursuant to the unauthorized substances tax law is strictly confidential and may not be disclosed or used in a criminal prosecution other than a prosecution for a violation of the unauthorized substances tax law.

Who can I call to get an application for stamps or more information on the unauthorized substances tax?

The Tennessee Department of Revenue using one of the following numbers:
Statewide toll-free: (800) 342-1003
Nashville-area and out-of-state: (615) 253-0600

However, they only implicitly answer my question: Are they f'n serious? I guess so - they brought in $2 million dollars last year. One more question, which I figure is rather frequently asked is: what drug dealer is going to actually call the Department of Revenue to pay the tax?

On the flip side, Tennessee is prosecuting the government officials responsible for running an illegal driver's license ring.

Update
I guess I should note that I believe I understand what TN is really doing.

Specifically, they've come up with a fine that they can levy without the need to go to court, but that strikes me as unconstitutional (due process violation). I imagine there's been court challenges that I'm unaware of.

For added fun, the TN revenue office might be breaking federal law and looking at a minimum two years jail time. Last June we noted that the US House of Representatives had introduced a bill (HR1528) with the following legal effects:

‘FAILURE TO PROTECT CHILDREN FROM DRUG TRAFFICKING ACTIVITIES
SEC.425.

(a) It shall be unlawful for any person who witnesses or learns of a violation of sections 416(b)(2),417,418,419,420,424,or 426 to fail to report the offense to law enforcement officials within 24 hours of witnessing or learning of the violation and thereafter provide full assistance in the investigation, apprehension,and prosecution of the person violating paragraph (a).

Any person who violates subsection (a) of this section shall be sentenced to not less than two years or more than 10 years.If the person who witnesses or learns of the violation is the parent or guardian,or otherwise responsible for the care or supervision of the person under the age of 18 or the incompetent person,such person shall be sentenced to not less than three years or more than 20 years.’’

If that bill ever gets out of committee, I expect this program to end quickly, publicly, and messily. (That's not to say that I don't also doubt the Constitutionality of HR 1528, but if you're unConstitutionally imprisoned, you're still in prison)
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