cannabisnews.com: Illegal Drugs Aren't Exempt From Taxation 





Illegal Drugs Aren't Exempt From Taxation 
Posted by CN Staff on April 18, 2004 at 23:03:42 PT
By Joe Noga, Morning Sun Staff Writer 
Source: Morning Sun 
The fact that dealing marijuana and controlled substances is illegal does not exempt it from taxation. Drug dealers are required by law to purchase drug tax stamps and place them on the drug containers just like manufacturers must place state tax stamps on alcohol or cigarettes.According to Senior Special Agent David Hutchings, Kansas Bureau of Investigation, the drug tax stamp is a statutory requirement that states when a person has possession of an illegal drug, a drug tax stamp must be affixed to it.
Hutchings said that the law states that no dealer may possess marijuana... or controlled substance... without a drug tax stamp."A dealer is defined as any person who in violation of Kansas law manufactures, produces, ships, transports or imports into Kansas or in any manner acquires or possesses more than 28 grams of marijuana or more than one gram of any other controlled substance, or any 10 dosage units of any controlled substance, which isn't sold by weight," Hutchings said. "We tax a lot of things, like alcohol and gasoline. It just makes sense that we would tax something that costs the government money, and possession of illegal drugs costs the government money."The purchase of a drug tax stamp does not make the illegal drugs legal to possess, it is simply a way for the government to collect taxes on what is bought and sold, just like with any legal merchandise.Hutchings and Kyle Smith, a spokesman for the KBI, both said drugs cost the state an enormous amount of money and that is, in part, the reason for the drug tax stamp."We're talking about substances that cost the state a lot of money," Smith said. "They possess these drugs with the intent to sell them and they sell them illegally without any (state) revenue coming from it. So the idea of the drug tax stamp is to try and make up for that lost tax that isn't generated because they are illegally selling substances."Smith said that resources and assets of criminals shouldn't be left to the criminals to further their illegal trade. Instead, he said those assets and resources should be used to fight drugs."They thought they would bring the power of the tax code into the drug war and say you have to have these drug tax stamps and if you don't have them you owe taxes," Smith said. "To pay off taxes they can go after property that would be exempt during forfeiture. Forfeiture deals with property that is proceeds of drug or other criminal activity or is used to facilitate that activity, like the car used to deliver the dope. Taxes aren't bound by that. If you owe taxes, they don't care whether that car had anything to do with the activity that created the tax lien. They can go after that car."The actual sale of drug tax stamps brings in little revenue, but the state has ordered convicted drug dealers to pay millions of dollars in taxes on possession of illegal drugs.Drug tax stamps, which need to be renewed every three months, can be purchased in denominations and multiples of $10, $50, $100, $500, and $1,000; not having one could be extremely expensive.Hutchings said Stamps can be purchased from the Department of Revenue and can be done completely anonymously."They don't ask any questions, you don't have to write your names down or anything like that," he said.Illegal drugs have their own tax table. For example, there are three different rates for marijuana: "wet plant," "dry plant" and "processed.""Since drug dealers are in fact businessmen, it is hard to comply and be charging twice what your competitors are charging," Smith said. "Nobody's honestly expecting this to be complied with for the most part."For example, a drug tax stamp for 10 grams of cocaine would cost about $2,000.But the penalty for not having the drug tax stamp is the original $2,000 doubled, or $4,000. Three-quarters of the money goes to the local law enforcement agency while 25 percent goes to the state general fund.Hutchings said the money goes to pay for extra things that the agency couldn't normally afford."It's not supposed to go for things the agency is supposed to have anyway," he said. "They can't pay for their regular personnel with it. It has to go for something to fight crime in general or drug crimes. In the past it has been a really good tool in terms of providing additional assets for agencies to fight drug crimes with."Personal information is not required to obtain a drug tax stamps.Drug tax stamps can be purchased at the Topeka Assistance Center Docking State Office Building, 915 Harrison, Topeka, or by calling toll-free 1-788-526-7738. Stamps can also be purchased by mail.Note: State statute requires dealers to have stamps affixed to drug packages.The Marijuana Tax Act of 1937: http://www.druglibrary.org/schaffer/hemp/taxact/mjtaxact.htmSource: The Morning Sun (KS)Author: Joe Noga, Morning Sun Staff Writer Published: Monday, April 19, 2004 Copyright: 2004 The Morning Sun of Pittsburg, KansasContact: tkadau morningsun.netWebsite: http://www.morningsun.net/Related Articles:Iowa Touts Illegal Drug Stamp Taxhttp://cannabisnews.com/news/thread16503.shtmlIllegal-Drug Tax Buds Into Profithttp://cannabisnews.com/news/thread15288.shtml
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Comment #12 posted by Virgil on April 24, 2004 at 22:35:36 PT
A lot of people say that
Still there has been a wrong and people injured by a federal government gone mad. Kucinich says we had an illegal war in Iraq and we owe reparations. He is right. It doesn't mean Iraq will get squat but some US military bases.
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Comment #11 posted by jose melendez on April 24, 2004 at 15:30:59 PT
reparations stalled Alaska mj reform
I think Gary Johnson said reparations were what killed the previous Alaska decrim initiative.
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Comment #10 posted by Virgil on April 24, 2004 at 14:23:59 PT
Talked me into it
Reparations it is. Something else to consider is the Canadian situation where there were no laws against possession from August 1, 2001 until like October 6, 2003, but there were plenty of convictions.
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Comment #9 posted by afterburner on April 24, 2004 at 13:22:08 PT
Virgil -- What about Reparations? 
Since The US Supreme Court ruled the Marihuana Tax Act unconstitutional in 1969 in Leary v. United States and since the Comprehensive Drug Abuse Prevention and Control Act of 1970 was not passed until 1970, the USA had its own "summer of legalization," but like Canada no one in US government informed the people. The use of the Interstate Commerce Clause has been illegally used by the federal government to misappropriate power over medicine (the Comprehensive Drug Abuse Prevention and Control Act of 1970) in direct opposition to the states' rights to regulate medicine as guaranteed by the Ninth and Tenth Amendments. As this has been successfully challenged in the Ninth Circuit Court in Raich v. Ashcroft with regard to medical "marijuana", the US federal government's authority is unravelling. Now, what about reparations: first, for all the people illegally convicted under the Marihuana Tax Act, and second, for all people convicted between laws, and third, for all the medical users in the Ninth Circuit illegally convicted of cultivation, trafficking or possessing medical "marijuana"?Medical Freedom Amendment for 2004, may the federal government never again overreach its authority and never again regulate medical freedom.
U.S. Constitution - Bill of Rights
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Comment #8 posted by bongathon on April 19, 2004 at 13:54:26 PT
weird
i grew up with david hutchings, this david hutchings. oddly, he was the first person to ever really get me stoned. i had puffed a few times before that and always upheld that it didn't do anything to me. we were juniors in high school and we went over to a girl's house. she had a power hitter, dave put the joint in one end and squeeze the rubber ball. i was first to take a hit, he was quite experienced at it and took the second hit, his brother gave him the weed and this "older" girl, a senior toked it up too. oh man, i was so wasted.
i saw him breifly at our high school reunion and heard he was in the KBI. i was carrying and avoided him completely. i remember a lot of times cruising drunk off our asses with him at the wheel of his impala. he always drove and we were AWAYS drinking!
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Comment #7 posted by Virgil on April 19, 2004 at 09:14:59 PT
OverwhelmSam
Timothy Leary had the Marijuana Tax Act declared unconstitutional by the Supreme Court in 1969 because purchasing the stamps was self-incrimination in violation of the 5th amendment. It is important to discern that if the Marijuana Tax Act was unconstitutional in 1969, it was unconstitutional from its inception of October 1, 1937.The tax aspects are just as much for collecting money with severe monetary penalties when stashes are taken. They want money alright and know people will not buy the stamps even if they think it Constitutional. They want their money on the back end with some heavy penalties. America is so conditioned to hate people that use the government's taboo substances, that they do not care about the penalties and the breach of all that is right. That is until the law bites them or someone of concern to them. 
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Comment #6 posted by OverwhelmSam on April 19, 2004 at 07:43:34 PT
How Can They Make A Law...
...to tax something that you should not legally possess? This is childishness.
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Comment #5 posted by cannabis jarhead on April 19, 2004 at 07:13:01 PT
they making 
A list and they think the people are so stoned that they will put there name on a HIT list
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Comment #4 posted by mamawillie on April 19, 2004 at 06:15:11 PT
Found it
Found an example of this in the Federal penalities:Miscellaneous (paraphernalia, license suspensions, drug tax stamps, etc...) 
Paraphernalia sale felony 3 years
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Comment #3 posted by mamawillie on April 19, 2004 at 06:09:23 PT
tax stamp as bad as paraphanalia
I forgot to say... I believe I read over at Norml (while looking at state laws) that if you are busted, the possession of a tax stamp is a misdemeanor...So we're back to the idea that you need a tax stamp according to the state, but if you are found in possession of a tax stamp, well that is against the law.
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Comment #2 posted by mamawillie on April 19, 2004 at 06:07:05 PT
Let me get this straight
*****"We're talking about substances that cost the state a lot of money," Smith said. "They possess these drugs with the intent to sell them and they sell them illegally without any (state) revenue coming from it. So the idea of the drug tax stamp is to try and make up for that lost tax that isn't generated because they are illegally selling substances."********So YOU impose prohibition, which in turn creates a black market of drugs and money, a known undercurrent of American economics and its own culture to itself... and THEN you decide the black market is a BAD thing because the state misses out on the taxes such a drug could bring in to the state.O.K. So this is MY problem?Good point to bring up though since #1) it is so crazy and 2) proves to the public that if the WOD was ended, not only would there be a surplus of money that the state isn't using to fight nonviolent offenders, but also it illustrates that to the state, that tax money would be an important revenue.
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Comment #1 posted by FoM on April 18, 2004 at 23:05:10 PT
Picture of The Drug Tax Stamp
http://morningsun.net/images/041904/drugstampLR.jpg
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