Taking A Stand: Taxing drugs a smart move
Yes, Cheech, there is a tax on your reefer now so you’d better be charging sales tax when you sell your homegrown cigaweed to your Frito-munching customers.
As you may have heard, Tennessee became one of 22 states across the nation to place a tax on illegal drugs, meaning, if the cops catch you with an eight ball of cocaine, there’d better be a sales tax marker on it or you’ll also be hit with tax evasion charges. Hey, go ahead a laugh but it was the tax man who brought down Al Capone when no one else could.
The tax includes all types of substances, including but not limited to, good old white lightning, cocaine, pot and meth. The list of drugs is lengthy and also includes prescription drugs which are sold illegally on the street.
A drug dealer will basically be required to report the drugs and pay taxes on them at one of the state’s tax locations. The reporting will be kept secret by law and cannot be reported to law enforcement. However, in North Carolina, which is the state our law is modeled after, only 79 people of the 72,000 people assessed by the law have voluntarily bought tax stickers. The law has been on the books there for 14 years.
Granted, expecting drug dealers to voluntarily pay taxes on their drugs is ridiculous, but, the law itself, has been proven to make money. It brought in $8.5 million last year in North Carolina while taking $800,000 to administer. Pretty big profit, meaning the program can both pay for itself and add money for fighting drugs to the state’s budget.
The law makes money when drug dealers are busted and it is determined they did not pay taxes on their drugs. At that point, they are assessed fines for tax evasion on top of their regular drug fines, meaning the financial hit is doubled.
Will the law stop folks from doing drugs? No way. Generally, people who do drugs don’t really look at the big picture and if they do, they ignore the potential repercussions for their actions. However, it will accomplish two things.
First, drug traffickers will be helping pay for drug enforcement and treatment programs, sparing regular taxpayers some of the burden.
Second, it will financially cripple folks who have lived high on the hog by dealing drugs. It means the state can basically come take away their toys for failure to pay taxes on their drugs.
The law’s effect will be limited, I believe, in Warren County since the drug of choice is meth and most meth-makers don’t have much anyway. Also, the amount of finished product found at labs is usually limited because you have to be real lucky to catch them right at the end of a cook.
Marijuana growers here are also wise, knowing the sheriff’s drug team will be circling above during growing season. It’s rare when a field is linked with an owner.
However, when you look at this on a statewide level, it should have a financial effect seeing the state has numerous organized drug trafficking cartels, which, when prosecuted, will owe thousands if not millions in delinquent drug taxes.
Sure, folks will make fun of the law given how it looks on its face. However, if you look at the aim of the law, which is actually to collect money as a backdoor tax, and the way it has succeeded elsewhere, you’ll likely be for it, that is, unless you’re a drug trafficker.
Duane Sherrill is a reporter for the Standard. He can be reached at 473-2191 or by e-mail at [email protected].