Pubdate: Wed, 05 Jan 2005
Source: Crossville Chronicle, The (TN)
Copyright: 2005 The Crossville Chronicle
Contact:  http://www.crossville-chronicle.com/
Details: http://www.mapinc.org/media/1972
Author: W. Alan Beckelheimer

NEW STATE EXCISE TAX WILL DEFER TAXPAYERS' COST OF LAW ENFORCEMENT

The Tennessee Department of Revenue is preparing for the
implementation of a new tax on unauthorized substances. While many of
us rang in the New Year with friends and family, Tennessee's state
excise tax on controlled substances went into effect with the coming
of the first day of 2005.

This excise tax was created by Public Order 803 and was signed into
law on June 3, 2004. The tax applies to controlled substances and
certain illicit alcoholic beverages, including cocaine, crack,
methamphetamine, untaxed liquors and spirits, and marijuana.

Tennessee's Revenue Commissioner, Loren L. Chumley said, "The
department is equipped to administer this tax that assists in
controlling crime," she said, "The purpose of the tax on unauthorized
substances is to channel funds collected into local law enforcement
agencies."

This tax applies to substances in the hands of a dealer. The tax is
payable within 48 hours of the dealer acquiring the substance. Dealers
in illicit and controlled substances must travel to Nashville to
purchase their tax stamps directly from the Department of Revenue. The
commissioner will issue the stamps to be affixed to the substances to
indicate payment of the tax. Any information obtained in accordance
with this act cannot be used in criminal prosecutions, and nothing in
the act provides immunity from criminal prosecution. If caught with
unauthorized substances that do not have stamps, the Department of
Revenue will collect all taxes due on those substances.

I believe this tax will have a profound effect on the state of
Tennessee. The tax is designed to further defray the costs of law
enforcement in the area of controlled substances by making those that
deal in drugs pay taxes on their trade just like any other red blooded
American. If dealers don't buy the stamps and continue to pursue their
illegal trade and are caught, the department of Revenue still gets its
tax money.

The statute also provides additional funding for local law enforcement
agencies because any time they make an arrest involving drugs that do
not have the tax stamp, they turn this information into the department
of Revenue. Once the department of Revenue collects the appropriate
taxes that were levied against the drug offender, a percentage of the
tax dividend is given to the local law enforcement agencythat
generated the funds.

This means that drug offenders and those that deal in drugs will
finally be required to pay their share of the tremendous expense that
government in our state pays out every year for law enforcement. This
tax will free up tax payer dollars from being devoted to drug
enforcement to being used for things such as schools and road
improvements.

North Carolina instituted a similar tax on Jan. 1, 1990. During the
time that North Carolina has had this law on the books they've only
sold 79 of the tax stamps to drug dealers. This means that the
majority of their tax collection has come from those unscrupulous
enough to not purchase their tax stamps.

Total revenue raised by the state of North Carolina from their tax on
unauthorized substances so far totals over $89 million dollars. This
amounts to drug dealers in North Carolina contributing around $7
million dollars a year to the law enforcement agencies that busted
them.

Although when I first read this law I was a bit confused by its
language, the more I delve into it the more I am proud of its passage
by the General Assembly.

This is a law that features responsibility as one of its basic tenets.
Law abiding citizens shouldn't be required to bear so much of the
burden of the costs of enforcing drug statutes because the average
person doesn't transgress against them.

Many drug dealers don't work regular jobs so the only way they
contribute to the tax base is through their sales tax transactions.
This new law will end that practice and hopefully put a real hurting
on those folks that make their living dealing drugs and living off of
society without contributing their fair share.

Another key part of this legislation is that it in no way changes the
criminality of having, possessing or using illegal drugs. This law
merely raises revenue from the black market of drugs, which was
previously an undertapped source of revenue for the state of
Tennessee. So if you are an average citizen reading this, take pride
in the law because it will do much to benefit our great state.

If you are a drug dealer you had better call the Department of Revenue
at 615-741-7071 and inquire as to how you can purchase a stamp showing
that you have paid the tax on your illegal drugs. If you don't you are
taking a big chance because I am sure the state will frown on those
dealers that don't have their stamps and are appearing in court for
drug charges.

W. Alan Beckelheimer is a Crossville Chronicle staffwriter. His
column appears Wednesdays in the Chronicle.
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