Tennessee "Crack Tax" brings in nearly $2 million in first year

Tennessee "Crack Tax" brings in nearly $2 million in first year

During its first year, Tennessee's "Crack Tax" has brought in nearly $2 million dollars in state revenue.

The illegal substances tax went into effect last January.

Basically, drug dealers are supposed to pay taxes on illegal drugs and alcohol.

They pay confidentially, and when they do, they get a stamp.

If they're caught without the stamp, they'll be prosecuted for not only selling drugs, but for not paying their taxes too.

All money made from the stamps goes to fighting drugs.

Amanda Dill , Producer
Last updated: 1/24/2006 4:55:27 PM

http://www.wbir.com/news/news.aspx?storyid=31556

Wednesday, 04/07/04
'Crack tax' targets illegal drugs, booze

By BONNA de la CRUZ
Staff Writer

Sponsor: Making dealers pay could net state millions

Moonshiners and illegal drug dealers in Tennessee should have to pay a state tax on their unlawful goods if caught by police, according to an East Tennessee lawmaker.

The state could generate $3.6 million in tax revenue and penalties in one year's time, said Sen. Randy McNally, R-Oak Ridge, a pharmacist who has dubbed the levy the ''crack tax.''

He said the estimate is based on 10% of the illicit drugs confiscated in the state. A note accompanying the legislation said the estimate is based on the number of drug arrests and the value of drugs seized by the Tennessee Bureau of Investigation and local law enforcement agencies in a fiscal year.

Tax rates would vary according to how the drugs are sold: a $200 tax for 10 doses of a controlled substance, such as the much-abused prescription painkiller OxyContin; $50 per gram of cocaine; $3.50 per gram of marijuana, excluding stems and stalks; and from $12.80 to $31.70 per gallon for illegal alcohol, depending on whether the alcohol is sold by the drink.

McNally said the legislation is modeled after a 1999 North Carolina law that has netted that state $6 million so far.

''It would be hard-pressed for an individual to argue we shouldn't tax drug dealers, given the tremendous cost they have to society and the state,'' McNally said.

The tax would be assessed when police or the TBI nab dealers red-handed, McNally said. Paying the tax would not provide immunity from criminal prosecution.

McNally pushed a similar bill without success several years ago and revived it this year as a way to make money to help combat the rise of methamphetamine use.

Sen. John Ford, D-Memphis, called the proposed tax ''asinine'' yesterday during a meeting of the Senate Finance Committee.

''I don't know anyone who'll have an illegal drug and tell law enforcement I want to pay my taxes,'' said Ford, adding that drug dealers will be penalized with jail time anyway.

McNally said he wants to try to get at their profits.

''We're taxing illegal drugs because North Carolina does it — they're not the smartest people in the world,'' Ford told McNally.

McNally responded that ''$6 million is a lot to leave on the table.''

The committee put off a vote for two weeks because Sen. Jim Kyle, D-Memphis, did not like McNally's idea of earmarking who gets the tax money.

As in the North Carolina law, McNally proposes that 75% of the tax money go to the law enforcement agency that makes the bust and 25% to the state general fund.

SB 2419 can be tracked at www.legislature.state.tn.us.

Reach Bonna de la Cruz at 726-4892 or e-mail [email protected].

http://www.tennessean.com/government/archives/04/04/49498192.shtml?Element_ID=49498192

how much worse can the penalty be for not paying taxes?

Hahahaha is all I gotta say. I agree frizz. Im sure they'll lock you up anyways, so why sacrifice the dough in payin the tax? $50 tax for a gram of coke? They're out of thier mind. " $3.50 per gram of marijuana, excluding stems and stalks" Geez, talk about greedy.

yeh you know who the real crooks are lol. You get fuked over in america for drugs already anyway, so why pay money that is going to help lock you up?

the stupid thing is... if they legalized drugs, they could tax them and be assured that people would actually pay the tax, assuming it wasn't completely unreasonable. The sales tax alone would net way more than 2 million.. plus you wouldn't have to waste money on policing and jailing nonviolent drug offenders. Additionally, you'd take away a huge source of income from organized crime (ie the ones who ARE violent criminals).

but of course.. drugs are bad mmkay.. and it's the gov't job to make sure you to don't anything that might be bad for you -- that is, besides drink alcohol, smoke cigarettes and eat macdonalds till you explode 8(

I'm sure it's actually completely anonymous too! When joe drugdealer goes in and wants to pay his tax on the 15lbs of crack he sold this week, I'm sure they would never investigate this further and figure out who it is. State and City government is always so honest and would never do anything that underhanded. Maybe the feds should ask all drug dealers to file "anonymous" W2 forms listing drugdealer as an occupation.

Not to mention I can see getting busted selling a friend of a friend a couple of grams of weed(happens all of the time). Although not a drug dealer, one arrested under these circumstances would be treated as a drug dealer, and would incur additional penalties for not having the drugdealer stamp, even though they arent a drug dealer.

This is one of the stupidest laws I havew ever heard of.

Is this some kind of joke ? I mean, do they really expect people to pay taxes on ILLEGAL DRUGS ?

frizzantik said:

Additionally, you'd take away a huge source of income from organized crime (ie the ones who ARE violent criminals)

Click to expand...

So suddenly being involved in a criminal syndicate instantly makes you a violent criminal??

You sound no different than the DEA.

Sphinx (Afterlife) said:

So suddenly being involved in a criminal syndicate instantly makes you a violent criminal??

You sound no different than the DEA.

Click to expand...

You've never been a witness to organized crime. Shit gets violent.

Sphinx (Afterlife) said:

So suddenly being involved in a criminal syndicate instantly makes you a violent criminal??

You sound no different than the DEA.

Click to expand...

yes, i sound no different than the dea because i say that gangs, mafias, and drug cartels are more violent than your average drug user 8(

Drug taxe 2 million dollars in one year Holy fuck. I didn't know about this shit.

lol so they have this guy come over and steal your furniture when you forget to pay the crack tax or something , good example there from a government , maybe it's just for protection

and an added charge of tax evasion

you can make friends with gov't officials when you're in the higher tax brackets like yours truly. My IRA is making bank cuz of this

This Is Retarded. Who Buys Those Stamps

Dude, they're going to be worth as much as the marijauna tax stamps in a few decades.. BUY UP!!!

^
yes but they are still property of the state right

so when some one's needs a warrant they will remember about those stamps maybe

it just seems wrong

Seems like a step in the direction of legalization of substances, it's clearly ineffective, and who wouldn't pursue someone who buys millions of dollars of tax stamps for their cocaine?

EDIT:
here's the important line we all missed:

Moonshiners and illegal drug dealers in Tennessee should have to pay a state tax on their unlawful goods if caught by police, according to an East Tennessee lawmaker.


Seems that they would only pay if caught.