Drug Tax Stamps

January 15, 2007 8:55 AM

Many people want to legalize, regulate, and tax marijuana and other drugs, however, few know that many U.S. states are content simply to tax. In fact, even the federal government wants a share (middle of p. 89 of the PDF), and used tax stamps in early prohibition, but only the states have recently issued issued cool stamps (be sure to click "exhibit"). The point, of course, is not to actually tax the drugs, but to penalize the drug dealers for tax evasion as well as drug sales. They have brought in some money, though. A few interesting state government pages: Conecticut, Nebraska, North Carolina and their tax return form, and Kansas.
posted by TheOnlyCoolTim (30 comments total)

Some of those sites are selling the stamps. I have no connection.

On a tangent to this post, it's interesting to read the surrounding section of the IRS document, including "Bribes" "Kickbacks" and "Stolen Property."
posted by TheOnlyCoolTim at 8:56 AM on January 15, 2007

Yes, it gets around that pesky requirement to prove guilt beyond a reasonable doubt.
posted by caddis at 8:59 AM on January 15, 2007 [1 favorite]

Hilarous. In some ways, it also feels like a Catch-22 type law designed to ensure longer sentences for anyone people caught with marijuana.
posted by bhouston at 9:04 AM on January 15, 2007

That's genius. I've never heard of this before. Thanks for all the info. Good post.
posted by dios at 9:11 AM on January 15, 2007

According to the "brought in some money" article, "The [Tennessee] law says information collected when a drug dealer pays the tax up front can't be used as part of a criminal prosecution. But paying the tax doesn't make the drugs legal, either."

Which seems to imply that prosecutors can't just take the "drug tax payers" list and round 'em up. I'm sure there's some way around this, but at least there's some attempt at a firewall between the tax collectors and the legal system.
posted by dw at 9:17 AM on January 15, 2007

at 3.50 a gram, that works out to about 99 bucks an ounce ... back in the day when they first had these that would have been more than the pot was worth on the market ... now, it's just a stiff tax
posted by pyramid termite at 9:20 AM on January 15, 2007

Just to clarify... As it was explained to me, the federal government didn't set this up to add extra punishment to drug dealing, but rather to make it a federal matter. During the prohibition of alcohol, the feds were busting boozehounds but got sued in a case that made it all the way to the Supreme Court where they said that the feds didn't have the authority to enforce the law and that it was up to the states to enforce it. That said, the feds got the states to setup taxes on the drugs so that it would be a federal issues once again freeing the states from having to deal with an issue that they didn't have the manpower or interest in fighting themselves.
posted by pwb503 at 9:45 AM on January 15, 2007

The states should ensure that these taxes are collected by legalizing the damn things already.
posted by graymouser at 9:55 AM on January 15, 2007

99 BUCKS AN OUNCE IN TAX? Someone is so freakin' high.
posted by loquacious at 10:00 AM on January 15, 2007

I like how this stamps have "Issued by: 5S / Approved by: 6H" ... what's the matter, nobody in government wants to be personally identified? Hmm?
posted by anthill at 10:04 AM on January 15, 2007

Which seems to imply that prosecutors can't just take the "drug tax payers" list and round 'em up. I'm sure there's some way around this, but at least there's some attempt at a firewall between the tax collectors and the legal system.

Also probably protects the law enforcement guys from drug-free troublemakers like me who would pay the tax then sue for false arrest.
posted by ZenMasterThis at 10:05 AM on January 15, 2007

Just bought a book of stamps, realized what I had done was stupid.

Destroyed all evidence by fire. Multiple, small fires. Over the course of an evening.
posted by StrasbourgSecaucus at 10:12 AM on January 15, 2007 [2 favorites]

You are also taxed stolen property you, uh, appropriated (page 90, heading "other income").
posted by phrontist at 10:17 AM on January 15, 2007

I bet taxmen dream about marijuana thieves.
posted by phrontist at 10:17 AM on January 15, 2007

The fifth link leads to the Arizona Department of Revenue order form for tax stamps:

http://www.flyingbuffalo.com/gifs/mjorder.jpg

Interesting - "Quantity, Denmination (sic) and Amount"

One trusts that they paid the tax on whatever they were smoking...
posted by speug at 10:18 AM on January 15, 2007

Famously, Al Capone was only ever convicted of tax evasion.
posted by jacalata at 10:26 AM on January 15, 2007

And on second thought, I bet he's mentioned on one of the pages that were "Forbidden by category "drugs". " for me.
posted by jacalata at 10:28 AM on January 15, 2007

Why is the tax in most states $3.50 per gram? Was there some Bush I era federal initiative to get states to tax The Weed With Roots In Hell ? Were states offered a specimen bill calling for the $3.50/gm amount?
posted by rdone at 10:52 AM on January 15, 2007

Great post. I enjoy learning about obscure things. Yes, I'm a dork like that.
posted by jeversol at 11:20 AM on January 15, 2007

They should consider doing something similar in UK. :(
posted by mightyb at 11:43 AM on January 15, 2007

These state laws are the copy-cat, demon spawn of a federal law that was struck down by the Supreme Court in a 1969 case involving Timothy Leary. (Scroll down to “Trouble with the law” for a nice chuckle.)

Marijuana tax stamp laws aren’t worth the paper they’re printed on, and the states know it. About five years ago a friend of mine was busted, along with another guy, for growing pot in the woods. As first offenders, they got off with probation, but the state still wanted its tax money. My friend got his lawyer to raise a stink about that and, at the first hint of resistance, the state quietly dropped the whole thing. Meanwhile, the other guy was so happy to be set free that he just slunk off whimpering. He still owes marijuana taxes to the tune of some 40K, if my memory serves me well.
posted by Huplescat at 12:00 PM on January 15, 2007

But-but-but if we legalize drugs then everyone will use drugs all the time!!! (so say my red state parents).
posted by CameraObscura at 2:13 PM on January 15, 2007

He still owes marijuana taxes to the tune of some 40K, if my memory serves me well.

Isn't the purpose of tax to gain revenue for the state on something that was sold? If the state took all the guy's weed, then he never sold it, so why should he have to pay tax on it? In fact, if we're going to play this "marijuana is something you can tax like any other crop" game, it seems to me that the state owes him for lost profits!

mmm, nothing says "America" like our uniquely blatant combination of forfeiture and double jeopardy... unless, of course, it's our much-vaunted "free enterprise"!
posted by vorfeed at 2:45 PM on January 15, 2007

Arizona not only had the marijuana tax (passed in 1983,) it also required dealers to get a dealers license which cost $100.

But in the mid 90's somebody actually got the dealer's license, got the stamps, and started selling and almost got away with it. Now the law is off the books. Read about it here.
posted by lips at 5:10 PM on January 15, 2007

while paying this tax might not lead to you being busted for "admitting" that you sold drugs, it might be a nice starting point for a detective to start an investigation. He knows where to go to catch you selling or producing another batch.
posted by mulligan at 8:30 PM on January 15, 2007

I don't know if Texas is still selling them, but back in college, in the years when dinosaurs still roamed the earth, I bought two stamps and made earrings out of them. I haven't seen them in years, but I'm sure they're buried in a jewelery box somewhere. They were cool looking. Not as cool as Nebraska, mind you, but cool none the less.
posted by dejah420 at 9:14 PM on January 15, 2007

I don't know if Texas is still selling them, but back in college, in the years when dinosaurs still roamed the earth, I bought two stamps and made earrings out of them. I haven't seen them in years, but I'm sure they're buried in a jewelery box somewhere. They were cool looking. Not as cool as Nebraska, mind you, but cool none the less.
posted by dejah420 at 12:14 AM EST on January 16

I never figured I would say this but under the spirit of the post, eponysterical.
posted by TheOnlyCoolTim at 11:00 PM on January 15, 2007

I was watching the history channel tonight (tivo actually) about Marijuana and how and why it was really banned. It was banned to get rid of the Mexicans in the south west. The states wanted it as a federal law, and with the help of Hearst (who hated drugs) helped push out false propaganda. With so many Americans on the food lines (due to high unemployment) many didn't want illegal immigrants around. They where giving life sentences, and even tried to make it a hanging offense...

Did a google, and found an article that basically recaps the history channels show.
posted by IronWolve at 2:31 AM on January 16, 2007

What a bummer to see MN's utterly boring stamp in the gallery right above Nebraska's totally awesome one (wicked skull with the crossed joint and syringe below... because marijuana is the total gateway to heroin, dontcha know...) Although Nevada's is even duller than ours.

I've known hemp/headshops to stock MJ tax stamps for sale as novelties.
posted by nanojath at 9:22 AM on January 16, 2007

How to solve Afghanistan's drug problem: Legalize It.
posted by homunculus at 9:38 AM on January 16, 2007