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Drug Deal Taxes Fade Away In South Carolina

Jim Finnel

Fallen Cannabis Warrior & Ex News Moderator
In South Carolina, even drug dealers are expected to pay taxes. Perhaps more surprising: Some of them do.

Or at least they used to. The Department of Revenue collections from the Marijuana and Controlled Substance Tax Act has evaporated to almost nothing during the peak recession years.

The last fiscal year brought in just $149 from people purchasing an official stamp to place on their products or to add to their stamp collections.

Compare that with two years earlier, when the department collected $31,847 from the tax, the bulk of the nearly $43,000 total since fiscal year 2005-06. State law requires the revenue to be credited to the state general fund.

The department did not provide any possible explanation for the steep decline in revenue.

Under state law, if someone is caught selling drugs without an official tax stamp, the penalty is payment of 200 percent of what was owed in taxes and up to five years in prison, a $10,000 fine or both.

Since its creation nearly 20 years ago, South Carolina's law has survived a legal challenge on the grounds of double jeopardy in McMullin v. South Carolina Department of Revenue, according to the National Organization for the Reform of Marijuana Laws.

Dealers are not required to give their name, address or Social Security number on the payment form.

"One justification for taxes is that in return for submitting to taxation, payers receive the benefits of property protection, courts and so forth," said Richard Morrison, a communications manager for the Washington-based Tax Foundation. "Drug excise laws are at odds with that view, since taxpayers still get no legal protections."

He said Arizona was the first state to enact a drug excise tax in 1983. It was repealed in 1997 after a double-jeopardy challenge in which the taxpayer had purchased necessary stamps but was still arrested for drug violations.

"It's also just another example of states targeting some unpopular practice for punitive easy taxation, allowing the majority to consume more government services than they're willing to pay for," Morrison said.


Drug tax rates Revenue collected from South Carolina's Marijuana and Controlled Substance Tax Act, which was enacted in 1993, has dropped off suddenly in recent years.

The law sets three rates: $3.50 for each gram of marijuana, $200 for each gram of a controlled substance and $2,000 for each 50-dose quantity of a drug not sold by weight.

- -- Morris News Service

NewsHawk: Jim Behr: 420 MAGAZINE
Source: Augusta Chronicle, The (GA)
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