Drug Penalties: Tennessee Appeals Court Finds Drug Tax Unconstitutional

Submitted by Phillip Smith on (Issue #501)
Consequences of Prohibition
Politics & Advocacy

(See David Borden's blog post this morning on this topic.)

In a September 6 opinion, the Tennessee Court of Appeals ruled the state's tax on illegal drugs, widely known as the crack tax, is unconstitutional. The state cannot impose a tax on items it considers illegal, such as illicit drugs or moonshine, the court held.

[inline:tn-drug-stamp.jpg "align=left" caption="widely-posted Tennessee drug tax stamp image"]Under the law, which went into effect in 2005, Tennessee has collected more than $6 million from drug suspects. Much of the money came from confiscated property.

In the case before the court, Steven Waters of Knoxville was arrested in 2005 shortly after purchasing a kilogram of cocaine valued at $12,000 from an informant. A few days later, the Tennessee Department of Revenue sent Waters a tax assessment demanding more than $55,000. It also filed a tax lien against real property owned by Waters and seized $4,000 from his bank account.

Waters sued, charging the tax violated constitutional self incrimination, due process, and equal rights protections under both the state and the federal constitutions. A trial court found in Waters' favor, and now, the state Court of Appeals has agreed.

The state cannot impose an excise (or "privilege") tax on items it has criminalized, the court held: "Because it seeks to levy a tax on the privilege to engage in an activity that the Legislature has previously declared to be a crime, not a privilege, we must necessarily conclude that the Drug Tax is arbitrary, capricious, and unreasonable, and therefore, invalid under the Constitution of this state," the opinion read.

The state of Tennessee has 60 days to file an appeal to the state Supreme Court. The Department of Revenue says it plans to appeal and will continue collecting the tax in the meantime.

More than 20 other states have similar illegal drug tax laws.

Permission to Reprint: This content is licensed under a modified Creative Commons Attribution license. Content of a purely educational nature in Drug War Chronicle appear courtesy of DRCNet Foundation, unless otherwise noted.


Anonymous (not verified)

1) End over 80% of muggings, theft, house break-ins, burglaries

2) Stop the major source of cash flow for organized crime

3) Stop the major source of corruptioninthe police force

4) Free up tens of billions of dollars and tens of thousands of police time for other crimes like domestic violence, rape, robbery....

5) End the hypocrisy of legalizing all the social problems of alcohol and tobacco but criminalize other drug choices

6) End the hyopcrisy of sympathy for alcoholics but criminalizing opiate addicts

The porblem is not drug use but drug abuse. Treat drug abuse as ahealthissue not a crime

SOLUTION: re-legalize via controled and regulated access all illegal drugs for adult consumption

Fri, 09/14/2007 - 4:21pm Permalink
Anonymous (not verified)

In reply to by Anonymous (not verified)

oh and there was/is a similar issue in alabama involving sale of adult toys; e.g., vibrators, being illegal ... w/ u.s. supreme court stating something like what goes on in a person's house and is private is NONE OF ANYONE'S BEESWAX!! is the SAME deal when we smoke a joint (or whatever) in our private spaces ...

in alabama

Sun, 09/16/2007 - 8:47pm Permalink
Anonymous (not verified)

One thing the government fails to realize is that the vast majority of drug users are purely recreational users and not addicts. They should re-legalize everything, including opiates, and tax it all like they do alcohol. This won't likely increase overall use, just allow those of us who already do it to do it legally.

Mon, 09/17/2007 - 11:53pm Permalink
Anonymous (not verified)

In reply to by Anonymous (not verified)

i like how u think guy!!! i smoke pot and also do i like it look at the stats of drinkin and drivin or even just drinkin to much causeing deaths and then look at the same on those of pot and it shows clearly hands down that pot should be legal before drinkin not am i sayin to take away drinkin cuz i also love to do that but just sayin IF U LET US DRINK LET US SMOKE POT just speakin my peace

Tue, 06/23/2009 - 8:44pm Permalink
Anonymous (not verified)

We got stopped going into Bonnaroo and they confiscated a bunch of pot brownies and some cooking oil which contained a small amount of ganja. The cops let us go with a citation, then we had to see the revenue guy. He charged us the $3.50 tax per gram that this law calls for. Each brownie weighs between 60-70 grams! In the end we owe well over half a million dollars and had to make a payment of $7000 so he would not seize our vehicle!

I honestly don't have a huge problem with this tax law in general. It makes sense as a revenue generator, as long as it is applied fairly. However we were charged a tax of over 10000x the street value of these brownies and oil!

The law is still up for review in the State Supreme Court. Hopefully our case will get thrown out!

Thu, 06/19/2008 - 1:02am Permalink
Jimmy (not verified)

Tha drug tax is just another way to justify the thieves on the other side of the badge! I was taxed about $100,000 in 2005 for having almost 200 female plants. Since this law was deemed unconstitutional by the supreme court, the taxes against me have been lifted and i have received a small portion of what i paid to the Tn. Revenue Dept. If you have had property siezed or have paid some of these taxes, i strongly suggest that you contact Att. Phil Lamonaco in knoxville Tn. He is very familiar with this and will take action with results for you in the end! Just because they wear a badge it doesn't make em right...stand up people!

Sat, 01/09/2010 - 10:23pm Permalink
Randy Miller (not verified)

The only reason marijuana is illegal is they can't control it. Once it becomes legal, there goes all the potential tax revenues. One has to remember that all politicians are LAWYERS and they take care of each other. Just think of all the money lawyers would lose defending folks getting busted for possessing a harmless weed. Hell tobacco kills more people in a day than pot has in my lifetime.

Tue, 04/20/2010 - 3:51pm Permalink

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Source URL: https://stopthedrugwar.org/chronicle/2007/sep/14/drug_penalties_tennessee_appeals