VOL. 125 | NO. 50 | Monday, March 15, 2010
Tenn. Lawmakers Seek to Revive 'Crack Tax'
ERIK SCHELZIG | Associated Press Writer
NASHVILLE, Tenn. (AP) - Tennessee lawmakers are trying to revive a state law taxing illegal drugs that was declared unconstitutional last year.
The measure sponsored by Democratic Rep. Charles Curtiss of Sparta and Republican Sen. Randy McNally of Oak Ridge would rewrite the law known as the "crack tax" to specifically target drug dealers.
Tennessee's drug tax that took effect in 2005 and generated more than $10 million required people to buy tax stamps for illegal drugs and liquor, just as wholesalers must buy for cigarettes.
The measure allowed the state to go after the belongings of people who are caught with illegal drugs or alcohol that didn't bear the special tax stamps, regardless of the outcome of their criminal cases.
"Mainly it's to make criminals pay for the cost they impose on society in general," McNally said Thursday. "Why should the general public have to pay to defend a drug dealer?"
The state Supreme Court in a 3-2 decision last year found the law unconstitutional because it exceeded the state's taxing power on "merchants, peddlers and privileges."
Curtiss told the House Government Operations Committee on Wednesday that state lawyers think they could defend a rewritten law that would define as dealers those who posses at least 1.5 ounces of marijuana, more than 7 grams of other drugs sold by weight or more than 10 doses of narcotics not sold by weight.
"There's going to be fewer people caught in this particular tax because of what some of the challenges were," Curtiss said. "We think we've got them all resolved."
Legislative analysts project the new law would generate about $1.1 million per year but would cost the state about $700,000 annually in personnel costs, primarily because of the need to restore 15 positions eliminated from the Revenue Department's tax enforcement division after the law was declared unconstitutional.
Revenue Commissioner Reagan Farr said it's unclear whether lawmakers can just designate someone in possession of a certain amount of drugs to be a dealer, or if authorities would have to wait for a court to make that determination.
"The way this tax worked is we went out, levied and did a jeopardy assessment before you had time to dispose of the assets," he said. "If we have to wait for a criminal court to find that you had the intent to distribute, then there's no point in passing a new program."
Farr said lawmakers will have to decide if it's worth passing a law that will likely see another series of costly legal challenges. Curtiss told the House panel that there's always a risk of being taken to court.
"Any time we pass a law, it's subject to be challenged," he said. "But the attorneys believe we have something that can be defended."
Read SB3134 at http://capitol.tn.gov
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