Crack Tax Collectors

Jacob Sullum | February 7, 2006

Tennessee proudly announces that its tax on "unauthorized substances," including illegal drugs and moonshine, generated $1.7 million in 2005, the first year it was in force. In addition, the Tennesseean reports, "more than $32 million in uncollected taxes has been assessed." The paper explains:

Under the law, drug dealers are to pay taxes to the Department of Revenue within 48 hours of acquiring an unauthorized substance and obtain a state tax stamp. The amount of money taxed varies based on the type and amount of the drug. Payment of the tax is to be kept confidential and the information is not to be shared with law enforcement. If police catch a suspected drug dealer without the stamps, the tax is assessed, along with a fine for failure to pay the tax upfront.

The state can seize a suspected drug dealer's personal property in lieu of tax payments, even before he's convicted--indeed, even if he happens to be acquitted. A Nashville defense attorney told the Tennesseean the law "is allowing revenue agents to seize personal property of citizens based solely on an accusation by a police officer."

Stephen F. Hayes reported on Indiana's similar scheme of double punishment in the February 2000 issue of Reason.

[Thanks to mediageek for the tip.]