W. Alan Beckelheimer "Something To Think About ..." Published Jan. 5, 2005

New state excise tax will defer taxpayers' cost of law enforcement

The Tennessee Department of Revenue is preparing for the implementation of a new tax on unauthorized substances. While many of us rang in the New Year with friends and family, Tennessee's state excise tax on controlled substances went into effect with the coming of the first day of 2005.

This excise tax was created by Public Order 803 and was signed into law on June 3, 2004.
The tax applies to controlled substances and certain illicit alcoholic beverages, including cocaine, crack, methamphetamine, untaxed liquors and spirits, and marijuana.

Tennessee's Revenue Commissioner, Loren L. Chumley said, "The department is equipped to administer this tax that assists in controlling crime," she said, "The purpose of the tax on unauthorized substances is to channel funds collected into local law enforcement agencies."

This tax applies to substances in the hands of a dealer. The tax is payable within 48 hours of the dealer acquiring the substance. Dealers in illicit and controlled substances must travel to Nashville to purchase their tax stamps directly from the Department of Revenue. The commissioner will issue the stamps to be affixed to the substances to indicate payment of the tax. Any information obtained in accordance with this act cannot be used in criminal prosecutions, and nothing in the act provides immunity from criminal prosecution. If caught with unauthorized substances that do not have stamps, the Department of Revenue will collect all taxes due on those substances.

I believe this tax will have a profound effect on the state of Tennessee. The tax is designed to further defray the costs of law enforcement in the area of controlled substances by making those that deal in drugs pay taxes on their trade just like any other red blooded American. If dealers don't buy the stamps and continue to pursue their illegal trade and are caught, the department of Revenue still gets its tax money.

The statute also provides additional funding for local law enforcement agencies because any time they make an arrest involving drugs that do not have the tax stamp, they turn this information into the department of Revenue. Once the department of Revenue collects the appropriate taxes that were levied against the drug offender, a percentage of the tax dividend is given to the local law enforcement agencythat generated the funds.

This means that drug offenders and those that deal in drugs will finally be required to pay their share of the tremendous expense that government in our state pays out every year for law enforcement. This tax will free up tax payer dollars from being devoted to drug enforcement to being used for things such as schools and road improvements.

North Carolina instituted a similar tax on Jan. 1, 1990. During the time that North Carolina has had this law on the books they've only sold 79 of the tax stamps to drug dealers. This means that the majority of their tax collection has come from those unscrupulous enough to not purchase their tax stamps.

Total revenue raised by the state of North Carolina from their tax on unauthorized substances so far totals over $89 million dollars. This amounts to drug dealers in North Carolina contributing around $7 million dollars a year to the law enforcement agencies that busted them.

Although when I first read this law I was a bit confused by its language, the more I delve into it the more I am proud of its passage by the General Assembly.

This is a law that features responsibility as one of its basic tenets. Law abiding citizens shouldn't be required to bear so much of the burden of the costs of enforcing drug statutes because the average person doesn't transgress against them.

Many drug dealers don't work regular jobs so the only way they contribute to the tax base is through their sales tax transactions. This new law will end that practice and hopefully put a real hurting on those folks that make their living dealing drugs and living off of society without contributing their fair share.

Another key part of this legislation is that it in no way changes the criminality of having, possessing or using illegal drugs. This law merely raises revenue from the black market of drugs, which was previously an undertapped source of revenue for the state of Tennessee. So if you are an average citizen reading this, take pride in the law because it will do much to benefit our great state.

If you are a drug dealer you had better call the Department of Revenue at 615-741-7071 and inquire as to how you can purchase a stamp showing that you have paid the tax on your illegal drugs. If you don't you are taking a big chance because I am sure the state will frown on those dealers that don't have their stamps and are appearing in court for drug charges.

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W. Alan Beckelheimer is a Crossville Chronicle staffwriter. His column appears Wednesdays in the Chronicle.