Source: The Augusta Chronicle (GA)
Contact:  http://www.augustachronicle.com/
Pubdate: Sep. 14 at 10:17 PM
Author: Associated Press

TAX ON ILLEGAL DRUGS IN JEOPARDY

GREENVILLE, S.C. -- A South Carolina law requiring dealers to pay taxes on
illegal drugs like marijuana may be in jeopardy because of a North Carolina
lawsuit challenging a similar law, state officials say.

The law requires brightly colored tax stamps affixed to every gram of
illicit drugs sold. South Carolina has sold about 300 stamps in the past
five years, mostly to collectors.

The similar law in North Carolina has been overturned by a federal appeals
court and goes before the U.S. Supreme Court next month, which worries South
Carolina regulators.

``Our law is based on the North Carolina law in some detail,'' said Danny
Brazell, a South Carolina Revenue Department spokesman. ``It could certainly
affect us if the courts rule against North Carolina.''

South Carolina is not alone in closely watching the case. The other states
with the tax are: Alabama, Connecticut, Indiana, Iowa, Kansas, Maine,
Massachusetts, Montana and Nebraska.

The 4th U.S. Circuit Court of Appeals threw out the North Carolina drug
stamp law, saying its primary thrust was as a criminal penalty, not a
revenue-raising tax. The tax levies could submit drug dealers to a second
round of punishment for a single crime, or double jeopardy, the court said.

The federal panel cited the high fines for violating the law, nearly eight
times the street value of the drugs. North Carolina collects about $5
million annually, with nearly 75 percent of that going to the local police
agencies making the arrests.

South Carolina has collected less than $100,000 of the $7.5 million assessed
in 130 cases since the law went into effect in 1993. The stamps range from
$3.50 for a gram of marijuana to $2,000 for 50 doses of a controlled
substance, such as LSD.

The Revenue Department has just one person overseeing the program, which
makes it hard to track drug seizures and make cases statewide, Mr. Brazell
said.

State officials also say local police are not inclined to enforce the tax
law because their emphasis is on keeping the money they make from drug
forfeitures that helps pay for anti-drug programs and for bulletproof vests,
helicopters and other police equipment, [as]The Greenville News[xs] reported
Monday.

Greenville lawyer Chip Price, who previously challenged North Carolina's
law, said the South Carolina law has been used more for show than as an
enforcement mechanism.

``It was created by the Legislature simply as another get tough on crime
stance,'' he said.

University of South Carolina drug expert Andrew Chishom also questioned
whether the law can make a difference unless it is used against more than
just street-level pushers.

``How beneficial can it be unless it is used against the people who are the
big dealers, who make a good livelihood off selling drugs,'' he said.

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Checked-by: Don Beck