KENTUCKY'S TAXATION OF ILLEGAL DRUGS STIRS DEBATE

FRANKFORT -- This isn't the same kind of taxation without
representation debate that prompted some Revolutionary War era
patriots to board the British vessels at Boston and toss crates of
tea overboard.

It isn't the same kind of tea, either, for that matter.

This is a debate over taxing drugs -- the illicit kind.

In 1994, the General Assembly passed the "Marijuana & Controlled
Substances Tax Act." As presented by its sponsors at the time, the
idea was to get at the heart of the drug trade by making it a
financial burden as well as a risk of penitentiary time.

To that end, the legislature imposed a tax of $1,000 on each
marijuana plant; $3.50 for each gram of marijuana -- colloquially
known as tea in some circles -- not attached to the plant; $200 per
gram of controlled substances and $2,000 on each 50 doses of
controlled substances not sold by weight.

The tax is due whenever there is possession of a drug and is
technically not related to any criminal charges. The statute allows
an individual to obtain a tax stamp without having to reveal anything
about their identity.

Even so, failure to have the yellow and black tax stamp affixed to
the drugs can bring a separate Class C felony.

Since its creation, the tax has brought in a remarkable $394,270.08,
according to the Kentucky Revenue Cabinet. There doesn't seem to be
any consistency in collections, though. In 1996, the total was
$201,688; in 1998, $4,135.

It is paid largely in cases where the cabinet is told by law
enforcement of drug busts. But there are other instances as well.

"We get letters saying, 'I'll pay this. Just please don't tell my
mother,' " Revenue spokesman Alex Rose said. "We get a few stamp
collectors. And we get a few people who want to make the drug tax
their cause."

State Rep. Robin Webb, D-Grayson, doesn't want to make the drug tax a
cause, but she does want to protect some potentially innocent parties.

Webb has legislation pending that would levy the tax only in cases
where there are convictions for drug offenses. As it is, she said, an
innocent landowner whose property might contain a few wild hemp
plants could find himself hauled before the Revenue Cabinet for a
drug tax hearing. In those cases, Webb said the cabinet usually
requires the posting of a bond equal to the potential tax.

Webb said there are few due process safeguards. "Any law enforcement
officer can call somebody into the Revenue Cabinet and start this
process," Webb said. "If John Q. Public landowner is not charged with
a crime, he is still assessed and has to get a hearing in the matter."

Webb said her family owns farmland in rural Kentucky. "Some of our
neighbors have been in the marijuana business," she said. If a seed
or two wanders across the fence, "It's just frightening to me."

With the due process argument, though, comes another legal complication.

"If they have to be convicted first, then you have double jeopardy
problems," Rose said.

The Kentucky Supreme Court and the U.S. Supreme Court have both ruled
that the statute as it stands now does not seek to penalize people
twice for the same offense -- known as double jeopardy.

A 1994 federal court ruling in a Montana case said drug offenders
could not be forced to pay a state tax in addition to criminal
penalties.

Unlike the Montana drug tax, Kentucky's highest court said, the
Kentucky levy is more tax than punishment and is due regardless of
whether a person has been arrested on criminal charges.

But there have also been some consequences that have prompted
legislators to reconsider the whole matter. Charles Thomas Jr., a
27-year-old Breathitt County man, got a $1 million bill two years ago
from the cabinet after Kentucky State Police identified him as being
involved with the seizure of 517 marijuana plants on property near
where he lived. Thomas said the marijuana was not his and he had
nothing to do with it, and he has never been convicted of a crime.

Nevertheless, the cabinet has tried to seize his bank accounts and
place liens on his property. The cabinet has more recently relented
and allowed him to protest the tax without posting a bond.

The House passed the bill last week by a vote of 93-1, with the vote
of Rep. Charles Geveden, D-Wickliffe, one of the original sponsors of
the tax six years ago. Geveden said he too was concerned about the
kind of implications that struck Thomas.