TAXES ON ILLEGAL DRUGS PAY OFF FOR STATE

Money Being Taken From Some Innocent People, Defense Attorneys Say

Tennessee modeled its program to collect taxes on illegal drugs after
North Carolina's, but early returns indicate that the Volunteer
State's 6-month-old effort has been more successful.

A report released yesterday showed that Tennessee had collected about
six times more taxes on controlled substances as did its neighbor to
the east in its first six months. Substances taxed include cocaine,
crack, methamphetamine and marijuana.

The 10-person unit of the Tennessee Department of Revenue reported
that it had collected $606,687 and assessed more than $15 million.
The department has spent $376,400 since the program began in January.

North Carolina's Department of Revenue collected $107,000 in the six
months after its program began in January 1990.

"I will say we've exceeded our expectations, based on what North
Carolina did in their first six months," said Emily Richard,
Tennessee Department of Revenue's spokeswoman. "I feel like it was a success."

Ron Starling, director of North Carolina Department of Revenue's
unauthorized substance tax division, said the year ended June 30 was
its most successful; $9,349,533.55 was collected, nearly a million
more than last year, bringing its 15-year total to almost $90 million.

The tax also applies to illicit alcoholic beverages, such as untaxed
liquors and spirits. It applies to dealers who possess illegal
substances, and the tax is payable within 48 hours of the dealer
acquiring the substance.

Despite Tennessee's success with the new tax, some defense attorneys
think that some people being taxed are not guilty of drug possession.

"I don't have a problem with money being taken from people who are
proven to be involved in some sort of illegal conduct," said Erik
Herbert, a Nashville defense attorney. "The issue that I have are
these liens and monies being taken before it's proven people have
done anything wrong."

Herbert represented Michael Garcia, who was ordered to pay $17,592 in
taxes in April after being stopped as he followed a vehicle going
through Springfield. Authorities said the other vehicle was carrying
10 pounds of marijuana, and police said they suspected that Garcia
was running interference for a drug dealer.

Garcia was never arrested or charged.

Last week a state revenue department lawyer waived the assessment,
saying there wasn't enough evidence to prove Garcia possessed the drugs.

Herbert said Garcia probably isn't the only innocent person who was
assessed the tax.

"If you've got financial resources, you can go out and hire an
attorney to represent you and potentially convince the Department of
Revenue" to waive the tax, he said. "But there are thousands of
people out there that don't have resources to test this and will have
property taken from them or liens. There's no judicial oversight to
make sure this is done properly."

Richard, the Revenue Department spokeswoman, said officials expected
such criticisms.

"There are some of these challenges that have been filed, and we
expected them," she said. "We're implementing and executing a law
that was enacted by the General Assembly."