Q&A: STATE'S DRUG TAX DESIGNED TO PREVENT BREAKS FOR ILLEGAL BUSINESSES

Question: Often I read in the police reports in your newspaper where a
person is arrested for drug violations "and failure to pay the Kansas
drug tax." What difference would it have made if he or she had paid
the drug tax? It is still illegal, isn't it? What does that tax
accomplish? How does it work? -- M.M., TOPEKA.

Answer: "The sale of illegal drugs is a highly profitable business,"
said Scott Holeman, communications director of the Kansas Department
of Revenue. "Because people who conduct legitimate business in Kansas
are taxed, the Legislature has determined that people who are involved
in illegal business should not be entitled to tax breaks, so the drug
tax was created."

When drugs are confiscated during a criminal investigation, agents
make an assessment and if immediate payment of taxes owed can't be
made, property can be seized to satisfy the tax liability, he said.

"The law does not stipulate any exemptions on what property can be
taken," Holeman said, "but it is not uncommon for agents to seize
vehicles, jewelry, cash, electronics and collections of value, such as
coins, baseball cards and stamps."

Drug tax stamps can be purchased from the Kansas Department of Revenue
in Topeka in denominations of $10, $50, $100, $500 and $1,000, he
said. They are sold anonymously as required by law to protect against
any violation of self-incrimination, which is protected by the
Constitution.

"The stamps are valid for three months from the date of issuance, and
if drugs are seized without stamps, or the stamps have expired, the
person in possession is liable for payment of the tax and a penalty of
100 percent of the assessment," Holeman said.

Seventy-five percent of the money collected from drug cases goes to
the law enforcement agency that conducted the investigation that led
to the seizure of the drug, Holeman said, and if agencies worked
together, that money is distributed equally. Twenty-five percent of
the money collected goes to the state general fund.

The peak year for stamp sales was in 1994 when sales exceeded $10,000,
he said, but that is dropped off in the past few years and so far this
year, only a few hundred dollars' worth of stamps have been purchased.

"A drug dealer who is obligated to pay this tax is defined as a person
who manufactures, produces, ships, transports, imports or possesses
more than 28 grams of marijuana, 1 gram of controlled substances or 10
or more dosage units of a controlled substance," Holeman said.