'CRACK TAX' STRUCK DOWN

Judge Rules State Law Unconstitutional In Jefferson County Drug Ring
Case

A judge has struck down as unconstitutional the state's so-called
"crack tax" in the case of a man accused in a massive Jefferson County
marijuana trafficking ring.

But Knoxville attorneys insisted Tuesday that Davidson County
Chancellor Richard H. Dinkins should have added one more descriptor
for the now 18-month-old tax - evil.

"It makes you ashamed for America," attorney Ralph Harwell said of
the state's enforcement of the Unauthorized Substance Tax Act, a law
enacted ostensibly to levy a tax on drug dealers.

"Of all the unconstitutional laws, this one should be in the hall of
fame," attorney Gregory P. Isaacs added.

It was defense attorneys James A.H. Bell and Richard L. Holcomb who
convinced Dinkins to strike down the tax, dubbed the "crack tax" soon
after it became effective in January 2005.

Bell and Holcomb were challenging the state Department of Revenue's
levying of a $1.1 million tax on Jeremy Robbins of Jefferson County,
who is accused of dealing marijuana.

Robbins is charged along with at least eight other people of
conspiring to funnel more than two tons of marijuana from Arizona to
East Tennessee. Arrested in April 2005, he has been indicted in U.S.
District Court. He has not been convicted.

Despite that, the state Department of Revenue had assessed a tax on
the amount of marijuana authorities alleged he had sold and took steps
to collect it. Bell said Robbins was told to either ante up or watch
the agency take his stuff.

That Robbins is presumed innocent did not matter, Bell and Holcomb
argued. The "crack tax" trounced on that right, along with rights
guaranteed under both the state and U.S. Constitutions, such as the
right to due process and the right against self-incrimination, the
pair of attorneys contended. In a ruling issued late Monday, Dinkins
agreed.

"The act on its face fails to ensure the constitutional guarantees in
several particulars," Dinkins wrote.

It's the way the tax was crafted and is enforced that is legally
flawed, the chancellor ruled.

When it was passed, it was described as akin to the cigarette tax.
Drug dealers would purchase a stamp for their illegal wares as a means
to pay it. If they didn't, the revenue department could assess the tax
against drug dealers. The law is modeled after similar taxes in more
than two-dozen states including Texas, Kansas and Connecticut.

Tennessee's tax operates completely separate from seizure laws already
in place under the criminal justice system.

Of course, no drug dealers voluntarily coughed up money to buy the tax
stamps. Yet, the revenue department has collected $2.7 million in the
18 months since the tax was passed.

How? According to Dinkins' opinion, the tax law allows revenue agents
to levy a tax on people accused in drug cases. The law gives the
accused dealer two choices: Pay up and try to get a refund later or
pay up and appeal. "Taken as a whole, the statute places the burden
upon the taxpayer to convince the commissioner or a chancery court
that the taxpayer is not liable for the tax rather than the
commissioner proving the taxpayer's liability," Dinkins wrote.

It does not matter under the tax law whether the person is eventually
found guilty of being a drug dealer or declared innocent, the judge
noted. The tax is levied, Dinkins wrote, long before the accused faces
trial in a criminal court. Harwell contended that the tax has been
levied in cases where a person is not even charged with a drug crime.

He has a client now whose son was nabbed with marijuana in his
father's truck. The client has never been charged. The son is under
investigation. Yet, Harwell said, a state Department of Revenue agent
showed up at his client's Blount County home, "walked through and
said, 'I want this. I want that.' " Harwell's client has been assessed
a tax bill of $193,000 in connection with a marijuana probe that the
man so far is not even accused of being involved in, the attorney
said. Harwell plans to file an appeal. The revenue department denies
heavy-handed tactics. Spokeswoman Emily Richard said Tuesday the
agency would continue to collect the tax until ordered to stop.

Sharon Curtis-Flair, spokeswoman for the state Attorney General's
Office, said the state would appeal Dinkins' ruling.

The ruling only stays the collection of the tax in Robbins' case. But
his conclusion that the tax is unconstitutional will buttress other
court challenges and ultimately will lead to an appellate court
decision on the validity of the tax.

Local attorneys contend a final decision striking down the tax as
flawed cannot come soon enough.

"It offends every notion of due process we have in this country," Bell
said. "We just settled to be done with it," Isaacs said of one of his
clients. "To say it was a kangaroo court would be disrespectful to
kangaroos." "They are nothing more than out-of-control bill collectors
with badges," attorney Bruce Poston said of revenue agents. "Half
these people (taxed) weren't even dealing drugs It's a tax on
something that is illegal to possess. It's ridiculous."