DEALERS SOON MUST PAY TAXES ON DRUGS

As if drug dealers didn't have enough to worry about, starting
Saturday the state of Tennessee also will expect them to pay taxes on
their merchandise.

But according to Sam Chester, assistant commissioner with the
Department of Revenue, state officials know well and good that dealers
will not be "beating down the door" to pay taxes on the illegal
substances they sell.

"We know that's not the way the revenue will come in," he said.
However, the new state law will give the government an even greater
opportunity to hit drug dealers where it hurts the most, in their wallet.

As Chester explained Thursday afternoon, by law, individuals must have
prior knowledge that their merchandise will be taxed as well as given
the opportunity to pay that tax.

According to the state's Department of Revenue Web site, the new tax
on "unauthorized substances" was created by Public Chapter 803 on June
3 and goes into effect Saturday. The tax will apply to controlled
substances including cocaine, crack, methamphetamine, "certain illicit
alcoholic beverages" and marijuana.

Chester said there will be different tax rates for different
substances. For instance, on marijuana, there will be a tax of $3.50
per gram. That tax rate is for manicured marijuana that is ready for
sale. On harvested marijuana stems, such as those plants seized as
part of the Tennessee Bureau of Investigation's marijuana eradication
program, the tax will be 40 cents per gram. A gram of cocaine, which
locally sells anywhere from $80 to $100, will carry a tax of $50.

According to Chester, dealers are defined as individuals who possess
42.5 grams of marijuana or 7 or more grams of any other substance sold
by weight, such as cocaine or 10 or more dosage units for prescription
drugs such as OxyContin.

"A dealer is someone who has amounts more than that defined as 'casual
use' in their possession," Chester said.

Tennessee officials patterned the new law after one North Carolina has
had for several years, according to Chester. He said that while some
tax stamps were issued in North Carolina, those were mainly purchased
by stamp collectors. "Based on their history, we'll probably issue 10
a year," he said.

The state expects to collect more than $3 million a year from the new
tax. Chester called the $3 million "a fairly accurate figure of what
we expect to collect. We patterned the law after North Carolina's.
It's a fairly conservative estimate considering it will take some time
to start up and get the funds coming in."

Seventy-five percent of the money collected will go back to the law
enforcement agency responsible for the conviction.

"It does make sense," Chester said. "Frankly I'm surprised we haven't
done this sooner. It's a way to make those selling drugs help foot the
bill for drug enforcement."