A WAY TO STAMP OUT ILLEGAL DRUGS

North Carolina drug dealers should consider embracing the Grim Reaper and
other drug tax stamps. Their unwillingness to buy the state-issued stamps
has cost them $81.4 million in cash and property since 1990. That's when the
state legislature passed a law requiring illicit drug and alcohol to
purchase and affix stamps to their wares.

State officials say that only collectors buy the stamps, though the law
states that buyers don't have to reveal their identity or give personal
information.

Revenue officials are also prohibited from divulging information about
buyers. Stamps cost $50 per gram for cocaine, $3.50 per gram for marijuana
leaves and 40 cents per gram for marijuana stems and stalks. Other stamp
prices include $200 per gram for other controlled substances sold by weight.

There are also fines and penalties for untaxed alcohol, including moonshine,
ranging from $31.70 a gallon for "illicit spiritous liquor sold by the
drink" to $1.28 a gallon for mash.

Dealers must affix the stamps to a minimum of 7 grams of cocaine and 42.5
grams of marijuana. Dealers who fail to do so are subject to the tax and a
40 percent penalty. The agency that seizes the drugs gets 75 percent of the
proceeds. The remaining 25 percent goes into the Legislature's General Fund.
North Carolina ranks first in collections among the 22 states that have
stamps, said Ron Starling of the state Department of Revenue in Raleigh. "No
one complies with this law," Starling said.

Starling is the director of the Unauthorized Substances division, which is
responsible for selling stamps and issuing proceeds from drug seizures. Only
79 people have bought stamps since 1990, Starling said. One cocaine stamp
has been sold, and no stamps have been found on seized drugs or alcohol, he
said.

Revenue officials believe collectors, not drug dealers, account for all the
purchases. Cocaine was originally taxed at $200 per gram and subject to a
100 percent penalty, but a court ruling led to changes.

The U.S. Fourth Circuit Court of Appeals ruled in 1998 that North Carolina's
drug tax law was unconstitutional. The court said the tax was a criminal
penalty that amounted to double jeopardy when combined with a conviction. At
the time of the ruling, the penalty was 50 percent, Starling said. "When the
court made its ruling, we kind of stopped," he said. State lawmakers
eventually lowered the tax to $50 per gram and the penalty to 40 percent to
withstand any constitutional challenges and make it acceptable to the
federal courts, Starling said.

Collections have grown significantly since the changes. Between July 1998
and June of this year, the Department of Revenue has disbursed $27.5
million. His division disburses an average of $500,000 to $600,000 a month,
Starling said. The Charlotte-Mecklenberg Police Department, in the state's
most populated city and county, has received the most money, $3.86 million.
Raleigh police received $953,000; Greensboro police more than $528,000.
Alamance County agencies have received nearly $280,000 over the same span.
The sheriff's department received $123,875, Graham police $71,143.
Burlington police have gotten about $60,600.

Fiscal year 2002 marked the biggest single collection year for the three
local agencies, when Graham earned about $36,330, the sheriff's department
about $29,000 and Burlington about $15,260.

Agencies decide how to spend the money they receive. By law, local
governments can't force departments to use the disbursements to pay for
budgeted items.

Sheriff's spokesman Randy Jones said the tax is a good tool against drug
dealers. "When we hit them in the pocketbook, that's the most effective."
Drug tax money has purchased cars, computers, radios and surveillance
equipment for their departments, Jones and Graham Police Capt. Jeff Prichard
said. Prichard said the addition of a second vice officer in Jan. 2003 has
boosted drug arrests and seizures in Graham. But he said he can't explain
why Graham - which is about one-fourth the size of Burlington - ranks second
in the county in money earned.

"Drug work by its nature is inconsistent," he said.