ILLEGAL-DRUG TAX BUDS INTO PROFIT

Here's a rare bright spot in the state budget: Income from taxes on
marijuana, cocaine and other illegal drugs is up this year.

Say what?

Believe it or not, state tax collections on marijuana increased by 3.6
percent, from $139,227 to $144, 236, in the first half of this fiscal year.
And tax collections on cocaine, methamphetamine and other hard drugs are up
a whopping 20.6 percent, from$252,515 to $304,905.

Perhaps an explanation is in order.

The state taxes marijuana and cocaine just as it does such legal products as
alcohol and cigarettes.

It even issues a gold foil "drug tax stamp," showing a marijuana leaf, a
vial of cocaine and three pills. The stamps come in handy denominations from
$10 to $1,000.

Illegal drugs have their own tax table. For example, there are three
different rates for marijuana: "wet plant," "dry plant" and "processed."

Under the relevant state law, "the drug tax is due as soon as the dealer
takes possession of the marijuana or controlled substance," according to the
state Department of Revenue's Web site.

Dealers are supposed to "attach the stamp to the marijuana and/or controlled
substance immediately after receiving the substance."

Although it sounds pretty goofy, the drug tax actually makes sense on
several fronts, officials said.

For one thing, it allows the state to seek civil penalties from dealers
regardless of the outcome of any criminal prosecution, said Bob Longino,
director of the Division of Alcohol Beverage Control, the branch of the
Revenue Department that administers the program.

And while federal law allows the seizure of assets used in the drug trade,
the state tax law throws a broader dragnet. The state can seize any property
owned by the drug dealer -- whether it's used in the drug trade or not -- to
satisfy an outstanding tax obligation, Longino said.

No one seriously suggests that drug pushers, who by definition are breaking
the law, are buying tax stamps.

"Just about the only people who buy those are stamp collectors," said Sen.
Stan Clark, R-Oakley, a member of the Assessment and Taxation Committee.

"My son and I collect stamps, but we didn't want that kind of public
exposure," he laughed.

He needn't have worried too much.

The Revenue Department is well aware of the collector interest in its
stamps, Longino said. "That's about all we sell."

In fact, the department's Web site even has a "frequently asked questions"
page about the drug tax stamps.

One of the questions is "Can I purchase drug tax stamps through the mail?"

The answer is "Yes." But, "the purchaser will need to provide their mailing
address in order for the department to send drug tax stamps."

You might think it would take a pretty dim-witted drug dealer to fall for
that.

But the Revenue Department assures that drug stamp purchases are anonymous
- -- and information is not shared with law enforcement -- to protect the
stamp buyers' constitutional right not to incriminate themselves in a crime.

Because the tax usually is collected only after a drug dealer is arrested,
75 percent of the money goes to the local law enforcement agency while 25
percent goes to the state general fund.

Last year, Sedgwick County got $54,000 in drug-tax proceeds, finance
department records show.

In the last session of the Legislature, lawmakers working to close a $700
million-plus budget gap voted to raise the tax on cigarettes by 55 cents a
pack -- but left the marijuana and drug tax rates untouched.

How fair is that?

Not very, several lawmakers said.

"I guess maybe nobody thought about it," said House Majority Leader Clay
Aurand, R-Courtland. His guess was that legislators were busy looking for
big money and overlooked small-ticket items like the drug tax.

Yet, it's probably the one tax increase even the most anti-tax legislator
could love.

"The standard argument is that if you raise taxes too much, people won't buy
the product," Aurand said. Which, he pointed out, is kind of the point of
having drug laws in the first place.

"There's no reason not to double it," he said.