Don't Ask Me What I Want it For If you don't want me to pay some more
'Cause I'm the Tax Man Yeah, I'm the Tax Man --George Harrison, Tax ManRevolver (1966) Under Iowa Code 453B.12, a “dealer” must affix a drug tax stamp to each gram of processed marijuana, each unprocessed marijuana plant, each ten-dosage unit of any taxable substance other than unprocessed marijuana plants that is not sold by weight, or each gram or portion of a gram of any taxable substance sold by weight other than marijuana, or subject yourself to a Class D felony violation for failure to do so. The maximum penalty for each such failure is five years in prison. A dealer is “any person who ships, transports, or imports into this state or acquires, purchases, possesses, manufactures, or produces in this state any of the following:
a. Seven or more grams of a taxable substance other than marijuana, but including a taxable substance that is a mixture of marijuana and other taxable substances.
b. Forty-two and one-half grams or more of processed marijuana or of a substance consisting of or containing marijuana. One or more unprocessed marijuana plants. d. Ten or more osage units of a taxable substance that is not sold by weight.”
The rates of taxation are as follows:
1. On each gram of processed marijuana, or each portion of a gram, five dollars. 2. On each gram or portion of a gram of any taxable substance sold by weight other than marijuana, two hundred fifty dollars.
3. On each unprocessed marijuana plant, seven hundred fifty dollars. 4. On each ten dosage units of any taxable substance other than unprocessed marijuana plants that is not sold by weight, or portion thereof, four
hundred dollars. Such taxes are also levied against simulated and counterfeit substances which boggles the mind. If a dealer bags headache powder and passes it off to an unsuspecting buyer as cocaine, for example, it is taxable under this code section—even though it isn’t truly a drug and the dealer paid sales tax on it already at the local grocery store (where are the cries of double taxation!) I’ve always wondered whether you can actually purchase a drug tax stamp. It turns out that you can. Drug Tax Stamps may be purchased at the Iowa Department of Revenue, Taxpayer Services, Hoover Building 4th Floor, Des Moines, Iowa by appointment at 515-281-8966 or by mail to a valid US Mail address (although you can apparently keep your identity secret—don’t ask me how that works with the USPS because the postal service requires an identity to deliver mail, as opposed to, “the guy in the green shirt who sits on the porch next to the blue Ford,” PO Box 555, Nowheresville, Anystate). Of course, neither the code section nor the Department of Revenue endorse the possession, delivery, or manufacture of illicit controlled substances made illegal by the seemingly contradictory prohibition at Iowa Code § 124.401(5) et seq. That would be untoward. It is in this contradiction between 453B and the prohibitions contained in 124.401(5) that both hypocrisy and a legal fiction lie. First, the law purports that it is merely a tax on all acquisition, importation, and transportation of taxable substances but it is aimed only at those who unlawfully acquire, import, or transport such taxable substances. The law specifically exempts from its reach lawful acquisition, import, or transport by excluding “lawful” activities from the definition of “dealer,” for example, the transport of taxable substances seized by law enforcement. Also excluded are “pharmaceutical” activities. What comes to mind is the use of taxable substances for medical procedures—for example, cocaine is used as a topical anesthetic. See http://emedicine.medscape.com/article/874104-overview. Second, prosecutors will sometimes pile on a Trial Information with both a drug tax stamp and a possession with intent charge—in the interests of later dealing and dismissing away the PCS-with-intent charge for a plea to drug tax stamp. I don’t necessarily agree in principle but Section 453B is a criminal statute in the prosecutor’s toolkit from which to choose. The Code keeps up the taxman ruse by investing in the Director of the Department of Revenue the power to subpoena such dealers’ records to determine whether they should have paid the tax in the first place. But they’re not fooling anyone. It’s a cumulative criminal prohibition on possession—not a tax. And it will only make sound policy to tax controlled substances if and when the State legalizes, say, for example, marijuana.
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