Have you paid your weed taxes?
I have to pay taxes on my illicit drugs? Say what?
In North Carolina, drug dealers must pay State taxes. As the General Assembly sees things, ‘dealers’ are obligated to pay the tax regardless of whether they are investigated or charged for a crime. The specific purpose of this tax is articulated in North Carolina General Statute 105-113.105. The General Assembly mandates this tax to generate revenue for State and local law enforcement agencies and for the General Fund.
So who amounts to a ‘dealer’?
North Carolina General Statute 105-113.107 defines ‘dealer’ as “a person who actually or constructively possess more than 42.5 grams of marijuana, seven or more grams of any other controlled substance that is sold by weight, or 10 or more dosage units of any other controlled substance that is not sold by weight. A handful of alcohol violations are also included in the definition of dealer.
So what is a dealer to do?
They have to buy revenue stamps. They have 48 hours to acquire the stamps from the time they come into possession of the unauthorized substance. This time frame excludes weekends and State holidays.
Where can I get stamps?
Controlled substance revenue stamps are sold by Secretary of Revenue. It is my understanding that if you seek to buy stamps in Raleigh, you have to go to the office located on Atlantic Avenue out by the Char-grill. When the dealer arrives, they must personally report the amount of unauthorized substances for which they seek to pay taxes. Dealers are not required to give their name, address, social security number, or other identifying information on the report. Once the dealer has paid the tax, the Secretary must issue stamps in an amount equal to the amount of tax paid. There is an option for taxes to be paid, and stamps to be issued, by mail. However, a dealer’s use of a return address could create foreseeable issues.
How much do stamps cost?
Harvested marijuana stems and stalks that have been separated from and are not mixed with any other parts of the marijuana plant are taxed at a rate of 40 cents per gram, or fraction thereof. When it comes to the remaining portion of the plant, a tax rate of $3.50 is imposed.
Cocaine is taxed at a rate of $50.00 for each gram. Recall that a person must possess at least 7 grams to qualify as a dealer. Accordingly, right off the bat, they face a tax of $350.00 (7 grams at $50 a gram is $350). Likewise, any “low-street-value” drug that is sold by weight is also subject to the $50/gram rate. All remaining drugs that are sold by weight are subject to a $200/gram rate.
When it comes to drugs sold by quantity, a rate of fifty dollars is assessed for each 10 units, or fraction thereof, of any “low-street-value” drug. The rate rises to $200/10 dosage units (or fraction thereof) for all other quantity driven drugs.
I’ve got my stamps, now what?
Once the dealer has obtained the stamps, they are obligated to affix the stamps to the unauthorized substance. Once the stamp has been affixed, if the substance is transferred from one dealer to another, no further tax is due. However, it still remains a crime to possess the unauthorized substance in the first place.