Lawmakers in Tennessee had an interesting idea a couple of years ago. Why not tax illegal drugs? So legislators in the Volunteer State required sellers of illegal drugs to get a tax stamp on their merchandise. If sellers were caught selling illegal drugs without the tax stamps, they would face tax charges (and probably charges relating to selling illegal drugs, too).
Of course, if you want to have such a tax, you must make sure that there’s a wall between revenue agents and the drug police (or the tax would likely be unconstitutional under the 5th Amendment). A lower court found that Tennessee’s tax violated that.
However, the Tennessee Court of Appeals ruled that the tax also violates the Tennessee Constitution, in that “…the statute is arbitrary, capricious, and unreasonable and, therefore, invalid under the Tennessee Constitution, in that it seeks to tax as a privilege, activity that prior legislation has designated as criminal activity….”
Tennessee will appeal to the Tennessee Supreme Court.
Tags: CrackTax