Sunday, June 05, 2005

TN Drug Tax Law: No Arrest, No Guilt Required for State to Punish You

I found some time, so this post has been updated with my comments added (in bold) to the story from yesterday's Tennessean. Links to the law and requisition form have also been added.

Tennessee: Sounds like Police State to me...

Today's Tennessean has a story on the horrific violation of constitutional rights that Tennessee lawmakers endorsed with their passage of the drug tax stamp law last year. Not only is no guilt required for the State to seize everything you own, no arrest is required!

When a number of Tennessee lawmakers were recently arrested for taking bribes, lawmakers and the Governor, himself, repeatedly insisted that said lawmakers were 'innocent until proven guilty.'

How laughable that sounded to me. In this State, the right to be presumed innocent until proven guilty is a right that State lawmakers now reserve for themselves. To hell with the rest of us.

I've read this outrageous law (the Soviet Union would have been proud) and will have more on its impact on my family, or the developing nightmare as it develops.

Other than figuring out how to deal with a State that shows no respect for the constitutional right of due process, my family is wondering if we really want to continue to live in such a terrifying state. Once we get through this nightmare, it may be time to look for, I dunno, a place that values freedom. A place that respects the rights enshrined in the U.S. Constitution.

Does anyone know of such a place?

From today's Tennessean:

"There has to be in America some responsibility for the government to prove the citizen did something wrong before it punishes the citizen."

No arrest needed for state to tax illegal drugs: Defense lawyers say Tennessee's new law is ripe for abuse


Police suspect that Michael Garcia used his car in April to run interference for a drug dealer who was later caught transporting 10 pounds of marijuana through Springfield, a town 35 minutes northeast of Nashville.

Garcia said he merely found himself driving behind another motorist while in town to visit a girl and was mysteriously pulled over by an officer.

He wasn't arrested, but six days later the 30-year-old landscaper from Nashville received a letter from the state Department of Revenue demanding that he pay $17,592 in taxes he owed for his role in drug trafficking.

He figured it was a mistake or maybe a joke.

"The revenue guys showed up with the bulletproof vests and the guns and stuff, and that's when I knew it was for real," Garcia said.

Garcia is among the first targets of a new state law that requires people who profit from illicit drugs to pay their fair share of taxes. In January, Tennessee became one of 23 states that tax illicit drugs, according to the National Conference of State Legislatures.

As this case demonstrates, the drug tax stamp law is being used against persons whom police suspect of profiting from illcit drugs, or persons whom police say are profiting from drugs. The amount seized or stolen by the state will vary according to the value of drugs that police suspect or imagine you have. The burden of proof is not on the police.

Police are both judge and jury. Can we say ‘Police State’?

Since the law took effect in January, Tennessee's Department of Revenue has collected nearly $400,000 in taxes. An additional $11 million in taxes has been levied but not collected, often because the debtors are in jail or can't afford to pay.

Some defense attorneys say the new law is quickly becoming an example of government running amok, with innocent residents who have not been convicted of crimes, or even charged, being bullied into paying thousands of dollars in taxes.

"That's the biggest beef the attorneys and citizens have with this is that you're guilty until proven innocent," said Nashville attorney Erik Herbert, who represents Garcia.

Under the law, drug t
raffickers must go to any of the state revenue offices within 48 hours of coming into possession of illegal drugs. They pay a tax on the value of the illegal drugs and get a stamp to show they have paid.

The law uses the term “dealer” rather than “drug trafficker.” Only ‘dealers’ are required to purchase the drug tax stamp. Tennessee law defines a ‘dealer’ as anyone who has more than 42.5 grams, or more than one and one half ounces of marijuana (other amounts for other drugs).

Fools who think a dealer is someone who actually sells drugs will understandably not realize that this law applies to them. Obviously, people who do not sell drugs are people who do not make money from the sale of drugs, thus, they are people who do not owe the tax.

Other fools are all of us who believe that news reports about police busting drug dealers necessarily have anything to do with people who sell drugs.

Under the law, ‘dealers’ may purchase the tax stamps in person or by mail. The Dept. of Revenue has chosen to permit only the option of purchasing the tax stamps in person.

The law says “Dealers are not required to give their name, address, social security number, or other identifying information on the form.” (803-6-(a))

Yet the requisition form you are required to fill out when you do purchase the stamps, requests your name, your address, your social security number, your phone number, and your drivers' license number.

While the Dept. of Revenue website notes that this information is not required, nowhere on the form does it say ‘this information is not required.’

Instead, the requisition form instructs:

“Tax stamps may be purchased in person by completing this requisition form in the taxpayer services division . .”

Taxpayer privacy laws keep Department of Revenue officials from reporting these people to police agencies, state officials said.

Nothing in the drug tax stamp law prohibits the State from using information independently obtained by placing a law enforcement agent outside the location where drug stamps are sold.

Tennessee Drug Tax Law: . . .”information obtained pursuant to this act is confidential and, unless independently obtained, (emphasis added) may not be used in a criminal prosecution other than a prosecution for a violation of this act.” (803-9)

Nothing prevents law endorcement agents from following someone to the Dept. of Revenue, planting surveillance cameras outside the building, or standing outside the drug tax office and following alleged ‘drug traffickers.’

In such instances, why yes, payment of the tax may indeed lead to your arrest.

After drug arrests, local authorities are required to notify the state Department of Revenue within 48 hours. Drug-trafficking suspects who haven't obtained the stamps are then assessed the taxes and additional fines and interest.

Correction: After drug arrests, or police suspicion, or alleged police suspicion . . .

Those who can't make immediate payments can have their cars, homes and other personal property seized.

Taxed, but not convicted

After stopping Garcia on the night of April 6, police questioned him about whether he knew the man suspected of drug smuggling. Garcia, of Nashville, said he knew of the man, as he knew of many Springfield residents because of his frequent trips there.

Garcia denied any involvement in drug trafficking.

According to an arrest affidavit filed against John Jernigan, the motorist Garcia was suspected of following, a confidential informant told Springfield police that the suspect's vehicle would be followed by a second vehicle of an "unknown color, make and model."

Garcia and Jernigan were in different areas when police stopped them. Jernigan said last night that he did not wish to comment without his lawyer present.

The Department of Revenue has sent a notice of lien on Garcia's property while he appeals.
"(Garcia) wasn't in possession of anything," his lawyer said.

Springfield police said this week that they were investigating the case and had submitted reports to the Robertson County grand jury for possible indictment.

They said they had nothing to do with the decision to levy taxes against him. "We submit our paperwork to them, and then they determine who needs to be taxed," Springfield Police Lt. William Watkins said.

The bigger the alleged drug bust, the bigger the profit for the State (and the specific law enforcement agency involved, details further down). If police say they suspect you are a ‘dealer’ with 300 lbs of marijuana, the State profits far far greater than if police say they suspect you possess only a few grams of marijuana.

Even if the grand jury decides there is not enough evidence to indict a suspect, such as in Garcia's case, taxes can still be collected, state officials said.

Translation: Evidence or proof is irrelevant. Your property can be seized based solely on unsubstantiated allegations made by police.

"It's two completely separate issues," said Sam Chessor, an assistant commissioner for the Department of Revenue. "The tax is a civil matter, and the other is a criminal matter. They may very well possess the substance and owe the tax and yet be acquitted later in a criminal court."

You may very well not possess or deal the substance, yet be punished by the State via the robbery of your property before you have been arrested, before you have gone to trial, before you have been convicted. Seizing your property on the basis of allegations made by police is punishment for the alleged suspicion of criminal activity.

Difficult to prove tax isn't owed

To convict someone of a criminal charge, a judge or jury must find that the defendant is guilty beyond a reasonable doubt. But in a civil case, there exists a lower legal standard for finding someone liable, known as "a preponderance of evidence."

"When we go out and our auditors determine that a tax is owed, then it's on the taxpayer to show that the tax is not owed," Chessor said.

Chessor declined to discuss Garcia's case specifically, citing laws protecting the confidentiality of taxpayers.

Translation: Police State actions are confidential.

People who think they have been assessed the drug tax unfairly have 30 days to file an appeal to the Department of Revenue. Lawyers for the state tax department hear the appeals.

When the armed agents from the Dept. of Revenue come to your home to seize your property, they conveniently forget to mention that you have 30 days to appeal. They do not include this information on any of the paper work they leave behind.

"That's like the fox guarding the henhouse," said Herbert, Garcia's attorney. Garcia's meeting is scheduled later this month.

If the department denies his appeal, he can file a lawsuit against the Department of Revenue in Chancery Court.

Garcia has been paying for an attorney to handle his tax case. Some critics say that many people who are assessed the tax cannot afford to hire private lawyers.

"This law is tailor-made for governmental abuse," said Nashville criminal defense attorney Glenn Funk.

Funk has sued the Department of Revenue over the tax assessment on behalf of a number of clients.

One case making its way through the court system involves Harold Steven West of Nashville, who was arrested Feb. 28 on suspicion of drug possession. West, 52, has maintained his innocence and is scheduled to appear in court on the criminal charges in August.

But two weeks after his arrest, agents from the Department of Revenue went to West's home and demanded that he immediately pay $834 in drug taxes or his boat would be seized, according to the lawsuit filed in Davidson County Chancery Court.

In their response to the lawsuit, Department of Revenue lawyers confirmed that West "went to his bank accompanied by (a tax officer) and procured a cashier's check in order to pay the full amount of the assessment."

Drug tax could face more legal challenges

Tennessee's drug tax is modeled after a similar law in North Carolina. That state has collected more than $89 million in the 15 years since it was put on the books. The drug taxes are intended as a way to generate money that can be used to offset the cost of drug trafficking to law enforcement.

Tennessee’s Unauthorized Substance Tax law explicity states that its purpose is to generate revenue. Seventy-five percent of the funds seized go to the law enforcment agency responsible for tipping off the Dept. of Revenue.

The amount of the revenue generated depends entirely on the story law enforcement agents tell about the value of the drugs they claim you have. The more police exaggerate, miscalculate, and fabricate the value of drugs seized or not seized, the more the State and law enforcement agencies profit.

It's the old, the more the people lose, the more the State wins rule.

The other 25% goes to the State’s General Fund. Obviously, this law gives law enforcement agents a huge incentive for corruption.

In both states, the bulk of the taxes that are being collected have been levied after the drugs were seized, not before.

Translation: Your property is stolen after police say they suspect you are a dealer or after police say they seized drugs from you.

The controversial nature of drug tax laws has resulted in legal challenges throughout the country.

Very similar laws have been overturned in some states. In Wisconsin, the drug tax stamp law was found to be an unconstitutional violation of the 5th Amendment protection against self-incrimination.

In some states, the drug laws have become so watered down after the legal battles that they are seldom used, said Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws (NORML).

He acknowledged that North Carolina's law, the model Tennessee used, had withstood legal scrutiny. But he doesn't expect criminal defendants to accept the new law lying down.

"The Tennessee Supreme Court will absolutely, positively, be litigating a case having to do with these drug taxes," St. Pierre said.

The drug tax is an attempt to circumvent laws designed to protect people not yet convicted of crimes, said Funk, the Nashville defense lawyer.

"The burden is on the citizen to initiate the lawsuit and get their money back, and not everybody will be able to do that," he said. "There has to be in America some responsibility for the government to prove the citizen did something wrong before it punishes the citizen."

My thanks to Say Uncle for the Dept. of Revenue drug tax stamp Registration & Purchase requisition form.

Related Posts:
Police State Strikes in Tennessee
Nashville Bust 60 Year Old Cancer Victim for 303 Lbs Medical Marijuana

Is War on Drugs Becoming War on the Elderly?

More related stories:
Say Uncle
Drug War Rant

Talkleft has a story about the TN law before it went into effect.