Crack tax
Encyclopedia
The "crack tax" is a name given to the taxes on illegal drugs in Tennessee. The tax, under a law passed by the Tennessee General Assembly
in January 2005, is applied to illegal substances including cocaine, marijuana, and moonshine. Drug dealers are required to pay anonymously at the state revenue office, where they receive a stamp to prove their payment. If a drug dealer is arrested without having a stamp, the state would seek the money owed it. 22 other states have drug collection laws similar to the crack tax in Tennessee; the law was based upon that of North Carolina's.
Steven Waters sought to challenge the statute after Tennessee Department of Revenue
agents decided to seize his home in a drug sting operation. A county court found the law unconstitutional because it violated the drug dealer's Fifth Amendment
right to protection from self-incrimination. The Tennessee Court of Appeals
upheld the lower court's decision, unanimously declaring the law to be "arbitrary, capricious and unreasonable, and therefore invalid under the constitution of this state." The opinion was written by Judge Sharon G. Lee.
Governor Phil Bredesen
stated on September 14, 2007 that the crack tax should be ended, though State Revenue Commissioner Reagan Farr has said that the state will continue to enforce the tax. A meeting was planned by officials with the state attorney general to determine whether to appeal to the Tennessee Supreme Court
. Since 2005, Tennessee had collected more than $6 million from the crack tax, much of which came from confiscated property. In 2006 alone, the state collected $1.8 million.
In 2009 the Tennessee supreme court judged in a 3-2 ruling that the Crack Tax is unconstitutional, and repealed it.
Tennessee General Assembly
The Tennessee General Assembly is the state legislature of the U.S. state of Tennessee.-Constitutional structure:According to the Tennessee State Constitution of 1870, the General Assembly is a bicameral legislature and consists of a Senate of thirty-three members and a House of Representatives of...
in January 2005, is applied to illegal substances including cocaine, marijuana, and moonshine. Drug dealers are required to pay anonymously at the state revenue office, where they receive a stamp to prove their payment. If a drug dealer is arrested without having a stamp, the state would seek the money owed it. 22 other states have drug collection laws similar to the crack tax in Tennessee; the law was based upon that of North Carolina's.
Steven Waters sought to challenge the statute after Tennessee Department of Revenue
Tennessee Department of Revenue
The Tennessee Department of Revenue is an agency within the Tennessee state government of about 1600 people which is responsible for the "administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated...
agents decided to seize his home in a drug sting operation. A county court found the law unconstitutional because it violated the drug dealer's Fifth Amendment
Fifth Amendment to the United States Constitution
The Fifth Amendment to the United States Constitution, which is part of the Bill of Rights, protects against abuse of government authority in a legal procedure. Its guarantees stem from English common law which traces back to the Magna Carta in 1215...
right to protection from self-incrimination. The Tennessee Court of Appeals
Tennessee Court of Appeals
The Tennessee Court of Appeals was created in 1925 by the Tennessee General Assembly as an intermediate appellate court to hear appeals in civil cases from the Tennessee state trial courts....
upheld the lower court's decision, unanimously declaring the law to be "arbitrary, capricious and unreasonable, and therefore invalid under the constitution of this state." The opinion was written by Judge Sharon G. Lee.
Governor Phil Bredesen
Phil Bredesen
Philip Norman "Phil" Bredesen Jr. was the 48th Governor of Tennessee, serving from 2003 to 2011. A member of the Democratic Party, he was first elected Governor in 2002, and was re-elected in 2006. He previously served as the fourth mayor of Nashville and Davidson County from 1991 to...
stated on September 14, 2007 that the crack tax should be ended, though State Revenue Commissioner Reagan Farr has said that the state will continue to enforce the tax. A meeting was planned by officials with the state attorney general to determine whether to appeal to the Tennessee Supreme Court
Tennessee Supreme Court
The Tennessee Supreme Court is the state supreme court of the state of Tennessee. Cornelia Clark is the current Chief Justice.Unlike other states, in which the state attorney general is directly elected or appointed by the governor or state legislature, the Tennessee Supreme Court appoints the...
. Since 2005, Tennessee had collected more than $6 million from the crack tax, much of which came from confiscated property. In 2006 alone, the state collected $1.8 million.
In 2009 the Tennessee supreme court judged in a 3-2 ruling that the Crack Tax is unconstitutional, and repealed it.