1997 Regular Session
To: Judiciary A; Ways and Means
By: Representative McCoy
House Bill 619
AN ACT TO IMPOSE AND LEVY A TAX UPON MARIHUANA AND OTHER CONTROLLED SUBSTANCES THAT ARE POSSESSED, TRANSPORTED, TRANSFERRED, IMPORTED, DISTRIBUTED, SOLD OR OFFERED FOR SALE BY PERSONS WITHOUT LAWFUL AUTHORITY; TO PROVIDE THAT THE STATE TAX COMMISSION SHALL ADOPT A UNIFORM SYSTEM OF AFFIXING AND DISPLAYING OFFICIAL STAMPS, LABELS OR OTHER INDICIA FOR MARIHUANA AND CONTROLLED SUBSTANCES ON WHICH THE TAX IS IMPOSED AND SHALL ADOPT SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT AND ADMINISTRATION THEREOF; TO PRESCRIBE THE METHOD OF CALCULATING AND THE MANNER BY WHICH SUCH TAXES SHALL BE PAID; TO PRESCRIBE PENALTIES FOR PERSONS WHO FAIL TO PAY THE TAXES IMPOSED; TO PROHIBIT THE TAX COMMISSION AND PUBLIC EMPLOYEES FROM DISCLOSING THE IDENTITY OF PERSONS WHO PAY SUCH TAXES AND PURCHASE THE INDICIA; TO PROVIDE FOR THE DEPOSIT OF THE REVENUES COLLECTED FROM SUCH TAX INTO THE GENERAL FUND; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. It is declared to be the intent of this act to levy a tax upon illegal drugs in an effort to compensate for the lost revenue from a section of the economy that has not heretofore borne its fair share of the tax burden. This act is not intended to inculpate anyone or otherwise cause any individual to incriminate himself or herself in violation of that person's constitutional rights.
SECTION 2. As used in this act, the following words shall have the meanings herein ascribed, except where the context directly requires otherwise:
(a) "Commission" means the State Tax Commission.
(b) "Controlled substance" means any drug or substance, whether real or counterfeit, as defined in the Uniform Controlled Substances Law, that is held, possessed, transported, transferred, sold, distributed or offered to be sold without lawful authority. "Controlled substances," as used in this act, does not include marihuana.
(c) "Dealer" means a person, including an individual, firm, association, corporation, partnership or any other group or combination acting as a unit, who, without lawful authority, manufactures, produces, ships, sells, uses, distributes, transports or imports into Mississippi or in any manner acquires or possesses more than forty-two and one-half (42-1/2) grams of marihuana, or seven (7) or more grams of any controlled substance or ten (10) or more dosage units of any controlled substance which is not sold by weight. A quantity of marihuana or other controlled substance is measured by the weight of the substance whether pure or impure or dilute, or by dosage units when the substance is not sold by weight, in the dealer's possession. A quantity of a controlled substance is dilute if it consists of a detectable quantity of pure controlled substance and any excipients or fillers.
(d) "Dosage unit" means a tablet, capsule, vial or ampule of a controlled substance or, in cases of mass volume or diluted quantities, the proper dose or quantity of a controlled substance to be taken all at one (1) time or in fractional amounts within a given period, as defined and adopted by the United States Pharmacopeia.
(e) "Marihuana" shall have the same meaning as that term has whenever it is used in the Uniform Controlled Substances Law.
(f) "Possession" means actual possession, constructive possession, or a combination of both actual and constructive possession.
SECTION 3. The State Tax Commission shall administer the provisions of this act. Payments required by this act shall be made to the commission on the form provided by the commission. The commission shall collect all taxes under this act.
SECTION 4. The State Tax Commission may promulgate rules and regulations necessary to enforce and administer the revenue and taxation provisions of this act and shall adopt a uniform system of providing, affixing and displaying official stamps, official labels, or other official indicia for marihuana and controlled substances on which a tax is imposed.
SECTION 5. No dealer may possess, distribute, sell, transport, import, transfer or otherwise use any marihuana or controlled substance upon which a tax is imposed by Section 9 of this act unless the tax has been paid on the marihuana or other controlled substance as evidenced by a stamp or other official indicia.
SECTION 6. Nothing in this act shall in any manner provide immunity for a dealer from criminal prosecution pursuant to Mississippi law.
SECTION 7. Nothing in this act requires persons registered under Section 41-29-125, or otherwise lawfully in possession of marihuana or a controlled substance, to pay the tax required under this act.
SECTION 8. For the purpose of calculating the tax under Section 9 of this act, an amount of marihuana or other controlled substance is measured by the weight of the substance or by number of dosage units in the dealer's possession.
SECTION 9. A tax is hereby imposed on marihuana and controlled substances as defined in Section 2 of this act at the following rates:
(a) On each gram of marihuana, or each portion of a gram, Three Dollars and Fifty Cents ($3.50); and
(b) On each gram of controlled substance, or portion of a gram, Two Hundred Dollars ($200.00); or
(c) On each ten (10) dosage units of a controlled substance, or portion thereof, that is not sold by weight, Four Hundred Dollars ($400.00).
SECTION 10. Any dealer violating this act is subject to a penalty of one hundred percent (100%) of the tax in addition to the tax imposed by Section 9 of this act. In addition to the tax and penalty imposed, a dealer failing to affix the appropriate stamps, labels or other indicia is guilty of a felony, and, upon conviction, may be punished by a fine of not more than Five Thousand Dollars ($5,000.00), or by imprisonment for a term of not more than ten (10) years, or by both such fine and imprisonment. Such penalty shall be cumulative to any other penalty or crime.
SECTION 11. Official stamps, labels, or other indicia to be affixed to all marihuana or controlled substances shall be purchased from the State Tax Commission. The purchaser shall pay one hundred percent (100%) of face value for each stamp, label or other indicia at the time of the purchase. The commission shall make the stamps, labels or other indicia in denominations as provided by the commission by regulation. No stamp, label or other indicia issued by the State Tax Commission under the provisions of this act shall be valid after a period of three (3) months from the time of purchase. A purchaser shall not be required to provide his name or address when purchasing the stamps, labels or other indicia and the commission shall not accept from the purchaser a personal check or other negotiable instrument which identifies the purchaser.
SECTION 12. (1) When a dealer purchases, acquires, transports or imports into this state marihuana or controlled substances on which a tax is imposed by Section 9 of this act, and if the indicia evidencing the payment of the tax have not already been affixed, the dealer shall have them permanently affixed on the marihuana or controlled substance immediately after receiving the substance. Each stamp or other official indicia may be used only once.
(2) Taxes imposed upon marihuana or controlled substances by this act are due and payable immediately upon acquisition or possession in this state by a dealer.
SECTION 13. (1) An assessment for a dealer not possessing stamps or other official indicia showing that the tax has been paid shall be considered a jeopardy assessment or collection. The commission shall assess a tax based on personal knowledge or information available to the commission, mail to the taxpayer at the taxpayer's last known address or serve in person, a written notice of the amount of tax; demand its immediate payment; and, if payment is not immediately made, the commission may immediately file with the circuit clerk of the county in which the taxpayer resides or owns property a notice of tax lien for taxes due and issue a jeopardy warrant under official seal directed to the sheriff of any county of this state or to a special agent of the Tax Commission. Immediately upon receipt of the notice of tax lien, the circuit clerk shall enter the notice of tax lien as a judgment upon the judgment roll and show in the appropriate columns the name of the taxpayer as judgment debtor, the State Tax Commission as the judgment creditor, the amount of the taxes and the date and time of enrollment. When thus enrolled such debt shall be equivalent of any enrolled judgment of a court of record, and shall constitute a lien on all property and rights to property of the judgment debtor. The sheriff, or the special agent, as the case may be, upon receipt of the jeopardy warrant, shall immediately proceed in accordance with subsection (2) of this section. However, where property has been seized under authority of a jeopardy warrant, the taxpayer may file a petition for a hearing and revision of the assessment with the commission at any time before the date of the sale provided such taxpayer executes a supersedeas surety bond with a surety company authorized to do business and doing business in this state for double the amount of the assessment. Such bond shall be conditioned that any taxes, damages, interest and costs adjudged to be due after the hearing will be paid promptly upon order of the State Tax Commission.
(2) The sheriff or special agent of the Tax Commission, upon receipt of a warrant or a jeopardy warrant, shall immediately seize any property of the taxpayer named in the warrant, in all respects, with like effect, and in the manner prescribed by law with respect to executions of judgments, and he shall execute such warrant and return it to the State Tax Commission, and pay to the commission the money collected by virtue thereof by the date specified therein, but not to exceed sixty (60) days.
The sheriff or special agent shall be entitled to the fees for his services in the same amount, and to be collected in like manner, as provided by Section 25-7-19, for like services under a writ of execution. However, the minimum total of all such fees shall be Ten Dollars ($10.00). All such fees collected by a special agent of the Tax Commission shall be paid to the Tax Commission and deposited in a fund to be expended by the commission to help defray the costs of carrying out the provisions of this act. When a warrant issued to a sheriff shall be withdrawn by the commission before its expiration date, the commission is authorized to pay to the sheriff the fees allowed by law for services actually performed and costs actually incurred, out of money collected as fees from the taxpayer, or from funds appropriated for the operation of the Tax Commission.
Real property shall be disposed of according to Section 13-3-163, and personal property shall be disposed of according to Section 13-3-165. However, perishable personal property may be disposed of as provided by Section 13-3-167.
(3) No person may bring suit to enjoin the assessment or collection of any taxes, interest or penalties imposed by this act except law enforcement officials when acting for the purpose of carrying out Section 14(4) of this act.
(4) The tax and penalties assessed by the commission are presumed to be valid and correctly determined and assessed. The burden is upon the taxpayer to show their incorrectness or invalidity. Any statement or assessment filed by the commission with any court, or any other certificate by the commission of the amount of tax and penalties determined or assessed is admissible in evidence and is prima facie evidence of the facts it contains.
(5) Nothing in this section shall be construed to authorize any act or procedure which would deny a person of any constitutional rights to due process of law.
SECTION 14. (1) Notwithstanding any law to the contrary, neither the commission nor a public employee may reveal facts contained in a report or return required by this act, nor shall any information contained in such a report or return be used against the dealer in any criminal proceeding, except in connection with a proceeding involving taxes due under this act, unless such information is independently obtained.
(2) Any person violating this section shall be guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not more than One Thousand Dollars ($1,000.00), or imprisonment for not more than six (6) months, or by both such fine and imprisonment.
(3) This section shall neither prohibit the commission from publishing statistics that do not disclose the identity of dealers or the contents of particular returns or reports, nor prohibit law enforcement officers or other public officials from providing information to the State Tax Commission concerning persons arrested, indicted or charged with a violation of criminal laws relating to marihuana or controlled substances.
(4) Notwithstanding any provision of this act or any other provision of law, collection of any taxes under this act or imposition of any tax liens arising as a result of this act, shall not interfere with any forfeiture and condemnation of money or any other type or kind of property whatsoever under the drug forfeiture laws of this state, or with any distribution of property or funds under the drug forfeiture laws of this state. Regardless of the order in which proceedings are begun, condemnation and forfeiture of money or any other type or kind of property whatsoever and distribution of property and funds under the drug forfeiture laws of this state shall always take precedence over any proceedings to collect taxes under this act. However, immediately following the arrest, indictment or charge of any person under the criminal laws of this state for an offense of manufacturing, producing, shipping, selling, using, distributing, transporting or importing into Mississippi, or in any manner acquiring or possessing, more than forty-two and one-half (42-1/2) grams of marihuana, or seven (7) or more grams of any controlled substances, or ten (10) or more dosage units of any controlled substance which is not sold by weight, the law enforcement agency or prosecuting attorney shall notify the State Tax Commission of such arrest, indictment or charge and shall provide such information as may be necessary to assist the commission in performing its duties under this act.
SECTION 15. For the purpose of determining the correctness of any return, determining the amount of tax that should have been paid, determining whether or not the dealer should have made a return or paid taxes, or collecting any taxes under this act, the commission may examine, or cause to be examined, any books, papers, records, accounts or memoranda that may be relevant to making such determinations, whether the books, papers, records, accounts or memoranda are the property of or in the possession of the dealer or another person. The commission may require the attendance of any person having knowledge or information that may be relevant, compel the production of books, papers, records, accounts or memoranda by persons required to attend, take testimony on matters material to the determination, and administer oaths or affirmations. The commission may issue subpoenas which may be served by authorized agents of the commission to compel the attendance of witnesses or the production of documents, books, papers, records, bank records, accounts and any other writing or memoranda.
SECTION 16. All taxes or other funds received or collected by the State Tax Commission under the provisions of this act remaining after the payment of the expenses of administration and enforcement of this act shall be deposited into the State Treasury to the credit of the General Fund.
SECTION 17. If any section, paragraph, sentence, clause, phrase or any part of this act is declared to be unconstitutional or void, or if for any reason is declared to be invalid or of no effect, the remaining sections, paragraphs, sentences, clauses, phrases and parts thereof shall be in no manner affected thereby but shall remain in full force and effect.
SECTION 18. This act shall take effect and be in force from and after July 1, 1997.