Marijuana Policy Project

BOWLING GREEN, Ky.—A bill before the General Assembly would require drug dealers to purchase tax stamps and require buyers to pay taxes on the illegal drugs they purchase or face tax evasion charges.

The measure would require drug dealers to buy a tax identification number from the Kentucky Department of Revenue, which is barred by law from sharing the information with law enforcement.

The state would be able to seize property during drug arrests of the person had not paid taxes under the measure.

The bill would allow the law enforcement agency making the arrest to receive 70 percent of the money with local prosecutors getting 7.5 percent and the rest would go toward the administrative costs of the program.

At least one drug task force is behind the measure, hoping it can raise money to support law enforcement.

"We're in a period where federal funding is drying up and this bill could help support drug task forces and all law enforcement agencies," said Tommy Loving, director of the Bowling Green-Warren County Drug Task Force.

State Rep. Stephen Nunn, R-Glasgow, one of the sponsors of House Bill 685, said the bill is designed to put teeth in the current law that requires people to pay tax on illegal substances.

Nunn said Tennessee has a similar measure and has "pretty good success" with it.

"This bill has a lot of potential," Nunn said.

Tennessee brought in $1.7 million in its first year of collections, of which 75 percent went back to local law enforcement agencies, said Emily Richard, spokeswoman for the Tennessee Department of Revenue.

"It's been beyond our expectations," Richard said.

Drug dealers currently don't purchase the tax stamps, Loving said. The bill would make them subject to tax evasion penalties, he said.

State law currently allows only the seizure of property used in the commission of a crime. The legislation change that, allowing prosecutors to seize any property to pay off the tax debt.

Law enforcement officers will be asking for tax stamps on illicit drugs when they make an arrest, Loving said.

"You can bet drug dealers don't pay tax on what they earn," Loving said.

Loving said money collected from tax stamps or seizures would not initially provide all money for task forces, but it could supplement other funds.

"We don't anticipate seeing any impact of the bill until at least a year after it passes," he said. "It's not a cure-all."

Jim Devasher, director of the South Central Kentucky Drug Task Force, said a tax would eventually pay for the task forces that make the majority of drug arrests.

Under the bill, the tax would not be enforceable unless law enforcement finds more than five grams of an illegal substance or an entire marijuana plant. Because of the size requirements, most arrests will not be subject to the law, Devasher said.

"We do make a lot of controlled buys of crack, but most aren't large enough," he said. "Five grams of crack is a lot of crack."

The bill would provide incentive for task forces to take on more large-scale drug traffickers and operators, said Chris Cohron, Warren County Commonwealth's Attorney. It also hands down an enhanced penalty for drug dealers beyond their prison sentence, Cohron said.

"It lets them pay for their own arrests," he said.