BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________________
XXXXX
Petitioner, : FINDINGS OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL
DECISION
COLLECTION
DIVISION OF THE :
UTAH STATE TAX COMMISSION, : Appeal
No. 88-2547
Respondent. :
_____________________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Paul F. Iwasaki, Presiding
Officer, heard the matter for and in behalf of the Commission. Present and representing the Petitioner was
XXXXX, Attorney at Law. Present and representing
the Respondent was XXXXX, Assistant Attorney General.
Based
upon the memoranda submitted and oral arguments of the parties, the Tax
Commission hereby makes its:
FINDINGS OF FACT
1. The tax in question is the illegal drug
stamp tax.
2. The date in question is XXXXX.
3. As a result of a search conducted of the
motor vehicle driven by the Petitioner, members of the XXXXX County Sheriff's
Office and XXXXX seized XXXXX grams of marijuana and XXXXX grams of cocaine.
4. No drug stamps were affixed to the
controlled substances.
5. A tax deficiency in the amount of $$$$$ and
a penalty in an equal amount were assessed for the failure to have the required
drug stamps affixed to the controlled substances.
6. As a result of criminal charges arising out
of the possession of the controlled substances, the District Court ruled that
the search of the Petitioner's vehicle was lawful.
7. Individuals who purchase the drug stamps are
not required to identify themselves by name, social security number, nor
address when purchasing the stamps.
8. No evidence was presented which would
indicate that the information obtained from the individuals purchasing the drug
stamps is provided to law enforcement agencies.
CONCLUSIONS OF LAW
A
tax of $$$$$ per gram of marijuana and a tax upon cocaine at $$$$$ per gram is
imposed pursuant to the Illegal Drug Stamp Tax Act. (Utah Code Ann.
§59-19-103.)
The
evidence of tax paid is a stamp affixed to the controlled substance. (Utah Code Ann. §59-19-104.)
Failure
to affix the stamp shall result in the assessment of a tax plus a 100% civil
penalty. (Utah Code Ann. §59-19-106.)
The
Tax Commission is not a judicial body established under the Constitution of the
State of Utah, nor is it empowered nor authorized to determine the legality or
constitutionality of legislative enactments. (Shay v. Utah State Tax
Commission, 120 P.2d 274 (Utah 1941); State Tax Commission v. Wriqht,
596 P.2d 634 (Utah 1979); and Belco Petroleum Corporation v. State Board of
Equalization, 587 P.2d 204 (Wyoming 1978).
DECISION AND ORDER
The
Petitioner has presented four issues to be decided by the Commission:
1.
Does the Illegal Drug Stamp Tax Act violate the Petitioner's right
against self-incrimination?
2. Does
the Exclusionary Rule apply in proceedings before the Tax Commission?
3.
Does the assessment of taxes under the Act violate the Petitioner's
right to procedural due process under the Fourteenth Amendment of the United
States Constitution and Article I, Section 7 of the Utah Constitution?
4. Is
the Act void because it is impermissibly vague under the due process clause of
the Fourteenth Amendment of the United States Constitution and Article I,
Section 7 of the Utah Constitution?
Taking
the above listed issues in reverse order, the Tax Commission finds that with
respect to issue numbers 3 and 4, the Tax Commission is not a court of law
empowered to determine the constitutionality of the statute. Therefore, the Tax
Commission must assume the constitutional validity of the Illegal Drug Stamp
Tax Act.
With
respect to the first issue, the Utah Court of Appeals in the case of State
of Utah v. Davis, (case number 89-0009-CA, Court of Appeals, February 17,
1990) directly addressed the issue of whether the Act violated a person's right
against self-incrimination. The Court
of Appeals held that it did not.
The
Court found that by construing the Act to prohibit the use of any information
gained as a result of a purchaser's compliance with the Act to establish a link
in the chain of evidence in a subsequent drug prosecution provides the same
protections provided by the Fifth Amendment, thus upholding the Acts
constitutionality. In the present case,
there was no showing that any information obtained by the Tax Commission
regarding the purchase of the drug stamps was provided to law enforcement
agencies or became a link in the chain of evidence in subsequent criminal
proceedings.
The
remaining issue, the applicability of the Exclusionary Rule to proceedings before
the Tax Commission, is one of first impression.
In
holding that the Exclusionary Rule does not apply in proceedings before this
body, the Tax Commission adopts the balancing test set forth by the U. S.
Supreme Court in the cases of United States v. Janis, 428 U.S. 433
(1976) and INS v. Lopez-Mendoza, 468 U.S. 1032 (1984). That test requires the weighing of the
benefits in deterring unlawful police conduct against the loss of probative
evidence and the secondary costs that flow from the less accurate adjudication
that therefore occurs.
The
primary purpose of the Exclusionary Rule is to deter unlawful police
conduct. There is no showing that
application of the Exclusionary Rule in Tax Commission proceedings would serve
to meet that purpose. Additionally, if
the Tax Commission were to apply the Exclusionary Rule in its proceedings,
inconsistent results could be found between those hearings and criminal
proceedings in the District Court.
Therefore, the societal interest in deterring police conduct in these
cases does not outweigh the societal interests in facilitating the accuracy of
the fact finding process in these hearings.
Based
upon the foregoing, the Tax Commission finds that the determination of the
Collection Division's assessment against the Petitioner for tax and penalties
per the Illegal Drug Stamp Tax Act is affirmed. It is so ordered.
DATED
this 20 day of June, 1990.
B Y ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco G.
Blaine Davis
Commissioner Commissioner