BEFORE THE UTAH STATE TAX
COMMISSION
_____________________________
XXXXX :
Petitioner : FINDINGS OF FACT,
: CONCLUSIONS
OF LAW,
v. : AND FINAL DECISION
:
COLLECTION
DIVISION OF THE : Appeal No. 91-0977
UTAH STATE TAX COMMISSION, :
: Account
No. XXXXX
Respondent :
_____________________________
STATEMENT OF CASE
This
matter came before the Utah State Tax Commission for a formal hearing on
XXXXX. Alan Hennebold, Presiding
Officer, heard the matter for and on behalf of the Commission. Present and representing the Petitioner was
XXXXX. Present and representing the
Respondent was XXXXX, Assistant Utah Attorney General.
Based
upon the evidence and testimony presented at the hearing, the Tax Commission
hereby makes its:
FINDINGS OF FACT
1. The tax in question is illegal drug stamp
tax.
2. The period in question is XXXXX.
3. On XXXXX, Petitioner was arrested in XXXXX
Utah by officers of the XXXXX.
4. At the time of his arrest, Petitioner was
found in possession of XXXXX grams of cocaine.
5. Petitioner was subsequently indicted on
federal charges relating to possession of cocaine. He moved to suppress evidence of the cocaine seized at the time
of his arrest on the grounds such evidence resulted from an unlawful search and
seizure. Petitioner's motion to
suppress was denied, and he was convicted in U.S. District Court of possession
of cocaine with intent to distribute.
6. The drug stamps required by the Utah Illegal
Drug Stamp Tax Act (Utah Code Ann. §59-19-1 et seq.) were not affixed to the
cocaine in Petitioner's possession on XXXXX, nor had any drug stamps been
purchased with respect to that cocaine.
7. On XXXXX, Respondent assessed Petitioner
with illegal drug stamp tax of XXXXX plus penalty in the same amount. Petitioner received written notice of the
foregoing assessment on approximately XXXXX. Through his attorney, Petitioner
filed a timely appeal of the assessment.
CONCLUSIONS OF LAW
A
tax of $200 per gram of cocaine is imposed pursuant to the Illegal Drug Stamp
Tax Act. (Utah Code Ann.59-19-103.)
A
dealer may not possess any marijuana or controlled substance upon which a tax is
imposed by the Illegal Drug Stamp Act unless the applicable tax has been paid,
as evidenced by a stamp or other official indicia. (Utah Code Ann. 59-19-1004(2).)
"Dealer" means a person who, in violation of Utah law,
manufactures, produces, ships, transports, or
imports into Utah or in any manner acquires or possesses more than 42 1/2 grams
of marijuana, or seven or more grams of any controlled substance. (Utah Code Ann. §59-19-102(2).)
Failure
to affix the stamp required by the Illegal Drug Stamp Act shall result in the
assessment of the tax due plus a 100% civil penalty. (Utah Code Ann. §59-19-106.)
DECISION AND ORDER
Under
Utah's Illegal Drug Stamp Tax Act, dealers in possession of a controlled substance
must purchase and affix drug tax stamps to the controlled substance. Failure to do so renders the dealer liable
for the amount of the tax plus a penalty in an amount equal to the tax. In this case, Petitioner has been assessed
drug stamp tax and penalty totalling $$$$$ arising from his possession of XXXXX
grams of cocaine.
Petitioner
challenges the assessment on three points: First, that the cocaine upon which
the assessment is based is the fruit of an unlawful search and seizure, and
therefore cannot be used as evidence against him. Second, that assessment of the tax violates Petitioner's right to
due process because the assessment was made without adequate notice and
hearing. Finally, Petitioner contends
he is not a 'dealer" within the meaning of the Illegal Drug Stamp Tax
Act. Each of Petitioner's arguments
will be discussed below, in the order of their presentation.
Petitioner
contends that the evidence of his possession of cocaine results from an
unlawful search and seizure and should be excluded from consideration by the
Commission. In other similar cases, the
Commission has ruled as follows:
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 (other courts). 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.
After
review of the parties' arguments in this case, the Commission reaffirms its
conclusion that the exclusionary rule is inapplicable in these proceedings.
Even
if the Commission were to find that the exclusionary rule is applicable in this
proceeding, the Petitioner has previously litigated the search and seizure
issue in federal district court. That
court held that the officers' search of Petitioner and seizure of the cocaine
were lawful. The Petitioner is bound by
that determination in this proceeding as well, under principles of collateral
estoppel. Finally, if the exclusionary
rule were applicable in this proceeding and the search and seizure issue had
not been decided in federal court, the Commission would conclude on the merits
of the issue that the search and seizure was valid and that evidence so
obtained was admissible.
Petitioner
next argues that his right to due process was violated by lack of notice and
opportunity for hearing prior to the assessment of tax and penalty in this
matter. However, the Commission is not
authorized to rule upon such constitutional claims. Shea et al. v. State Tax Commission, 120
P.2d 274 (Utah 1941); State Tax Commission v. Wright, 596 P.2d 634, 636
(Utah 1979). As Respondent complied
with the provisions of the Illegal Drug Stamp Tax Act in assessing tax and
penalty against Petitioner, the Commission must assume the constitutional
validity of the assessment.
Finally,
Petitioner argues he is not a "dealer" and therefore not subject to
the Illegal Drug Stamp Tax Act.
However, §59-19-102(2) of the Act defines "dealer" as: ...a
person who, in violation of Utah law, manufactures, produces, ships,
transports, or imports into Utah or in any manner acquires or
possesses more than 42 1/2 grams of
marijuana, or seven or more grams of any controlled substance, or ten or more
dosage units of any controlled substance which is not sold by weight. (emphasis
added)
As
the Petitioner possessed more than seven grams of cocaine, he falls within the
Act's definition of dealer and is subject to the Act.
In
summary, the Commission concludes that Petitioner possessed XXXXX grams of
cocaine on XXXXX without having purchased or affixed the drug stamps required
by Utah's Illegal Drug Stamp Tax Act.
The Commission therefore affirms Respondent's assessment of tax of $$$$$
and penalty in an equal amount, for a total assessment against Petitioner of
$$$$$. It is so ordered.
DATED
this 17th day of March, 1992.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger
O. Tew
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner