91-1195 - Illegal Drug Stamp

BEFORE THE UTAH STATE TAX COMMISSION

_____________________________________

XXXXX, )

Petitioner, : ORDER

v. :

COLLECTION DIVISION OF THE : Appeal No. 91-1195

UTAH STATE TAX COMMISSION, : Account No. XXXXX

Respondent. :

_____________________________________

This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Alan Hennebold, Presiding Officer, heard the matter on behalf of the Commission. XXXXX appeared for Petitioner. XXXXX, Assistant Utah Attorney General, and XXXXX of the Collection Division's staff appeared for Respondent.

This appeal arises from Respondent's assessment of tax and penalty against Petitioner pursuant to Utah's Illegal Drug Stamp Tax Act. (Utah Code Ann. §59-19-1 et seq.) Respondent assessed tax and penalty of $$$$$ based upon Petitioner s alleged possession of XXXXX grams of methamphetamine oil. Respondent also assessed tax and penalty of $$$$$ based Up Petitioner's possession of XXXXX grams of marijuana.

In criminal proceedings arising from Petitioner's alleged possession of the foregoing illegal drugs, the federal district court found that the methamphetamine oil had been seized in violation of the Fourth Amendment to the United States Constitution. The court therefore suppressed evidence of the methamphetamine oil pursuant to the exlusionary rule. With respect to the marijuana, the court ruled its seizure was proper. However, the record does not indicate that Petitioner possessed, manufactured, shipped, transported or imported the marijuana.

The Utah Supreme Court has held that the exclusionary rule is applicable in Commission proceedings under the Illegal Drug Stamp Tax Act. (Sims v. Collection Division of the Utah State Tax Commission, No. 900324, filed October 22, 1992.)

In light of the Utah Supreme Court's decision in XXXXX, Respondent concedes that it lacks an evidentiary basis to support assessment of tax on Petitioner with respect to the methamphetamine oil. Additionally, Respondent concedes that insufficient evidence exists to demonstrate Petitioner was a "dealer" within the meaning of the Illegal Drug Stamp Tax Act with respect to the marijuana in question.

Based upon the foregoing and pursuant to the provisions of Utah's Illegal Drug Stamp Tax Act, the Commission abates the entire assessment of tax and penalty against Petitioner in this matter. It is so ordered.

DATED this 20 day of November, 1992.

BY ORDER OF THE UTAH STATE TAX COMMISSION.

R. H. Hansen Roger O. Tew

Chairman Commissioner

ABSENT

Joe B. Pacheco S. Blaine Willes

Commissioner Commissioner