BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
COLLECTION DIVISION OF THE ) Appeal No. 92-0308
UTAH STATE TAX COMMISSION, :
) Account No. XXXXX
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. XXXXX appeared on her own behalf. XXXXX, Assistant Utah Attorney General, represented Respondent.
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 through XXXXX XXXXX.
3. During the period in question, Petitioner lived in XXXXX, Utah with her husband, XXXXX. XXXXX, Petitioner's ex-husband, also temporarily resided in the XXXXX home.
4. On XXXXX, at XXXXX request, Petitioner drove him to a rest stop in Utah County to meet two other individuals. At the rest area, XXXXX left Petitioner's car and sold 5 grams of cocaine to the two individuals, an undercover police officer and a confidential police informant.
5. Petitioner contends she was unaware of the purpose of the XXXXX trip to Utah County, or that XXXXX possessed cocaine.
6. On XXXXX, Petitioner again drove XXXXX to Utah County, where he met with the same individuals at the same rest stop and sold them 5.8 grams of cocaine. Petitioner contends it was during this second trip to Utah County that she suspected XXXXX was selling drugs.
7. On XXXXX, Petitioner again drove XXXXX to Utah County where he sold 26.5 grams of cocaine to the same individuals.
8. On XXXXX, XXXXX asked Petitioner to deliver cocaine to Utah County by herself. Her husband, XXXXX went with her. They delivered 27.9 grams of cocaine at the rest stop in Utah County, according to the practice of previous occasions and to the same individuals.
9. After the XXXXX transaction, Petitioner and her husband decided not to participate in future drug sales. However, after several telephone calls, Petitioner and her husband agreed to meet with the same individuals in Utah County. Neither Petitioner nor her husband had any controlled substances with them on their December trip to Utah County.
10. Upon arriving at the designated meeting place, Petitioner and her husband were arrested. Petitioner was charged with four counts of distribution of a controlled substance and two counts of criminal violation of the Illegal Drug Stamp Tax Act. Her husband was charged with one count of distribution of a controlled substance and one count of criminal violation of the Illegal Drug Stamp Tax Act.
11. Petitioner subsequently pled guilty to two counts of distribution of a controlled substance and a misdemeanor charge of possession of drug paraphernalia.
CONCLUSIONS OF LAW
The Utah Illegal Drug Stamp Tax Act imposes a tax of $200 per gram on controlled substances, including cocaine. (Utah Code Ann. §59-19-102(1).)
A dealer may not possess any controlled substance upon which a tax is imposed by Title 59, Chapter 19, of the Utah Code unless the tax has been paid on the controlled substance 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 (among other substances) seven or more grams of cocaine. (Utah Code Ann. §59-19-102.(2).)
Any dealer violating the provisions of the Illegal Drug Stamp Tax Act is subject to a penalty of 100% of the tax, in addition to the tax itself. (Utah Code Ann. §59-19-106.)
DECISION AND ORDER
Petitioner concedes that the substance involved in this matter was cocaine and that no tax was paid. However, the evidence presented in this matter raises two questions regarding Petitioner's status as a "dealer" under the Act. First, did Petitioner "manufacture, produce, ship, transport, import, acquire or possess" the cocaine in question. Second, can Petitioner's transportation or possession of 5 and 5.8 grams of cocaine on XXXXX and XXXXX be added together to reach the 7 gram threshold included in the Act's definition of "dealer".
With respect to the first issue, Petitioner testified she did not know the purpose of the XXXXX trip was to deliver cocaine, and that she only suspected such a purpose for the second trip. However, even according to her own testimony, she had no other purpose for driving XXXXX to Utah County. The meetings took place at a rest stop. Even after Petitioner acknowledges she knew that cocaine was being delivered, she continued to participate. Finally, Petitioner's testimony in general indicates a familiarity with the drug trade and participants in that trade. Based on the foregoing, and viewing Petitioner's testimony as a whole, the Commission finds that Petitioner knew the purpose of all her trips to Utah County. While Petitioner may not have had actual possession of the cocaine, the Illegal Drug Stamp Tax Act applies not only to possession, but also to transportation of illegal drugs.
The second question is whether Petitioner meets the Act's definition of "dealer". The Act provides that only a "dealer" is subject to the illegal drug stamp tax, and that in order to be a "dealer" of cocaine, one must possess at least 7 grams of the substance. Standing alone, Petitioner's XXXXX and XXXXX transactions fail to meet the 7 gram threshold. However, Respondent argues the cocaine involved in the two transactions can be added together because both transactions were part of a common scheme or plan to sell cocaine.
Tax statutes are construed strictly, and in favor of the taxpayer where doubtful. (Pacific Intermountain Express Co. v. State Tax Commission, 8 Utah 2d 144, 146; 617 P.2d 397 (1958).) The Illegal Drug Stamp Tax Act is silent on the question of whether status as a "dealer" can result from the accumulation of several drug transactions. However, when several events are so connected in time, purpose and participants as to constitute one transaction, the Commission concludes that such transactions can be viewed as a single transaction for purposes of the Illegal Drug Stamp Tax Act.
Such is the case here. The XXXXX, XXXXX, XXXXX and XXXXX events involved the same locations, the same supply sources, the same participants and took place within a short time. The Commission finds that the four events were not four separate, discrete transactions, but were instead one ongoing transaction.
Under the facts of this case, the Commission concludes that the cocaine involved in the four incidents in question may be added together for purposes of the Act's definition of "dealer". That being the case, and Petitioner having raised no other issues, the Commission affirms Respondent's assessment of illegal drug stamp tax and penalty. It is so ordered.
DATED this 3rd day of February, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes