BEFORE THE UTAH STATE TAX
COMMISSION
___________________________________
XXXXX, )
:
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
:
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. 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
Chairman Commissioner
Joe B.
Pacheco S.
Blaine Willes
Commissioner Commissioner