BEFORE THE UTAH STATE TAX COMMISSION
: FINDINGS OF FACT,
v. : CONCLUSIONS OF LAW
: AND FINAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 92-0989
UTAH STATE TAX COMMISSION, :
: Tax Type: Drug Stamp
STATEMENT OF CASE
This matter came before the Utah State Tax Commission for a formal hearing on XXXXX. Alan Hennebold, Administrative Law Judge, heard the matter on behalf of the Commission. XXXXX, attorney at law, appeared for Petitioner. XXXXX, Assistant Utah Attorney General, appeared for Respondent.
Based upon the evidence presented at the hearing, the Commission makes the following:
FINDINGS OF FACT
1. The tax in question is illegal drug stamp tax.
2. The period in question is XXXXX.
3. On XXXXX, a search warrant was issued by the XXXXX Court, XXXXX County, State of Utah authorizing the day or night search of Petitioner's residence in XXXXX, Utah. The warrant was issued pursuant to a probable cause affidavit submitted by a local police officer and advising the issuing court "(t)hat on XXXXX at XXXXX hours, the affiant witnessed the informant enter the suspect's dwelling and could smell XXXXX."
4. The search warrant was executed on XXXXX during nighttime hours.
5. In executing the warrant, law enforcement officers discovered the XXXXX which is the subject of the tax assessment in this matter. The XXXXX was found in Petitioner's clothing and in his bedroom.
6. Criminal charges relating to possession of XXXXX were filed against Petitioner. Petitioner entered into a diversion agreement whereby the criminal charges would be dismissed if he complied with the conditions of the agreement.
7. No drug stamps were purchased with respect to the XXXXX at issue in this matter.
CONCLUSIONS OF LAW
The Utah Illegal Drug Stamp Tax Act imposes a tax of
$$$$$ per gram on XXXXX. (Utah Code Ann. §59-19-102(1).)
A dealer may not possess any XXXXX upon which a tax is imposed by Title 59, Chapter 19, of the Utah Code unless the 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 XXXXX grams of XXXXX. (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 XXXXX% of the tax, in addition to the tax itself. (Utah Code Ann. §59-19-106.)
Evidence seized in violation of constitutional prohibitions against unreasonable searches and seizures is inadmissible in proceedings before the Utah State Tax Commission pursuant to Utah's Illegal Drug Stamp Tax Act. (Sims v. Collection Division, Utah State Tax Commission, No 900324, Filed October 22, 1992)
Search warrants which permit nighttime searches must be based upon affidavits or oral testimony that constitute a particularized showing either that 1) a search is required in the night because the property is on the verge of being concealed, destroyed, damaged or altered; or 2) other good reason. (State of Utah v. Rowe, 806 P.2d 730, 733 (Utah App. 1991).)
DECISION AND ORDER
Petitioner concedes that the substance upon which the assessment is based in this matter was XXXXX and that the tax imposed by the Illegal Drug Stamp Tax Act upon XXXXX was not paid. However, Petitioner argues that evidence of his possession of XXXXX was obtained pursuant to a defective search warrant. Petitioner asks the Commission to review the basis upon which the warrant was issued, determine it to be defective, and exclude from these proceedings any evidence resulting from the defective search warrant.
The Utah Supreme Court has ruled that appeals of tax assessments under the Illegal Drug Stamp Tax Act are "quasi-criminal" in nature and that the exclusionary rule applies in such proceedings to prevent the use of unlawfully seized evidence. (Sims v. Collection Division of the Utah State Tax Commission, No. 900324, Filed October 22, 1992; Zissi v. Collection Division of the Utah State Tax Commission, No. 890317, Filed October 27, 1992.) It is implicit in the Court's Sims and Zissi decisions that the Commission must itself determine the applicability of the exclusionary rule to the circumstances resulting in the illegal drug stamp tax assessments before it.
Petitioner argues that evidence of Petitioner's possession of XXXXX should be excluded from this proceeding because it was seized under the authority of an improperly issued search warrant. In particular, Petitioner contends the warrant should not have authorized the nighttime search of Petitioner's residence because the supporting affidavit was insufficient to support a nighttime search.
In State of Utah v. Rowe, supra, Utah's Court of Appeals held that a "nighttime" warrant is properly issued upon a showing, among others, that property is on the verge of being destroyed. The affidavit in this case stated that the affiant could smell the odor of burning XXXXX coming from Petitioner's residence. The Commission finds that the foregoing statement is sufficient to demonstrate that the XXXXX was being destroyed, thereby justifying a nighttime warrant. Evidence of Petitioner's possession of XXXXX which resulted from execution of the warrant is therefore admissible in this proceeding.
The only defense raised by Petitioner to the assessment of tax and penalty in this matter related to the admissibility of evidence seized pursuant to the search warrant discussed above. The Commission having concluded that such evidence is admissible, and all other elements necessary to support the assessment of illegal drug stamp tax having been admitted by Petitioner, the Commission concludes that Respondent properly assessed Petitioner with tax and penalty in the amount of $$$$$ pursuant to the Utah Illegal Drug Stamp Tax Act. It is so ordered.
DATED this 3rd day of March, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes