BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) FINDINGS OF FACT,
: CONCLUSIONS OF LAW,
v. ) AND FINAL DECISION
COLLECTION DIVISION OF THE ) Appeal No. 92-1301
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 and XXXXX. Alan Hennebold, Presiding Officer, heard the matter for and on behalf of the Commission. XXXXX, of XXXXX, XXXXX & XXXXX, represented Petitioner. XXXXX, Assistant Utah Attorney General, represented Respondent Collection Division.
Based upon the evidence presented at the hearing, the 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. During the prehearing conference in this matter, Petitioner's attorney conceded that the substance upon which Respondent's assessment is based was, in fact, cocaine. Petitioner's attorney also conceded that Petitioner had neither purchased nor affixed the requisite drug stamps to such cocaine.
4. The cocaine in question weighed XXXXX grams.
5. During XXXXX, Petitioner and XXXXX drove from Utah to XXXXX to purchase cocaine. Petitioner provided the funds for the trip, including the purchase price of the cocaine. After buying the cocaine, Petitioner and XXXXX returned to Utah. Petitioner kept the cocaine for one day, then placed it at the XXXXX residence, in a locked suitcase belonging to Petitioner. XXXXX did not have a key to the suitcase, but gained access and took small amounts of cocaine by removing the hinge pins. From time to time, Petitioner would arrive at XXXXX's residence, unlock the suitcase and remove a portion of the cocaine, presumably for sale.
CONCLUSIONS OF LAW
The Utah Illegal Drug Stamp Tax Act imposes a tax of $$$$$ per gram on certain 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 the Illegal Drug Stamp Tax Act 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 any 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).)
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 in question is in fact cocaine and that he did not purchase or affix the required drug stamps to such cocaine. Petitioner does not contest the fact that the cocaine weighed XXXXX grams. Therefore, the only issue remaining is Petitioner's status as a "dealer", as the term is defined by Utah 's Illegal Drug Stamp Tax Act.
Section 59-19-102(2) of the Illegal Drug Stamp Tax Act defines "dealer" as one 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. Credible, consistent testimony from two witnesses establishes that Petitioner imported the cocaine into Utah, then possessed and controlled the cocaine, even though it was stored at the XXXXX residence for safe-keeping.
Based on the foregoing, the Commission concludes that Petitioner was a "dealer" with respect to the cocaine in question. The Commission therefore affirms Respondent's assessment of tax and penalty against Petitioner, as set forth in Respondent's Notice of Assessment dated XXXXX. It is so ordered.
DATED this 10th day of June, 1993.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
R. H. Hansen Roger O. Tew
Joe B. Pacheco S. Blaine Willes