BEFORE THE UTAH STATE TAX COMMISSION
Petitioner, ) ORDER ON MOTION
: FOR SUMMARY JUDGEMENT
COLLECTION DIVISION OF THE ) Appeal Nos. 93-1714
UTAH STATE TAX COMMISSION, : and 95-0042
Respondent. ) Tax Type: Drug Stamp
STATEMENT OF CASE
This matter came before the Utah State Tax Commission upon Petitioner=s Motion for Summary Judgement on the issue of the constitutionality of the drug stamp tax imposed upon Petitioner pursuant to the provisions of Utah Code Ann. '59-19-101, et. seq. Respondent has filed a Cross Motion for Summary Judgement asking for Summary Judgement in its favor.
The facts of this case are substantially unknown, but there are no known disputed issues of fact. Petitioner did not make any representations of fact, and did not file any affidavits with his motion for summary judgement. In the brief of Respondent, the following facts, which appear to be undisputed, are stated as follows:
1. Petitioner was arrested for possession of Marijuana.
2. Petitioner was charged with the possession of the marijuana, and was subsequently found guilty on this charge.
3, The Collection Division assessed drug stamp taxes against the Petitioner in the amount of $$$$$, plus a 100% penalty of $$$$$.
Petitioner has requested a summary judgement upon two basis: first, Petitioner alleges that she has been placed in jeopardy on two occasions, which is barred by the fourteenth amendment to the United States Constitution, and Article I, Section 12 of the Utah Constitution as a violation of the double jeopardy provision. Petitioner also alleges that the drug stamp tax is excessive punishment as a result of having approximately one pound of marijuana, which Petitioner alleges is barred pursuant to the Eighth and Fourteenth Amendments to the United States Constitution, and Article I, Section 12 of the Utah State Constitution.
As authority for its proposed summary judgement, Petitioner relies upon the United States Supreme Court decision in Department of Revenue of Montana v. Kurth Ranch, 128 L.Ed. 2nd, 767 (1994), United States v. Halper, 490 U.S. 435 (1989), and Austin v. United States,125 L.Ed. 2nd 488 (U.S. 1993).
The drug stamp tax is imposed and administered in accordance with the provisions of Utah Code Ann. '59-19-101, et. seq. Pursuant to those provisions, a tax is imposed upon marijuana and other controlled substances in accordance with the schedule as set forth in the statute. The tax is required to be paid in advance and the stamp is required to be affixed to the marijuana and controlled substances. The tax is in a fixed amount and is imposed upon the substance and is not imposed upon the commission of a crime. A small amount of controlled substances or marijuana will result in only a small amount of tax, whereas a large amount of marijuana or controlled substances will result in a larger amount of tax.
The Utah State Tax Commission is charged with the administrative responsibilities related to the drug stamp tax. The Tax Commission is also required to enforce the provisions of the drug stamp tax until such time as it may be removed by the legislature or stricken by the courts as being unconstitutional. As of the time of this order, the drug stamp tax for the State of Utah has never been held to be unconstitutional.
The Petitioner=s Motion for Summary Judgement urges the Commission to grant a summary judgement on the basis of Kurth Ranch, Halper, and Austin as set forth above. However, to the extent that Petitioner is asking the Commission to determine the drug stamp tax either as enacted or as applied is unconstitutional, it is beyond the jurisdiction of the Tax Commission to make such a determination. The Utah Supreme Court has held in the case of Shea v. State Tax Commission, 101 Utah 209, 120 P.2nd 274 (1941) that the Tax Commission cannot determine the constitutionality of legislative enactments. Accordingly, the Commission must presume that the drug stamp tax statutes are constitutional until they have been specifically determined otherwise by a court of competent jurisdiction.
Even assuming that the statute is constitutional, Petitioner would still argue that the state is barred by the provisions of the federal constitution from punishing the defendant for the same conduct for which she was convicted in a criminal action. However, the Commission specifically finds that the drug stamp tax is not a punishment for the criminal action. In this case, a tax is simply imposed upon certain substances, and a penalty is also imposed for failure to timely pay the tax. The imposition of the tax does not depend upon the commission of any crime, and it does not depend upon conviction for any crime. Therefore, the Commission determines that the drug stamp tax act does not violate the fifth amendment provision against double jeopardy for being a civil penalty. It is not a civil penalty for the criminal action of which Petitioner may have been guilty. The discovery of the failure to pay the tax may have been discovered at the same time that Petitioner was arrested for the criminal violation, but the imposition of the tax is not for the same set of facts. If Petitioner had properly acquired the drug stamps, then no additional tax and no penalty would have been imposed at the time she was arrested.
Petitioner also cites the case of Austin v. United States, supra, in which the Petitioner=s mobile home and automobile were required to be forfeited for their use in an illegal drug activity. In that case, the court held that the forfeiture was an additional punishment for the illegal drug activity, and therefore violated the double jeopardy provisions. However, where, as in this case the tax is imposed for a totally separate action which is not part of the criminal action, there is no double jeopardy. Further, this is not a forfeiture provision. It is simply a tax based upon the amount of controlled substances which are owned or are in the possession of the taxpayer. The failure to pay that tax, as with any tax, results in the imposition of a penalty.
DECISION AND ORDER
Based upon the forgoing, the Commission hereby determines that the Motion for Summary Judgement filed by Petitioner should be, and is hereby denied. The Commission further determines that the Summary Judgement requested by Respondent should be, and is hereby granted. And it is determined that the tax in the amount of $$$$$, plus a 100% penalty of $$$$$ were proper and are hereby sustained for Appeal No. 93-1714. In addition, the tax in
the amount of $$$$$ and penalty of $$$$$ is hereby sustained for Appeal No. 95-0042.
DATED this 7th day of December, 1995.
BY ORDER OF THE UTAH STATE TAX COMMISSION.
W. Val Oveson Roger O. Tew
Joe B. Pacheco Alice Shearer
NOTICE: You have twenty (20) days after the date of a final order to file a Request for Reconsideration with the Commission. If you do not file a Request for Reconsideration with the Commission, you have thirty (30) days after the date of a final order to file a.) a Petition for Judicial Review in the Supreme Court, or b.) a Petition for Judicial Review by trial de novo in district court. (Utah Administrative Rule R861-1A-5(P) and Utah Code Ann. ''59-1-601(1), 63-46b-13 et. seq.)