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  • January 7th, 2010

    Taxing Illegal Drugs

    It is common knowledge that to sell or buy drugs is illegal. However, not too many people know that in the state of Alabama taxes the sale of illegal drugs. This does not mean that drug dealers actually followed that law. State revenue officials say that since 1988 – when the law was put in action – they generated almost no income at all.

    There is some form of tax stamp issued on the sale of illegal drugs, that were created in Alabama in 1988, and it functions as an excise tax, similar to the levies obligatory for cigarette sales. Currently, a stamp for a gram of marijuana is $3.50; for a gram of a controlled substance, such as cocaine, is $200. The money is to be collected after the dealers are arrested. Anyone caught with large quantities of drugs but no stamps would not only face jail time, but prosecution for tax avoidance.

    Some people found it absurd – the requirement to buy tax stamps for an illegal product, – and therefore a costly opposition was fighting the challenges.

    However, the Revenue Department of Alabama continues to sell the stamps. Judging by the quantities sold, one can say that people would buy something like that out of curiosity rather than out of need.

    This taxing law did not help to prevent or lower drug-related crime rate.

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