This is an old concept. In Mississippi, when the whole state was dry by law, the state still taxed illegal liquor. It didn’t stop the police from raiding bootleggers, although if you paid the taxes, then you didn’t have to pay extra penalties for not paying the taxes when you were caught. It did result in the Mississippi state tax commissioner having the highest pay of any public official in the country, including the president, since he was paid a percentage of the taxes and penalties that the offenders had to pay if they were caught.
You can actually deduct the cost of goods sold from your gross income if reporting income from an illegal business, but none of the other things you could normally deduct if you were doing something legit.
Just declare this as “other income”. The IRS will cash the check.
Yeah, the problems of the illegal businessman are manifold. This is why the mafia owned so many vending machine companies and other cash-only businesses…just declare that the money you actually made selling smack was from your vending machine company, cash is untraceable. The biggest problem with illegal businesses is spending the cash, you can buy a lot of things with cash but you can’t buy big ticket items. It’s a lot of work getting that paper money transformed into usable electronic money.
You know, maybe it was our upbringing that directed our views toward trouble.
I am very interested in Marijuana being legal. We have a thread here that points us to who can answer questions about paying tax on “other income.” There is much more at stake in the Great Debate of Marijuana. This is the first Reform Movement of the 21st Century. The benefits cannot be fully weighed in on because they are just starting anew.
The consequences are obvious. And now we have fellow Marines in harm’s way. They know the value of smokin’ a good bud. I would love to have that chance by the time the last one comes home…
I am still focused on the tax side of legalization. As a matter of fact, that may explain why the IRS does not do many favors for DEA. You can tell where money is flowing across government borders; (Border is defined as agency, association, etc.) Haven’t seen alot of drug campaign ads up here in fascistville as of late) What if the IRS was pullin’ rank? Anyone in govt. knows that ego overrides common sense and the heads of these departments can’t possibly love each other at all times. What if the California Farmer were the new best friend of Uncle Sam’s Treasury? It makes perfect sense economically. California carries a 38B. annual debt, what if the State had a tax strategy to bring wealth that flowed out in the 1980’s back in the late 90’s-early 2000’s. What if tax revenue were well into the 100B or higher area?
Now that is a conspiracy I would love to hang my hat on…
I still don’t get this. Did the legislature just pass the law on principle (“why shouldn’t drugs be taxed?”) and then someone had to come up with a mechanism for it, which ended up being these stamps?
Is there any gain to the taxpayer in this situation?
Apparently, the States that passed these laws wanted to get a double bennie from your being busted.
The CS Act of 1970 gets you for the possession and fines. Not wanting to be left to play by (or with) themselves, the States adopted the “Illegal Drug Tax Stamp” which allows for a tax to be levied on your “fine marijuanas” or “Stash” as some like it called.
The tax can actually be paid upfront where it is about 1/3 or less than the levy when you get popped. The law actually reads that it can be possessed if the tax is paid.
Upon further discussion, and the help of some very Logic minded folks in this fine establishment, we discovered that the last part of the law is written with the Barber Paradox in it.
Basically, if illegal drugs become legal to possess, then the stamp is useless. So, in Idaho and Utah, you can pay the tax on your stash and still get busted for having it. I was, however, advised by another patron here to start snapping them up and quick. When they become judicially worthless, they will rise in value because of their rarity. Go to (tax stamps marijuana) in google images to see the other state stamps.
Incidentally, people are getting nervous up here, with all the money flowin’ in, where is it all comin’ from? I tell them it is "Legal Marijuana Money comin’ in from every state that is reaping the profits from the $150bn industry. To bad we live so far in the past, otherwise we could be growin’ our own native crop. I love watching people run out of church, ears covered and screaming…
Of course, even if you were right that getting a tax stamp gives one the right to possess marijuana in your state, you’ll still wind up in the federal pen, tax stamp or no.
Mary Jane was pretty much made illegal in the U.S. with the Marihuana Tax Act of 1937 which created a huge fine and jail time for possession without having the proper tax stamp. A stamp which the government refused to issue, thereby making it de facto illegal. It was later replaced with the Controlled Substances Act of 1970 which explicitly made marijuana illegal. So even if you find some scheme to get around the state penalties, you still have the DEA to contend with.