SPELLMAN LAW, P.C.
Based In West Des Moines, Iowa, Practicing In Central
Iowa And Throughout The State Of Iowa
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In Iowa, dealers in illicit drugs are required to get tax stamps

| Sep 3, 2019 | Drug Charges |

Many people call it a punitive measure or an extra punishment for distributing drugs. If you’re caught dealing illegal drugs in Iowa, you may be charged with tax evasion if you didn’t obtain excise tax stamps for what you sell. Having the stamps proves you’ve paid the required taxes.

Iowa law requires even illegal distributors to permanently affix an excise tax stamp to:

  • Every 7 grams of hard drugs, like meth, cocaine or heroin
  • Every 10 dosing units
  • Every 42.5 grams of marijuana
  • Each marijuana plant

Failure to obtain and affix these tax stamps is a Class D felony, which carries a penalty of up to 5 years in prison, along with fines. Each stamp costs at least $215. The stamp for an unprocessed marijuana plant is $750.

That’s bad enough, but failure to buy tax stamps for your illicit goods can have another, equally serious consequence: a civil tax penalty equal to the amount of taxes owed. In other words, if you owed $76,500 in excise taxes on your illegal drugs, you could be fined an additional $76,500 as a penalty. Add interest and collections and you are looking at real money. Indeed, Iowa’s taxes on illicit drugs are often significantly higher than the value of the drugs themselves.

You don’t even have to be convicted of drug distribution or tax evasion to owe the civil penalty. Iowa’s courts have so far upheld these penalties as civil, not criminal, tax measures. That said, most people who are hit with the tax penalty have been convicted of the underlying criminal offense.

At a time when most Americans believe our drug laws are too harsh, it can come as a nasty surprise to be assessed an excise tax penalty. It’s especially troubling when the U.S. Supreme Court recently ruled that the Eighth Amendment prohibits excessive fines assessed by states.

If you have been arrested for drug dealing or distribution, you can’t afford to go without an attorney. Be sure to hire an experienced defense lawyer right away; they may be able to mitigate the damage.