Truly Bizarre Taxes: The Tax on Illegal Drugs

One can never underestimate the enthusiasm that politicians have for trying to hunt up tax revenues. The creativity of some politicians can lead to bizarre taxes and unfortunate results.

Taxes on Illegal Drugs

One argument for the legalization of various narcotics is that massive tax revenues would be created. Interestingly, a few states already are trying to collect such taxes!

More than 10 states have tried to tax people that possess illegal drugs. For example, Kansas levies a drug tax on dealers as soon as they take possession of the substance. To avoid prosecution for failure to pay the drug tax, individuals possessing the drugs are supposed to purchase "drug tax stamps" and attach the stamps to the drugs in question. The stamps are valid for 3 months.

In an apparent attempt to promote compliance, the Kansas Department of Revenue promises:

"A dealer is not required to give his/her name or address when purchasing stamps and the Department is prohibited from sharing any information relating to the purchase of drug tax stamps with law enforcement or anyone else."

The tax is levied on cocaine, marijuana, methamphetamines and other hard drugs. Interestingly, the state collected over $300,000 in such taxes by going after individuals that were charged with criminal activity. This is better known as the "Al Capone Theory", which is derived from the fact that authorities were able to put away the famous mobster on tax evasion charges. Alas, criminal prosecutors have not always welcomed the illegal drug tax.

Drug Tax Foils Prosecution of Drug Dealers in Texas

The 5th Amendment of the Constitution protects Americans from being punished twice for the same crime. This concept, known as "double jeopardy", caused prosecutors in 1989 to literally beg the state comptroller's office to stop accepting tax payments by drug dealers. The reason? A Texas Criminal Court of Appeal ruled that the state law assessing taxes on illegal drugs constituted a "punishment". As a result, requiring the payment of the tax constituted double jeopardy if the taxpayer had already been charged criminally.

In an attempt to get their clients off on drug charges, criminal attorneys began advising them to rush to pay their drug?related taxes. The theory was that once the taxes were paid, the drug dealer could not be prosecuted because doing so would constitute a second punishment! The appellate court agreed with the theory and the state comptroller immediately stopped collecting the Texas drug tax.

Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.

In The News:

Here's how to use insurance plans to save income taxes  Moneycontrol.comIf the policyholder surrenders the traditional plan before two years and the ULIP plan before five years the tax benefit will get reversed.
How High-Tax Countries Tax  BloombergThey don't tax wealth much, their income taxes are high but not very progressive, and they rely a lot on consumption taxes.
No direct increases in corporate and individual taxes  Business DayThe budget does not propose any direct increases in corporate and individual income tax, but the failure to adjust tax tables to account for inflation means that ...
Tax clock: Calculate how many hours you spend working for your taxes  Fin24Just how many hours of your day do you spend working for government taxes?
I owe how much? Americans are shocked by the impact of Trump's tax law  CNBCThe first tax filing season under the new federal tax law is proving to be surprising, confusing — and occasionally frightening — for some Americans.
Bill Gates: Taxes on rich should be 'much higher' but capitalism still works — here's why  CNBC"My vote will be not to make a radical change" to the economic system of the United States Bill Gates told CNN's Fareed Zakaria.
Tax Day 2019: TaxAct review for filing 2018 tax return  Business InsiderI've been using tax filing software TaxAct for a few years now to file my taxes online, and I've found it to be straightforward and easy.
Carbon taxes could create new winners and losers among countries, research says  Science DailyA global carbon tax would create new sets of economic winners and losers, with some countries holding a distinct competitive advantage over others, according ...
Your parents, wife and children can help you save taxes. Here's how  Economic TimesSalaried individuals can save tax by paying rent to their parents and availing the HRA exemption benefit.
Government relaxes norms, investment limit for angel tax concession to startups  Times of IndiaIndia Business News: A notification regarding simplifying the process for startups to get exemptions on investments under section 56(2)(viib) of Income Tax Act, ...
Does Amazon pay ‘$0’ in taxes?  The HinduFor 2018, the tech giant reported owing $322 million in taxes to U.S. State governments and another $563 million in the rest of the world.
Fact-check: Does Amazon pay '$0' in taxes?  Times NowAmazon found itself in the headlines after suddenly pulling out of a planned New York City corporate expansion amid controversy over local tax incentives that ...
Democrats Want to Tax the Wealthy. Many Voters Agree.  The New York TimesA proposal to tax wealth finds support across party lines, along with the premise that the government should combat inequality.
GST Council Extends Return Filing Deadline, Decision On Realty Tax Deferred  NDTV NewsThe GST Council on Wednesday deferred a decision on rationalisation of tax rates on real estate and lottery till February 24 as some opposition-ruled states ...
There's still time to slash your 2018 taxes. Here's how  MarketWatchHere are 4 maneuvers you can make to lower your tax bill before the April filing deadline.
HONEST MINING AS OPPOSED TO MINING YOUR TAXES  Daily TelegraphAustralian mining companies, the employees of mining companies and businesses associated with mining equipment, supplies and transport all pay a great ...
What a Higher-Taxed America Might Look Like  BloombergSweden and other places with big safety nets don't take as much from the wealthy as you'd think.
Top banks under taxman’s lens over service tax issue  Economic TimesNEW DELHI: The intelligence arm of the indirect tax department has asked three top banks to pay full tax due on fees paid to card and payment companies ...
Budget 2019: What happens to your taxes now  Economic TimesYes, yes, those with net taxable income below Rs 5 lakh are the biggest gainers from Piyush Goyal's budget. But what about the others, I.e., those earning more ...
Taxes for senior citizens: Here's a list of benefits and exemptions available  Moneycontrol.comSeniors can claim deduction of up to Rs 50000 p.a. for medical expenses and/or health insurance premium.
Budget 2019: No marginal relief for taxpayers whose taxable income exceeds Rs 5 lakh  Economic TimesAlthough the interim budget 2019 has made income up to Rs 5 lakh tax free, the marginal increase in income above Rs 5 lakh will result in more tax outgo than ...
Amazon Paid $0 In Federal Income Taxes Last Year [Infographic]  ForbesDespite doubling its profits, Amazon has paid zero dollars in federal taxes for the second successive year. A recent report from the Institute on Taxation and ...
Some Americans face a costly surprise this tax season: tiny refunds or bigger bills  USA TODAYFor some, this tax season so far has come with a costly surprise – a tiny tax refund or a big tax bill. The shock is hitting their finances.
With elections ahead, Greece's opposition is promising lower taxes and 'aggressive' growth  CNBCIn an exclusive interview, Kyriakos Mitsotakis told CNBC that he wants to bring down taxes for domestic and international businesses in what he described as an ...
Tax Raid Continue At Road Contractor's Properties In Bhopal  NDTV NewsThe Income Tax department on Wednesday continued raids for the second day at four locations, including house and office of a road contractor Nilay Jain in ...
Do your taxes for cheap! H&R Block Tax Software Deluxe is on sale for just $18  PCWorldThe tax deadline is still a few months away, but this deal for H&R Block Tax Software Deluxe can't be missed.
Budget 2019: Only those with income up to Rs 5 lakh to pay no tax, rates remain same for all others  Economic TimesUnion Finance Minister Piyush Goyal in his interim budget 2019 has proposed that individuals with taxable income up to Rs 5 lakh will get full tax rebate under ...
#Budget2019: South African fuel taxes to increase by 30 cents  IOLMotorists should brace for more fuel price pain in the coming months as tax hikes add to an already weakening fuel price equation.
77% of Americans failed this short quiz on tax law changes—here are the 4 questions that stumped them  CNBCThe Tax Cuts and Jobs Act of 2017 made sweeping changes — now, Bankrate finds, as Americans are filing taxes, many of them are unclear as to how the law ...
The curious case of missing wealth taxes in Singapore  TODAYonlineIt should come as no surprise to anyone that the Budget Statement of 2019 did not introduce any new taxes on wealth in Singapore nor raise the rates of the few ...
10 states that are the most tax-friendly for middle-income households  CNBCTired of high income taxes? Consider packing up and heading for Alaska, Delaware or Nevada. Here's a list of the 10 most and least tax-friendly states for ...
Ohio gas taxes could skyrocket to pay for road and bridge repairs  WTOLGas prices in Ohio could go up even more if Governor Mike DeWinne gets his way and ends up increasing the gas tax to fix Ohio roads and bridges.
A Christian Woman Refused To Do A Lesbian Couple's Taxes Because They Are Married  BuzzFeed News"We just sat there shocked for a minute and then we got up and walked out," one of the women told BuzzFeed News.
What Virginia tax changes mean for your state income tax return  WTVR CBS 6 NewsNow that the Virginia Department of Taxation has begun processing state returns, officials said taxpayers can expect "slower turnaround times for refunds" ...
Tax the rich, but bring in only progressive reforms: Bill Gates  Moneycontrol.comCongresswoman Alexandria Ocasio-Cortez has supported the idea of taxing income over $10 million at 70 percent, which is currently 37 percent.
‘Accredited’ tag may still not save startup angels from tax  Economic TimesBENGALURU: The Central Bureau of Direct Taxes (CBDT) is unlikely to allow startups that have raised money from 'accredited investors' to be exempt from ...
Angel tax exemption may be hiked to Rs 25 crore  Economic TimesAngel tax is a term used to refer to the income tax payable on capital raised by unlisted companies via issue of shares.
Gov. Lamont’s calls for state taxes on plastic bags, wine and liquor bottles are facing opposition  Hartford CourantGov. Ned Lamont's proposals to put state taxes on single-use plastic bags and on wine and liquor bottles is already running into criticism and opposition from an ...
High Dividends, Low Taxes: A Careful Investor's Guide To Preferred Stocks  ForbesLooking for a stodgy, somewhat safe and tax-favored income stream? Certain preferred stocks fit the bill. We'll show you which ones.
Tax Return trouble for large Utah families following Federal changes  KSTU FOX 13 Salt Lake CityUtahns have always been demographically unique, largely because of the fact that a majority of residents belong to the Church of Jesus Christ of Latter Day ...
Tax on sugary drinks tops Lamont's list of new 'sin taxes'  The CT MirrorGov. Ned Lamont's first budget will include a series of new “sin tax” proposals, including levies on sugary drinks, electronic cigarettes and plastic bags, and ...
Sir Dorabji Tata Trust contests R Venkataramanan tax order  Economic TimesSir Dorabji Tata Trust has appealed against the income tax department's order that stemmed from the salary of outgoing managing trustee R Venkataramanan.
Amazon's new Virginia data center is getting a bunch of tax breaks, and it gives insight into how the company reduces its tax liability  Business InsiderVirginia offers tax breaks to the biggest data-center operators. And it designated land Amazon was interested in as an "opportunity zone."
The 8 Most Common 2019 Tax Return Questions, Answered by Experts  The New York TimesThe most important changes to the tax code in decades have taken effect — and filers are confused. We asked CPAs and other tax-prep pros to simplify things.
Watch Out. Tax Season Is Even More Stressful Than Usual.  The New York TimesWith millions of people filing tax returns under a new tax law and after a long government shutdown, this is a challenging year. We offer survival tips and ...
Thanks To Trump Tax Law, The Time Is Ripe For This Roth Conversion Retirement Trick  ForbesBetween Trump's temporary tax cuts and the stock markets downswings, now could be the time to do a Roth conversion.
The U.S. Cut Taxes. Why Will Fewer Folks Get Refunds?  BloombergU.S. taxpayers are filing their first returns under the 2017 tax code overhaul that lowered rates for most people. What makes the paperwork headaches tolerable ...
5 tax breaks you can't get anywhere but the US  Business InsiderSome tax deductions and tax credits for businesses and individuals are unique to the United States tax code.
Want lower taxes? Murphy should focus on pensions, aid to some schools, former candidate for governor says  NJ.comGov. Murphy, this is no time to pay for more things we can't afford.
Minnesota Gov. Tim Walz proposes gas tax hike, more money for schools, roads  Star TribuneHundreds of millions of dollars more for education, the expansion of a public option for health insurance and a 20-cent gas tax increase are key pieces of Gov.
It’s income tax time: CRA opens electronic filing service for 2018 returns  Global NewsThe deadline to file your taxes is April 30, but there are a few advantages to getting your paperwork in much sooner.
The Constitutional Critiques of Elizabeth Warren’s Wealth Tax Plan Are Absurd  SlateOne of Sen. Elizabeth Warren's first proposals upon joining the 2020 presidential field was a wealth tax. Warren would impose an annual tax of 2 percent on ...
How did Netflix get away with not paying income tax in 2018?  The GuardianThe company posted its largest ever profit in 2018 – $845m – but paid no federal (or state) income tax, and there are a few clues as to why.
Harshad Mehta scam: Family free of over Rs 2,000cr income tax demand after 27 years  Moneycontrol.comThe tax refunds following favourable court orders would eventually pave the way for the custodian to release the assets of the Mehtas.
4 Overlooked Tax Deductions That Could Save You Big Bucks  The Motley FoolTax season is upon us again, and with it comes a raft of deductions that can save you money and pump up any refund you may get from the Internal Revenue ...
Tax planning for 2019-20: Know what interim Budget offers to reduce your tax outgo  Times NowBudget 2019 came in full swing even though it was an interim one. With the announcement of full tax rebate for the salaried individuals earning up to Rs 5 lakh in ...
Government tweaks Startup definition, raises angel tax exemption limit. Check details  Times NowNow an entity will be considered as a Start-ups up to a period of ten years from the date of incorporation and registration. This period was earlier used to be 7 ...
Cashed-up retirees getting a refund for tax they never paid? We've hit peak rort  The GuardianSome of the wealthiest Australians pay negative tax and still get to call themselves self-funded.
The 70% top tax rate, explained with potatoes  Vox.comA few weeks ago, Rep. Alexandria Ocasio-Cortez (D-NY) suggested that the top tax rate for the very rich should be 70 percent. The current top income tax rate is ...
How can we tax the footloose multinationals?  The GuardianApple and companies like it claim to be socially responsible, but that should mean paying your fair share of tax.
MSPs approve Scottish government income tax plans  BBC NewsMSPs have voted to approve the Scottish government's income tax plans for the coming year. Finance Secretary Derek Mackay chose not to pass on a tax cut ...
Arkansas governor signs bill cutting top income tax rate  KATVLITTLE ROCK, Ark. (AP) -- Arkansas' governor has signed into law his $97 million plan to cut the state's top income tax rate over the next two years. Republican ...
All Talk, Little Action: What to Expect on Tax Policy This Year  The New York TimesDon't count on big changes. But the heated debates in Congress and on the 2020 campaign trail give clues about legislation to come.
Tax case: McKinsey has KPO in India not BPO, says Supreme Court  Economic TimesIn a setback to the global white shoe consulting firm the Supreme Court rejected a special leave petition (SLP) filed by McKinsey Knowledge Centre against a ...
A wealth tax is a bad idea  CNNDavid A. Andelman, drawing on several European examples, writes that Elizabeth Warren's proposed wealth tax in the United States would likely be an ...
Centre eases tax rules for startups  Times of IndiaCompanies News: NEW DELHI: Large listed companies and alternate investment funds can now invest any amount in start-ups without worrying about tax ...
B.C. government unveils budget big on social spending, low on new taxes  Vancouver Is AwesomeParents will receive a larger child benefit until their child is 18, students will no longer have to pay interest on B.C. student loans, and people on income ...
Rubio’s Smart Push to Change the Tax on Buybacks  BloombergThe stock market dipped over Senator Marco Rubio's proposal to change how investors are taxed when companies buy back shares. This knee-jerk reaction ...
Just who are the taxpayers?  Bangalore MirrorIndia has one of the worst ratio of taxpayers to voters . If we want to become a developed country, we need more people filing taxes. Have you wondered how ...
These three tax breaks for 2018 are still up in the air  CNBCWhether you own a home or you're shelling out for higher-education costs, Congress has yet to approve a package of breaks known as tax extenders.
Karnataka businessman jailed for income tax default of Rs 7.35 crore  The News MinuteA Karnataka-based businessman has been jailed for six months for allegedly not filing his income tax arrears and interest of around Rs 7.35 crore despite ...
No tax liability if your income is up to Rs 9.5 lakh, but conditions apply  Business StandardStressing that tax concessions have been provided with a view to help poor and middle-class people living on a tight budget, Finance Minister Piyush Goyal on ...
The tax code treats all 1 percenters the same. It wasn’t always this way.  The Washington PostWhen we debate income tax policy in the United States, we typically focus on what's in the chart above, which shows the top marginal tax rate from 1913 to the ...
Filing Taxes on Your Phone? Insert Frustrated-Face Emoji Here  The New York TimesMillions of people are expected to submit their returns via mobile platforms this year. I won't be one of them.
New Hampshire House Subcommittee Approves Bitcoin for Taxes Bill  Bitcoin NewsDuring the first week of the new year, two U.S. representatives from New Hampshire, Dennis Acton and Michael Yakubovich, proposed a bill that would allow ...
One surprising way to beat the SALT deduction cap: Move to a nearby town  CNBCMuch has been made of the migration of residents from high-tax to low-tax states following a new cap on the deduction for state and local taxes. But some New ...
Notional rent: How to calculate it and how much tax do you pay?  LivemintNotional rent was introduced to discourage taxpayers from leaving houses vacant and create supply of properties for tenantsNotional rent is calculated using the ...
The new tax law has a bunch of changes. Here's what you need to know as filing season begins  CNBCIt's time to sharpen your pencils and work on that 2018 income tax return. Just make sure you understand the new tax law first. After one year under the Tax Cuts ...
Linking Aadhaar-PAN is mandatory for tax filers; to be completed by March 31: CBDT  Economic TimesNEW DELHI: The CBDT has stressed that Aadhaar-PAN linking is "mandatory" for those filing an Income Tax Return (ITR) and this procedure has to be ...
Tax ombudsmen abolished: Experts raise concern  LivemintIn the absence of the tax ombudsmen, taxpayers should be alert to the structure of the available alternative grievance systems and their limitationsGovt said the ...
The impact & significance of tax changes  Economic TimesThe only sector that saw substantive changes in the Finance Bill was real estate.
How to claim marijuana on your taxes  The GrowthOpWith Canada now raking in up to $100 million per year in pot taxes, some of that revenue will soon be heading right back to pot users in the form of ...
How reachable is zero-tax income level of Rs 5 lakh using deductions, exemptions?  Economic TimesAnjali Behl has not been able to hide her excitement since the Budget was announced on 1 February. “My net income after all deductions will be below Rs 5 ...
Income-Tax Department raids Divi's Lab premises  Economic TimesDrug firm Divi's Laboratories Tuesday said income tax department has conducted raids at its premises, including its head office and manufacturing sites, ...
Medical expenses that can be claimed as tax break under section 80DDB  Economic TimesThe deduction under section 80DDB can be claimed irrespective of whether you have paid a premium for a health insurance policy or not.
Tax guide for YouTube bloggers: Here's how to determine your income tax liabilities  Moneycontrol.comYou will be taxed as a sole proprietor unless you register your business as a company, LLP or Partnership Company.
Tax Department Seeks To ‘Examine’ Tribunal Orders Against It  BloombergQuintA recent office memorandum issued by the Central Board of Direct Taxes has perturbed tax practitioners across the country. The CBDT has set up a committee of ...
Smaller Tax Refunds Surprise Those Expecting More Relief  The New York TimesMany early filers under President Trump's tax plan are surprised that their refunds are smaller or that they owe the I.R.S., even as their tax burdens have ...
Lyft donates $700,000 to Oakland after quietly battling city taxes  The GuardianDonation will aid transportation in low-income neighborhoods, but tax could have generated far more money. Darwin BondGraham in Oakland. Wed 13 Feb ...
Alphabet unit seeks share of property taxes for Toronto smart city  ReutersAlphabet Inc's Sidewalk Labs unit is proposing it get a share of property taxes, development fees, and the rising value of Toronto city land as part of a deal to ...
How the new tax law will affect your 2018 return  NBC NewsFor the first time in her life, Gina Ednie, 45, has hired an accountant to prepare her taxes. Not only is she concerned about the $18,500 property tax bill on her ...
Most Americans Support Increasing Taxes on the Wealthy: Poll  FortuneSupport for raising taxes is widespread, according to a new poll, which found that 76% of registered voters want the wealthiest Americans to pay more.
Cabinet approves abolition of Ombudsman for direct, indirect taxes  Economic TimesThe approval comes against the backdrop of people preferring online grievance redressal mechanism.
Tax queries: How much of my gratuity amount is tax-exempt?  Economic TimesDilip Lakhani, Senior Chartered Accountant, answers queries from our readers on income tax and other levies. I retired from a bank on Oct 1, 2018. My gratuity ...
How your employer can help you reach zero-tax Rs 5 lakh income  Economic TimesAs a salaried taxpayer, you are eligible for various tax benefits that can bring down your taxable income. Here is a look at six such benefits.
Sacco savers dividends drop as tax takes effect  The Star, KenyaKenya Police Sacco chairman David Mategwa presents a gift to National Police *Service* Commissioner Mary Owuor (L) as Commissioner of Cooperatives Mary ...
For Democrats Aiming Taxes at the Superrich, ‘the Moment Belongs to the Bold’  The New York TimesThe only thing more startling than the flurry of tax proposals Democrats have unveiled in recent weeks is the full-throttle response they've gotten from the public.
A sales tax hike for schools on the ballot in Arizona? Here's why it might actually happen  AZCentralA proposal to ask Arizona voters whether they want to boost the state sales tax for schools took a giant step forward this week.
Taxes 2019: When to file and what big changes to expect  USA TODAYTax filers need to realize, though, that it won't be business as usual when it comes to filing their 2018 tax returns.
Putting the 'Trump tax cuts will pay for themselves' myth to bed | TheHill  The HillInstead of using tax reform as an opportunity to raise this revenue, however, we used it as an excuse to cut taxes.

Business Tax Loophole: Leasing Assets To Your Corporation

While there are many equally valid reasons to incorporate, saving... Read More

Failure To Pay Employment Taxes ? Penalties

As an employer, you must pay employment taxes if you... Read More

State Tax Information

All states also have their own tax system. Typically there... Read More

Tax Reduction Tips

In the rush to get tax returns prepared and filed... Read More

Take Control of Your Taxes

As everyone in the U.S. knows, we have just passed... Read More

Tax Trap #4 -- The Quagmire of Depreciation

If you are a Small Business Owner or Self-Employed Person,... Read More

Tips and Simple Guidelines on How to Calculate Payroll Taxes

Managing a business small, medium or big requires you to... Read More

IRS Lock-In Letters ? What?s An Employer To Do?

Employers often ask employees to designate the amount of tax... Read More

I Havent Filed a Tax Return with IRS in Years, What Do I Do?

In elementary school, kids come up with creative excuses why... Read More

Tax Deduction for Alimony Payments? - Yes!

Over 50% of marriages end in divorce in the United... Read More

IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

The IRS has obtained civil injunctions against more than 100... Read More

Need an Offshore Sales Office in a Tax Free Environment?

The 100 year old investment-banking firm of... Read More

Paying Workers ? What Can You Write-Off?

As your business grows, you are going to need help.... Read More

How to Check the Status of Your Tax Refund Online

So, you were pleasantly surprised to learn that you are... Read More

Rental Property Tax Deductions

Own residential rental properties? This article discusses how income from... Read More

The Seven Deadly Tax Sins: Commonly Missed Deductions

It's that time again, the April 15 tax deadline is... Read More

Need a Copy of Your Tax Return Information?

Taxpayers have two easy and convenient options for getting copies... Read More

How To Set Up A Tax-Saving Bookkeeping System

One of the most important, but least understood or appreciated... Read More

Gambling Income and Expenses - Tax Requirements

Hit a big one? With more and more gambling establishments,... Read More

Tax Help Secret: Avoiding the Entreprenuers Curse

Your days as an entrepreneur and businessperson are consumed with... Read More

Surprising Truths About Tax Preparers

Choosing the right tax preparer for your business is a... Read More

Business Tax Deductions

As we enter mid-March, taxpayers begin to become very interested... Read More

Marriage or Divorce ? Check Your Social Security Number

Newlyweds and the recently divorced should make sure that names... Read More

E-commerce Taxation

The means and types of businesses have transformed with advent... Read More

Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the... Read More