Iowa Touts Illegal Drug Stamp Tax

Drug stamp taxes aren't new. But Iowa is making a killing on them. They've added some new twists and are raking in the dough.

Iowa law taxes all illegal drugs - from marijuana to cocaine. The state issues stamps, which vary in cost and color according to the drug, to be affixed to the drug to show the tax has been paid.

The stamps cost $5 a gram for marijuana, $750 per marijuana plant, $250 a gram for other drugs and $400 per 10 doses of drugs that come in tablet form, such as ecstasy. The minimum charge is $215.

Some may get a good chuckle out of the idea of drug users trotting down to the revenue department to buy a tax stamp - only seven batches of stamps have been sold (none were sold last year) - but the state is making a small fortune off of those who get caught without them.

In 2002, Iowa took in $1.3 million in drug stamp tax penalties and revenues.

In Iowa, failure to affix a drug stamp is punishable by up to five years in prison and a $7,500 fine - for those who aren't habitual offenders. The civil penalty is two times what the person would have paid to get a stamp; interest accrues at 7 percent a year from the day of assessment.

23 other states have a drug stamp tax but have not figured out how to implement it, without running into a probem with the fifth amendment privilege against self-incrimination. In Iowa, it's not an issue: the purchasers of the stamps remain anonymous.

"If someone came in and purchased and it was obvious that they were making a purchase to actually put on their drugs, drug containers, we would not" call authorities, which the law prohibits, Mulvey said. "People come in to make a purchase, we keep our mouths shut

Iowa also wastes no money going after the indigent. They don't pursue those in prison or without assets. They did get $119k out of a college president. And they don't collect on out of state residents.

Protestors of the tax sound a familiar refrain: "No taxation without legalization."

Marijuana activist James Getman... attended "The Greater Mississippi River Valley Tea Party" held in Rock Island, Ill., about 10 years ago to protest the tax. "It was like the Boston tea party, we (were) rebelling against an unjust tax," said Getman, director of Iowa Norml, a nonprofit organization supporting the reform of marijuana laws.