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Marijuana in Minn. Taxed Since 1986, But Few Pay up

Updated: 03/05/2014 5:23 PM
Created: 03/05/2014 5:20 PM WDIO.com
By: Stephen Tellier, KSTP

As lawmakers debate whether to legalize medical marijuana, many Minnesotans likely don't realize pot is already technically taxed in our state. The problem is, hardly anyone ever pays up.

It's a little-known law that basically relies on drug dealers to voluntarily hand over taxes on their drugs. The law applies to anyone in Minnesota with more than 42.5 grams of pot. It was passed in 1986, and it seems very few people have thought about it since.

"How can it be taxed if it's not legal?" asked Amelia Koenig in Woodbury.

The law imposes a tax of $3.50 on every gram of marijuana. Controlled substances are also taxed at $200 per gram. How do you pay the tax? You submit a simple form to the Minnesota Department of Revenue.

There's no need to be nervous -- writing your name is optional. The law states the form is confidential, and can not be used against you in a court of law. You prove you paid the tax with a marijuana tax stamp, of course. If you possess marijuana that doesn't have a tax stamp on it, you're breaking the law -- in addition to possessing marijuana in the first place.

Since 1986, the DOR has sold 2,079 such stamps, bringing in a grand total of $11,271. It's not much -- but it's still about $11,000 more than most folks would have guessed.

"If these are just people on the streets that are selling it, I doubt they're going to go and get a sticker to put on their baggie when they could just sell it and make a lot of money all for themselves," Koenig said.

State officials want to emphasize that just because marijuana is taxed, that does not make it legal. The penalties for possessing drugs without tax stamps include a fine of up to $14,000 and up to seven years in prison -- on top of other drug charges.

Criminal defense attorneys we spoke with tell us local suspects are rarely charged with failing to pay drug taxes. However, one Minnesota defendant convicted of selling drugs and failing to pay taxes on those same drugs appealed to the state supreme court. He argued he was sentenced for two drug crimes when he only committed one. He lost that argument in 2011.

A marijuana law reform group says about 20 states have stamp tax laws similar to the in place in Minnesota, although the details of those laws vary from state to state.

The bill to legalized medical marijuana cleared its first legislative hurdle Tuesday night when the House Health and Human Services Committee voted to send it to another committee.

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