The Dreaded Tax Stamp

The Revenue Act of 1918 made Narcotic stamps necessary.  The law was enacted during World War I to raise additional money to fund it.  A portion of the law was written to amend the Harrison Narcotic Law of 1914.

In this new act, the tax on narcotics was clarified.  A statement issued by the commissioner of Internal Revenue stated new stamps were to be used by importers, manufacturers, and producers of the drugs.  The stamps were to be affixed to the packages and canceled with an abbreviation of the company’s name and its registration number, proving the tax had been paid.

The tax went into effect on February 25, 1919, and placed a one-cent-per-ounce tax on substances such as opium, coca leaves, and their derivatives.  The first stamps used were Documentary stamps of 1914 hand-stamped “NARCOTIC” in magenta or black ink.  These were replaced later in the year with specific narcotic stamps.  The large majority of the stamps used the same design.  According to the regulations of the act, Narcotic stamps were to be purple and come in four sizes with various denominations.

The Narcotic Tax lasted less than 60 years before being repealed in 1971.  All other Revenue stamps fell out of use later that year.

So you may ask if it was repealed, why do we people being charged with “no drug tax stamp”?

The most lucrative targets of the “no drug tax stamp” charge are out-of-state drivers along I-80, one of the major routes for transporting marijuana through the state of Nebraska.

In addition to other charges, the State also files the crime of not purchasing a tax stamp and affixing it to the illegal drugs.

Seventeen states, including Nebraska, have drug tax stamp laws. Most people are unaware of the law until they are charged with a tax stamp violation in addition to being charged with possession of marijuana or another illegal drug. The drug tax stamp is an additional way for Nebraska to generate revenue and increase the punishment for possession of marijuana.

In addition to charging drivers with possession of illegal drugs and/or trafficking of illegal drugs, law enforcement officers are charging drivers caught in the Interstate 80 traffic stops with failing to purchase a drug tax stamp.

What is a Drug Tax Stamp?

In 1991, Nebraska passed a law requiring anyone in possession of illegal drugs to purchase a tax stamp to affix to the drugs.  The drug tax stamp does not make the drugs legal; however, you can be charged with a separate crime for failing to have the tax stamp affixed to drugs in your possession.  According to Nebraska Revised Statute 77-4302, “No dealer may possess marijuana or controlled substances upon which a tax is imposed by section 77-4303 unless the tax has been paid on the marijuana or controlled substance as evidenced by an official stamp, label, or other indicium.”

Who owes the drug tax?

A dealer is defined by the statutes as any person who “manufactures, produces, ships, transports, or imports into Nebraska or in any manner acquires or possesses six or more ounces.”  Therefore, if you have six or more ounces of marijuana or another illegal drug in your possession, you can be charged for failing to have a drug tax stamp affixed to the illegal drugs.

How much is the drug tax?

Dealers must purchase a Drug Tax Stamp from DOR which is evidence that the drug tax has been properly paid. The dealer must permanently place sufficient stamps on each container. The stamps are not trans ferable, can only be used once, may not be altered, and expire at midnight 180 days from the date of purchase.

Marijuana — the drug tax is $100 per ounce or portion of an ounce.
Controlled substances customarily sold by weight— the drug tax is $150 per gram or portion of a gram.
Controlled substances not customarily sold by weight — the drug tax is $500 for each 50-dosage unit or portion of a unit.

Purchase of the stamps does not provide immunity for a dealer from criminal prosecution under state or federal law. However, purchasers are not required to provide their name and address, or other identifying information. When information is provided, it is confidential. Obviously, very few drug tax stamps have been issued in Nebraska since 1991.

Drug tax stamps were intended as an additional penalty to punish drug dealers and individuals caught transporting marijuana and other drugs through Nebraska. 

What is the Penalty for Failure to Purchase a Drug Tax Stamp?

While the idea of a drug tax stamp may seem ridiculous, the penalties for a conviction on this charge are very serious.  Anyone failing to pay the drug tax and affix a drug tax stamp on illegal drugs is charged with a Class IV felony. The possible sentence for a conviction under a Class IV felony is five years in state prison and/or a fine of $10,000 in addition to the sentence you may receive for possession of an illegal drug.