"'Crack tax' shot down: Supreme Court rules case violates state constitution"

The title of this post is the headline of this local article reporting on a notable split ruling from the Tennessee Supreme Court.  Here are the details:

Ruling in a case that originated in Knox County, the state Supreme Court has deemed the so-called "crack tax" enacted by the Legislature five years ago in violation of Tennessee's constitution.

Modeled after a North Carolina law, the Unauthorized Substances Tax required those who have marijuana, cocaine and other illegal drugs to buy tax stamps from the Department of Revenue, which promised confidentiality to purchasers.

People arrested with drugs could then be assessed for back taxes and penalties under the law if they couldn't produce the appropriate tax stamps. Sen. Randy McNally, R-Oak Ridge, was a leading proponent of the legislation.

The Supreme Court ruling came in a 3-2 decision with Justice Gary Wade writing the majority opinion. Joining him were Justices William M. "Mickey" Barker, who is now retired but sat on the hearing panel, and Janice Holder. Justices William Koch and Cornelia Clark voted to uphold the tax.

Basically, the majority said that illegal drugs are not subject to taxation under the state constitution, which authorizes taxes on "merchants, peddlers and privileges." The tax is on possession, they reasoned, not sales, so the possessors are not merchants or peddlers. And since possession of the products in question is outlawed, it's not a legal privilege subject to taxation.

The majority rejected arguments that the law violates the U.S. Constitution's provisions against self-incrimination and double jeopardy. In theory, that means the Legislature could revise the law -- as in making the tax apply to drug sales -- and the statute could pass legal muster.

The majority opinion in this case is available at this link, the dissenting opinion is available at this link.