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Excise tax allowed on couple's marijuana

January 1, 2007
The Indiana Tax Court granted summary judgment in favor of the Indiana Department of State Revenue in a controlled-substance excise-tax case, ruling Monday that charging the tax does not apply to Indiana's joinder and successive prosecution statutes.

In John David Harrison and Jennifer A. Harrison v. Indiana Department of State Revenue, No.49T10-0409-TA-44, the Harrisons appealed the final determination of the Department of State Revenue, which assessed them with a controlled-substance excise tax (CSET) on the nearly 6,500 grams of marijuana police found in their home. Both John and Jennifer entered plea agreements with the state, in which the state agreed to dismiss criminal charges against them if they completed the agreement's terms. Jennifer was to submit to random drug testing, pay a fine, and not commit any criminal offenses for a year. John received a fine and probation.

Nine months later, after the department received written notice from the Fayette County prosecutor about the plea agreements, the department assessed the CSET against Harrisons for nearly $50,000; the department collected $1,501.75 from the Harrisons. In Sept. 2004, the Harrisons filed an original tax appeal and both sides filed for summary judgment.

The Harrisons argued that they couldn't be assessed the CSET because they were already charged criminally and applying the CSET would be double jeopardy. They also argued the Indiana joinder and successive prosecution statutes apply to CSET proceedings, and CSET assessment is barred because those proceedings were initiated subsequent to their criminal prosecutions.

Judge Thomas Fisher disagreed with the Harrisons' argument. Unless the Indiana General Assembly has defined something as a crime, then an individual's conduct cannot constitute a crime, and the General Assembly has not "exercised such authority with respect to the CSET," he wrote in the opinion.

The CSET is intended to be an addition to any criminal penalties under Indiana Code 35-48-4 and is primarily civil in nature. Summary judgment was granted in favor of the state.
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