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2007 SESSION
075079340Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Chapter 17 of Title 58.1 an article numbered 8, consisting of sections numbered 58.1-1731 through 58.1-1739, as follows:
§ 58.1-1731. Title.
This article shall be known and may be cited as the "Virginia Illegal Substances Excise Tax Act."
§ 58.1-1732. Administration of article.
The Tax Commissioner shall administer and enforce the assessment and collection of the taxes and penalties imposed by this article.
§ 58.1-1733. Imposition of illegal substances excise tax.
A. There is hereby levied and imposed an excise tax upon individuals possessing, either actually or constructively, the following illegal substances:
1. Schedules I and II controlled substances, as defined in § 18.2-247;
2. Marijuana, as defined in § 18.2-247; and
3. Illegally manufactured alcoholic beverages as described in § 4.1-300.
B. The tax on illegal substances shall be imposed at the rates as follows:
1. Forty cents for each gram, or fraction thereof, of harvested marijuana stems and stalks that have been separated from and are not mixed with any other parts of the marijuana plant;
2. Three dollars and fifty cents for each gram, or fraction thereof, of marijuana, other than the separated stems and stalks taxed under subdivision B 1;
3. Fifty dollars for each gram, or fraction thereof, of cocaine;
4. Two hundred dollars for each gram, or fraction thereof, of any other Schedule I or II controlled substance that is sold by weight;
5. Two hundred dollars for each 10 dosage units, or fraction thereof, of any other Schedule I or II controlled substance that is not sold by weight; and
6. Twenty dollars for each gallon of illegally manufactured alcoholic beverage.
§ 58.1-1734. Exemptions.
The tax imposed under this article shall not apply to an illegal substance in the possession of an individual who is authorized by law to possess the substance. This exemption applies only while the individual's possession is authorized by law.
§ 58.1-1735. Revenue stamps and reports.
A. The Tax Commissioner shall issue revenue stamps to be affixed to the illegal substances to indicate payment of the tax required by this article. Individuals possessing illegal substances who are required to obtain the stamps shall report the taxes payable at the time and on the form prescribed by the Tax Commissioner. Individuals shall not be required to give their name, address, social security number, or other identifying information on the form. Upon payment of the tax, the Tax Commissioner shall issue stamps in an amount equal to the amount of the taxes paid. The taxes may be paid and stamps may be issued either by U.S. mail or in person.
B. Every state and local law-enforcement agency in the Commonwealth shall file a report with the Department within 48 hours after (i) seizing an illegal substance listed in this article upon which a revenue stamp has not been affixed or (ii) making an arrest of an individual in possession of an illegal substance listed in this article upon which a revenue stamp has not been affixed. The report must be in the form prescribed by the Tax Commissioner and must include the time and place of the seizure or arrest; the amount, location, and kind of substance; the identification, including social security number, of the individual in possession of the substance; and any other information prescribed by the Tax Commissioner. The report shall be filed with the Department when the arrest or seizure involves any of the following illegal substances upon which a stamp has not been affixed:
1. More than 42.5 grams of marijuana;
2. Seven or more grams of any other Schedule I or II controlled substances that are sold by weight;
3. Ten or more dosage units of any other Schedule I or II controlled substances that are not sold by weight; and
4. Any illegally manufactured alcoholic beverage.
§ 58.1-1736. When tax payable.
The tax imposed under this article is payable by any individual who actually or constructively possesses an illegal substance in the Commonwealth upon which the tax has not been paid, as evidenced by a revenue stamp. The tax is payable within 48 hours after the individual acquires possession of an illegal substance, exclusive of Saturdays, Sundays, and legal holidays of the Commonwealth, in which case the tax is payable on the next working day. Upon payment of the tax, the individual shall permanently affix the revenue stamps to the illegal substance. Once the tax due on an illegal substance has been paid, no additional tax is due under this article even though the illegal substance may be handled by other individuals.
§ 58.1-1737. Assessments.
Notwithstanding any other provision of law, the Tax Commissioner shall assess the tax, applicable penalties, and interest based on personal knowledge or information available to him, against an individual who possesses an illegal substance to which a stamp has not been affixed. The Tax Commissioner shall notify the individual possessing an illegal substance in writing of the amount of tax, penalty, and interest due, and demand its immediate payment. The notice and demand shall be either mailed to his last known address or served on the individual in person. If the individual possessing an illegal substance does not pay immediately upon receipt of the notice and demand, the Tax Commissioner shall collect the amount due pursuant to § 58.1-631 for jeopardy assessments, unless the individual files with the Tax Commissioner a bond in the amount of the asserted liability for the tax, penalty, and interest. The individual may seek review of the assessment as provided in Article 2 (§ 58.1-1820 et seq.) of Chapter 18.
§ 58.1-1738. Confidentiality of information; penalty.
Notwithstanding any other provision of law, information obtained pursuant to this article shall be confidential and may not be disclosed or, unless independently obtained, used in a criminal prosecution other than a prosecution for a violation of this article. Stamps issued pursuant to this article shall not be used in a criminal prosecution other than a prosecution for a violation of this article. An individual who discloses information obtained pursuant to this article shall be guilty of a Class 1 misdemeanor. This section shall not prohibit the Tax Commissioner from publishing statistics that do not disclose the identity of individuals possessing illegal substances or particular returns or reports.
§ 58.1-1739. Distribution of illegal substances tax revenues.
A. The Tax Commissioner shall collect the tax revenues and report the same to the State Treasurer, who shall credit the amount to a special nonreverting fund, hereby created and known as the Illegal Substances Tax Revenues Fund. The Fund revenues shall be distributed on a quarterly or more frequent basis in accordance with subsection B.
B. Seventy-five percent of the Fund revenues shall be apportioned by the Comptroller and distributed by warrants of the Comptroller drawn on the Treasurer of Virginia to the law-enforcement agencies in the Commonwealth that conducted the investigation of an individual possessing an illegal substance or substances that resulted in the tax assessment. If more than one law-enforcement agency conducted the investigation, the Tax Commissioner shall determine the equitable share for each agency based on the contribution each agency made to the investigation.
The remaining 25% of the Fund shall be credited to the Commonwealth's General Fund.
C. Any refund of a tax that has already been distributed shall be drawn from the Fund. The amount of refunded taxes that had been distributed to a law-enforcement agency under this section and any interest shall be subtracted from future distributions from the Fund to that law-enforcement agency. The amount of refunded taxes that had been credited to the General Fund in accordance with this section and any interest shall be subtracted from future credits to the General Fund from this Fund.