Nebraska Drug Tax Stamp not a source of revenue, but a prosecution and enforcement tool

(Source: Bayley Bischof)
(Source: Bayley Bischof)(KOLNKGIN)
Published: Feb. 7, 2020 at 6:08 PM CST
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A little known fact about Nebraska law is that drug dealers are required to pay taxes on their illegal drugs, and when they don't it can mean an additional charge if they're caught.

The charge, failure to have a drug tax stamp, can be avoided if dealers stop by the Department of Revenue in the State Office Building and ask for the stamp. It's a request, they don't get very often.

"Maybe just a few times a year," Lydia Brasch, legislative liaison for the Department of Revenue said.

The stamp has only been purchased 225 times since its creation in 1991.

The purchase is anonymous. The only information the department needs is the type of drug, how much you're selling and what increments you're selling it in.

Though its a tax, Brasch said it was never meant to be a source of revenue for the state.

In about 30 years, its raised $14,050 in tax stamp sales, and about $1.5 million in money dealers have been required to pay back to the state, according to the Associated Press.

"It's a prosecution too," Brasch said.

Though it's not used much by local law enforcement. Lincoln police gave the ticket five times in 2019. Lancaster County Sheriff's deputies gave the ticket 35 times in 2019. Sheriff Terry Wagner said it's not used very widely, but it's useful in certain cases. He said they can use it to put a dealer behind bars while waiting for lab tests on confiscated drugs.

But really, it's about the money. Not as a source of revenue, but a form of punishment.

"People sell drugs for money, not to be nice, so if you can impact proceeds it might slow them down," Wagner said.

Local defense attorney said it's a cash-grab, but not a very effective one. Justin Kalemkiarian, with Berry Law Firm said it creates more felons and could exacerbate the state's prison overcrowding problem.

"If the person is to be arrested again, they'll have one more felony, then all the sudden bonds are up, criminal history looks worse and people are going to sit in jail longer," Kalemkiarian said.

Wagner said the ticket doesn't often come with additional jail time and shouldn't impact prison times. When asked if it was fair to tax an illegal substance, Wagner didn't have an answer, but he did say people need to understand that dealing drugs isn't a victimless crime.

"Violent crime in Lincoln, in Lancaster County, and Omaha I'm sure is narcotics related in a majority of cases," Wagner said.