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Unauthorized Substances Tax

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  1. What is the unauthorized substances tax?
  2. Who is required to pay the tax?
  3. When is the tax due?
  4. Do I have to identify myself when I pay the tax?
  5. What should I do with the stamps that I receive after I pay the tax?
  6. Will the Department of Revenue notify law enforcement if I purchase stamps?
  7. How are unauthorized substances tax collections used?
  8. If I purchase stamps, will I then be in legal possession of the drugs?
  9. Who can I call to get an application for stamps or more information on the unauthorized substances tax?


  1. What is the unauthorized substances tax?
    The unauthorized substances tax is a state excise tax levied on controlled substances (marijuana, cocaine, crack, methamphetamine, etc.) and certain illicit alcoholic beverages (untaxed liquors and spirits).
  2. Who is required to pay the tax?
    The tax is due by any merchant, or peddler who possesses an unauthorized substance upon which the tax has not been paid as evidenced by a stamp available from the Tennessee Department of Revenue. A "merchant or peddler" is any person who possesses one or more marijuana plants or more than 42.5 grams of marijuana, seven or more grams of any other unauthorized substance that is sold by weight, 10 or more dosage units of any other unauthorized substance not sold by weight.
  3. When is the tax due?
    The tax is payable within 48 hours after the dealer acquires actual or constructive possession of a non-tax-paid unauthorized substance, exclusive of Saturdays, Sundays, and legal holidays of this state, in which case the tax is payable on the next working day. If a dealer is found in possession of a taxable substance, it will be presumed he/she had possession of the substance for more than 48 hours. Penalty and interest will be assessed pursuant to the provisions of Tennessee Code Annotated, Title 67, Chapter 1, Part 8.
  4. Do I have to identify myself when I pay the tax?
    No. Individuals who purchase stamps from the department of revenue are not required to give their name, address, Social Security number, or any other identifying information.
  5. What should I do with the stamps that I receive after I pay the tax?
    The stamps must be permanently affixed to the unauthorized substance. Once the tax due has been paid and the stamps affixed, no additional tax is due even though the unauthorized substance may be handled or possessed by other individuals in the future.
  6. Will the Department of Revenue notify law enforcement if I purchase stamps?
    No. Information obtained pursuant to the unauthorized substances tax law is strictly confidential and may not be disclosed or used in a criminal prosecution other than a prosecution for a violation of the unauthorized substances tax law.
  7. How are unauthorized substances tax collections used?
    Once the funds have become unencumbered, 75 percent of the tax proceeds will be returned to the state or local law enforcement agency that conducted the investigation that led to the assessment. The proceeds are to be used by those law enforcement agencies to combat, prevent and reduce drug crimes. The remaining 25 percent of the tax proceeds will be credited to the state's general fund.
  8. If I purchase stamps, will I then be in legal possession of the drugs?
    No, purchasing stamps only fulfills your civil tax obligation. You will still be subject to the criminal statutes of Tennessee for possessing the drugs.
  9. Who can I call to get an application for stamps or more information on the unauthorized substances tax?
    The Tennessee Department of Revenue using one of the following numbers:
    • Statewide toll-free: (800) 342-1003
    • Nashville-area and out-of-state: (615) 253-0600