Unauthorized Substances Taxes Brings In More Than $1.7 Million In Year Two Of Implementation

NASHVILLE, Tenn. - During the second year of Tennessee’s unauthorized substances tax, the Tennessee Department of Revenue collected $1,773,535 and assessed $43,187,787. Year one of the unauthorized substances tax resulted in $1,714,565 in collections and $32,172,918 in assessments. Created by Public Chapter 803 and effective Jan. 1, 2005, the tax applies to controlled substances and certain illicit alcoholic beverages, including cocaine, crack, methamphetamine, marijuana, moonshine, and non-tax-paid liquor.

“The Department of Revenue continues to successfully administer the unauthorized substances tax. Our ongoing effective implementation of this tax plays a crucial role in achieving the law’s primary purpose: to channel funds collected into local law enforcement agencies to help combat, prevent and reduce drug crimes in Tennessee,” said Revenue Commissioner Loren L. Chumley.

The purchase of unauthorized substances tax stamps is a confidential process. Dealers are not required to provide the department with any identifying information. Additionally, any 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. If caught with unauthorized substances that do not have stamps, the Department of Revenue will collect all taxes due on those substances. Purchasing stamps does not in any way provide immunity from criminal prosecution.

For more information, visit Revenue’s Web site, www.Tennessee.gov/revenue, or call(615) 741-7071. For an application for stamps, call statewide toll-free (800) 342-1003 or (615) 253-0600 if in the Nashville area or outside Tennessee.

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2005-2006 fiscal year, the department collected $10.3 billion in state taxes and fees. In addition to collecting state taxes, $1.8 billion of local sales tax was collected by the department for local governments during the 2005-2006 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.Tennessee.gov/revenue.