GENERAL ASSEMBLY OF NORTH CAROLINA
1995 SESSION
CHAPTER 340
AN ACT TO REVISE THE CONTROLLED SUBSTANCE EXCISE TAX.
The General Assembly of North Carolina enacts:
Section 1. Article 2D of Chapter 105 of the General Statutes reads as rewritten:
"ARTICLE 2D.
"Schedule B-D. Controlled Substance Tax.
"§ 105-113.105. Purpose.
The purpose of this Article is to levy an excise tax on
persons who possess controlled substances and counterfeit controlled substances
in violation of North Carolina law and to provide that a person who possesses
such substances in violation of this Article is guilty of a felony. to
generate revenue for State and local law enforcement agencies and for the
General Fund. Nothing in this Article may in any manner provide
immunity from criminal prosecution for a person who possesses an illegal
substance.
"§ 105-113.106. Definitions.
The following definitions apply in this Article:
(1) Controlled Substance. - Defined in G.S. 90-87.
(2) Counterfeit
Controlled Substance. - Defined in G.S. 90-87.
(3) Dealer. - A person who
in violation of G.S. 90-95 possesses, delivers, sells, or manufactures actually
or constructively possesses more than 42.5 grams of marijuana, or seven
or more grams of any other controlled substance or counterfeit controlled
substance that is sold by weight, or 10 or more dosage units of any other
controlled substance or counterfeit controlled substance that is not
sold by weight.
(4) Deliver. -
Defined in G.S. 90-87.
(4a) Reserved.
(4b) Reserved.
(4c) Low-street-value drug. - Any of the following controlled substances:
a. An anabolic steroid as defined in G.S. 90-91(k).
b. A depressant described in G.S. 90-89(d), 90-90(d), 90-91(b), or 90-92(a).
c. A hallucinogenic substance described in G.S. 90-89(c) or G.S. 90-90(e).
d. A stimulant described in G.S. 90-89(e), 90-90(c), 90-91(j), 90-92(d), or 90-93(a)3.
e. A controlled substance described in G.S. 90-91(c), (d), or (e), 90-92(c), (e), or (f), or 90-93(a)1.
(5) Manufacture.
- Defined in G.S. 90-87.
(6) Marijuana. -
Defined in G.S. 90-87. All parts of the plant of the genus
Cannabis, whether growing or not; the seeds of this plant; the resin extracted
from any part of this plant; and every compound, salt, derivative, mixture, or
preparation of this plant, its seeds, or its resin.
(7) Person. - Defined in G.S. 105-228.90.
(8) Secretary. - The
Secretary of the Department of Revenue. Defined in G.S. 105-228.90.
"§ 105-113.107. Excise tax on controlled substances.
An excise tax is levied on controlled substances and
counterfeit controlled substances possessed possessed, either actually
or constructively, by dealers at the following rates:
(1) At the rate of forty cents (40¢) 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.
(1a) At the rate of three
dollars and fifty cents ($3.50) for each gram, or fraction thereof, of marijuana
or counterfeit marijuana. marijuana, other than separated stems and
stalks taxed under subdivision (1) of this section.
(2) At the rate of two
hundred dollars ($200.00) for each gram, or fraction thereof, of any other
controlled substance or counterfeit controlled substance that is sold by
weight.
(2a) At the rate of fifty dollars ($50.00) for each 10 dosage units, or fraction thereof, of any low-street-value drug that is not sold by weight.
(3) At the rate of four
hundred dollars ($400.00) for each 10 dosage units, or fraction thereof, of any
other controlled substance or counterfeit controlled substance that is
not sold by weight.
A quantity of marijuana or other controlled substance is measured by the weight of the substance whether pure or impure or dilute, or by dosage units when the substance is not sold by weight, in the dealer's possession. A quantity of a controlled substance is dilute if it consists of a detectable quantity of pure controlled substance and any excipients or fillers.
"§ 105-113.107A. Exemptions.
(a) Authorized Possession. - The tax levied in this Article does not apply to a controlled substance in the possession of a dealer who is authorized by law to possess the substance. This exemption applies only during the time the dealer's possession of the substance is authorized by law.
(b) Certain Marijuana Parts. - The tax levied in this Article does not apply to the following marijuana:
(1) Harvested mature marijuana stalks when separated from and not mixed with any other parts of the marijuana plant.
(2) Fiber or any other product of marijuana stalks described in subdivision (1) of this subsection, except resin extracted from the stalks.
(3) Marijuana seeds that have been sterilized and are incapable of germination.
(4) Roots of the marijuana plant.
"§ 105-113.108. Reports; revenue stamps.
The Secretary shall issue stamps to affix to controlled
substances and counterfeit controlled substances to indicate payment of
the tax required by this Article. Dealers shall report the taxes payable
under this Article at the time and on the form prescribed by the
Secretary. Dealers are not required to give their name, address, social
security number, or other identifying information on the form. Upon
payment of the tax, the Secretary shall issue stamps in an amount equal to the
amount of the tax paid. Taxes may be paid and stamps may be issued either
by mail or in person.
"§ 105-113.109. When tax payable.
The tax imposed by this Article is payable by any dealer who actually
or constructively possesses a controlled substance or counterfeit
controlled substance in this State upon which the tax has not been paid, as
evidenced by a stamp. The tax is payable within 48 hours after the dealer
acquires actual or constructive possession of a non-tax-paid controlled substance
or counterfeit controlled substance, exclusive of Saturdays, Sundays, and
legal holidays of this State, in which case the tax is payable on the next
working day. Upon payment of the tax, the dealer shall permanently affix
the appropriate stamps to the controlled substance. Once the tax due on a
controlled substance or counterfeit controlled substance has been paid,
no additional tax is due under this Article even though the controlled
substance or counterfeit controlled substance may be handled by other
dealers.
"§
105-113.110. Violations of Article a felony.
(a) A dealer
who possesses marijuana or any other controlled substance or counterfeit
controlled substance upon which the tax due under this Article has not been
paid, as evidenced by a stamp, is guilty of a Class I felony.
(b) Notwithstanding
any other provision of law, no prosecution for a violation of this Article
shall be barred before the expiration of six years after the date of the
violation.
"§ 105-113.110A. Interest and penalty.
The tax due under this Article shall bear interest at the rate
established pursuant to G.S. 105-241.1(i)from the date due until paid. In
addition, a dealer who neglects, fails, or refuses to pay the tax due under
this Article is liable for a penalty equal to one hundred percent (100%) fifty
percent (50%) of the tax.
"§ 105-113.111. Assessments.
(a)
Notwithstanding any other provision of law, an assessment against a dealer who
possesses a controlled substance to which a stamp has not been affixed as
required by this Article shall be made as provided in this section. The
Secretary shall assess a tax, applicable penalties, and interest based on
personal knowledge or information available to the Secretary. The Secretary
shall notify the dealer in writing of the amount of the tax, penalty, and
interest due, and demand its immediate payment. The notice and demand shall be
either mailed to the dealer at the dealer's last known address or served on the
dealer in person. If the dealer does not pay the tax, penalty, and interest
immediately upon receipt of the notice and demand, the Secretary shall collect
the tax, penalty, and interest pursuant to the procedure set forth in G.S.
105-241.1(g) for jeopardy assessments or the procedure set forth in G.S.
105-242, including causing execution to be issued immediately against the
personal property of the dealer dealer, unless the dealer files
with the Secretary a bond in the amount of the asserted liability for the tax,
penalty, and interest. The Secretary shall use all means available to collect
the tax, penalty, and interest from any property in which the dealer has a
legal, equitable, or beneficial interest. The dealer may seek review of the
assessment as provided in Article 9 of this Chapter.
(b) Reserved.
"§ 105-113.112. Confidentiality of information.
Notwithstanding any other provision of law, information obtained pursuant to this Article is 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 may not be used in a criminal prosecution other than a prosecution for a violation of this Article. A person who discloses information obtained pursuant to this Article is guilty of a Class 1 misdemeanor. This section does not prohibit the Secretary from publishing statistics that do not disclose the identity of dealers or the contents of particular returns or reports.
"§ 105-113.113. Use of tax proceeds.
(a) Special Account. - The Secretary shall credit the proceeds of the tax levied by this Article to a special nonreverting account, to be called the State Controlled Substances Tax Account, until the tax proceeds are unencumbered. The Secretary shall remit the unencumbered tax proceeds as provided in this section on a quarterly or more frequent basis. Tax proceeds are unencumbered when either of the following occurs:
(1) The tax has been fully paid and the taxpayer has no current right under G.S. 105-267 to seek a refund.
(2) The taxpayer has been notified of the final assessment of the tax under G.S. 105-241.1 and has neither fully paid nor timely contested the tax under G.S. 105-241.1 through G.S. 105-241.4 or G.S. 105-267.
the taxpayer no longer has a current right to challenge the
assessment of the tax.
(b) Distribution.
- The Secretary shall, on a quarterly basis, remit the unencumbered tax
proceeds as follows: shall remit seventy-five percent (75%) of the amount
part of the unencumbered tax proceeds that was collected by
assessment shall be remitted to the State or local law enforcement
agency that conducted the investigation of a dealer that led to the assessment;
and the remainder of the unencumbered tax proceeds shall be credited to the
General Fund. assessment. If more than one State or local law
enforcement agency conducted the investigation, the Secretary shall determine
the equitable pro rata share for each agency based on the contribution
each agency made to the investigation. The Secretary shall credit the remaining
unencumbered tax proceeds to the General Fund.
(c) Refunds. - The refund of a tax that has already been distributed shall be drawn initially from the State Controlled Substances Tax Account. The amount of refunded taxes that had been distributed to a law enforcement agency under this section and any interest shall be subtracted from succeeding distributions from the Account to that law enforcement agency. The amount of refunded taxes that had been credited to the General Fund under this section and any interest shall be subtracted from succeeding credits to the General Fund from the Account."
Sec. 2. Prosecutions for offenses committed before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.
This act does not affect the rights or liabilities of the State, a taxpayer, or another person arising under a statute amended or repealed by this act before its amendment or repeal; nor does it affect the right to any refund or credit of a tax that would otherwise have been available under the amended or repealed statute before its amendment or repeal.
Sec. 3. The amendments to G.S. 105-113.113 made in this act become effective July 1, 1995, and apply to taxes collected on or after that date. The remainder of this act becomes effective October 1, 1995, and applies to substances acquired on or after that date.
In the General Assembly read three times and ratified this the 28th day of June, 1995.
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Dennis A. Wicker
President of the Senate
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Harold J. Brubaker
Speaker of the House of Representatives