TOPEKA (KSNT) – Marijuana and other drugs may be illegal in Kansas but the government still wants its cut of the profits.
The so-called “Drug Tax” ensures that drug dealers and abusers in Kansas can at least avoid tax evasion charges if and when they get busted. These stamps may seem ridiculous, but the Kansas Department of Revenue can assure you that the stamps are quite real along with the laws regulating their use.
While it may be news to some that the state of Kansas sells drug tax stamps for collecting money on the use of illegal substances, the practice became law on July 1, 1987, after being signed off on by then-Governor Mike Hayden, becoming K.S.A. 79-5201. The law was designed to collect taxes on profits from the business of distributing marijuana because these profits are typically not reported on income tax returns.
The drug tax stamp program’s history stretches as far back as the 1930s when the federal government set taxes on Marijuana with the Marihuana Tax Act of 1937 that was later overturned in 1969 with the Leary v. United States case. Since becoming law in Kansas, the constitutionality of the drug tax has been challenged five times in court starting with the State of Kansas v. Durrant & Dressel in 1989 and ending with the most recent case of Roy L. Jensen v. Edward E. Bouker, Judge, District Court of Ellis County, et al. in 2000. Each time it was ruled as to not be a violation.
Kansas is not alone in selling drug tax stamps today. While the federal law may have since been overturned, numerous states currently sell drug tax stamps according to the website Norml which includes Alabama, Connecticut, Georgia, Idaho, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Minnesota, Nebraska, Nevada, North Carolina, Oklahoma, Rhode Island, South Carolina, Tennessee, Texas, and Utah. Each state’s program differs slightly from the next, leading to a wide variety of stylish stamp designs featuring illegal drugs.
The drug tax stamps function by requiring that drug dealers and people who possess a large amount of marijuana and other controlled substances are required by law to purchase drug tax stamps equal to the value of the illegal drugs in their possession. The purchased drug tax stamps must then be placed on the packaging of the marijuana or controlled substance as soon as someone takes possession of them.
The stamps can be bought from the Department of Revenue and are valid for three months after the date of purchase. Although having Drug Tax stamps doesn’t make possession of marijuana or controlled substances legal, illegal substances found by law enforcement with expired drug tax stamps or without stamps altogether may find themselves in deeper legal trouble, facing civil or criminal penalties which could include fines, seizure of property or liens against real estate.
While this may seem like a ploy to get drug dealers or those otherwise in the possession of illegal substances to turn themselves in, the Department of Revenue doesn’t require purchasers to give a name or address when purchasing stamps. The information of those purchasing drug tax stamps cannot be shared with law enforcement or anyone else and is completely anonymous.
The stamps are sold in denominations of $10, $50, $100, $500 and $1,000 and can be bought from the Director of Taxation at the Department of Revenue’s Taxpayer Assistance Center in Topeka which can be reached at 785-296-2055 or 785-368-8222. The stamps are only valid for three months from the date of purchase and must be affixed to the substances for which the tax was paid.
The drug tax stamp’s costs are broken down below:
- Marijuana over 28 grams: $3.50 per gram or portion of a gram
- Wet domestic marijuana plants, no threshold: $0.40 per gram or portion of a gram
- Dry domestic marijuana plants, no threshold: $0.90 per gram or portion of a gram
- Controlled substances sold by weight over 1 gram: $200 per gram or portion of a gram
- Controlled substances sold by dosage units rather than by weight per 10 doses: $2,000 per 50 doses or portion thereof
So how often are drug tax stamps found in the field and what is the money collected from the program spent on?
Shawnee County Sheriff’s Office Lieutenant Todd Stallbaumer said that it’s only on rare occasions that deputies encounter drug tax stamps during their investigations. Lieutenant Manuel Munoz with the Topeka Police Department concurred by saying that the TPD hasn’t made any arrests in recent memory where they found the stamps in use by offenders.
“I have been here 28 years and heard of one time before I became an officer in 1994,” Munoz said.
Sheriff Brian Bellendir with the Barton County Sheriff’s Office said on a Facebook post that he had recently been confronted with the question of drug tax stamps in Kansas.
“After 40 years in law enforcement, I have actually never seen a drug tax stamp,” Bellendir said. “I was always told they were available from the Kansas Department of Revenue but have never seen one in my career.”
Bellendir went on to say that, according to the KDOR, the stamps are quite popular but are mostly being sold to stamp collectors and not drug dealers. Given the unique design of the stamp, with marijuana, pills, and what looks to be cocaine pictured, it is little surprise that the stamp has become a collector’s item.
The KDOR gave a breakdown of how often they are asked to sell the stamps and how much money is made off of the program. As indicated by law enforcement, drug tax stamps are a rarity as only 56 drug tax stamps were sold in the past four years from 2018 to 2021, netting the state of Kansas about $720.
However, while these numbers may seem low, the Kansas drug tax program brings in the majority of its cash by taxing those found without their stamps. In 2021 alone the state collected $255,271 from those found with marijuana and $257,835 from those found with other controlled substances for a total of $513,106 in additional revenue for the state.
The money collected from the program is split with 75% going to local governments and 25% being sent to the State General Fund of Kansas. Which local government, county, or city receives the cash collected from the program largely depends on which law enforcement agency conducted the initial arrest and where it happened. Funds collected by local governments, counties, or cities are deposited in special law enforcement trust funds native to the area where the arrest happened.
If someone is found with illegal drugs, no stamps, and not enough money to pay off the fines, then they may stand to lose their property and have their bank accounts seized. The drug tax program “allows for seizure and sale of real estate owned by the ‘dealer'” which is sold off to give the dealer credit to pay off the debt. Seized tangible property is sold at public auction with the proceeds going to a special state account.
The future of the drug tax stamp program could be in question with the possibility of marijuana being legalized in Kansas. While the stamps may continue to see use due to them also being needed for other controlled substances, it is likely that the stamps would quickly be replaced by permits and licenses for marijuana according to the KDOR.
To read through the full history of the law in Kansas and learn how it functions, go here.