Charged With Sale Or Possession Of Marijuana In Alabama? What Should You Know About Your Tax Obligations?

1 June 2016
 Categories: Law, Articles


If you're an Alabama resident who has recently been arrested and charged with the possession or intent to distribute marijuana, you may be concerned about your ability to defend yourself in a state that boasts some of the country's harshest drug laws. Adding insult to injury, if you're convicted of a drug-related crime and haven't yet had the chance to purchase tax stamps for your haul prior to your arrest, you could even be prosecuted for tax evasion for failure to pay tax on a drug that's illegal under state law. Read on to learn more about how conviction of a drug crime in Alabama could carry some hefty tax consequences, as well as what you may be able to do to minimize the costs and penalties paid. 

How do Alabama's tax laws apply to illegal drugs?

Alabama wants to ensure it's receiving the proper amount of tax revenue from all business that takes place within the state -- even if that business is illegal. This means that the sale of marijuana, bootlegged moonshine, and other illegal drugs can still subject the seller to the same tax rates as those imposed for the sale of clothing or a new vehicle. The quickest way to pay taxes on an illicit item is to apply for a tax stamp from the Alabama Department of Revenue. This process can even be accomplished via mail for those who are worried about exiting the Department of Revenue building to the sight of police cruisers. 

However, applying for a marijuana tax stamp (or stamps) with a state enforcement agency, even by mail, can be seen as a dead giveaway that the applicant is up to some illegal activity. As a result, very few individuals in possession of illegal drugs have gone to the effort of paying taxes on these drugs, leading the state toward different (and more successful) enforcement efforts like asset forfeiture.

Asset forfeiture allows law enforcement to seize not only any illegal drugs or other substances, but cash and other assets deemed to be proceeds of illicit activity. Because asset forfeiture is a type of civil proceeding, rather than a criminal case, the process operates independently of a criminal conviction -- you may still be subject to forfeiture of cash or other assets deemed to be proceeds of a marijuana sale even if you're later acquitted of the underlying crime. 

What may happen to you if you've been accused of the sale or possession of marijuana? 

Alabama has some fairly strict mandatory minimum sentences for marijuana possession and distribution -- in fact, if you're charged with the intent to distribute any amount of marijuana, no matter how small, you could be convicted of a felony and subject to a mandatory 366-day prison sentence. You may also face the loss of any cash or other assets seized at the time of your arrest, even if you're successful at refuting the criminal charges levied against you. As a result, you'll want to enlist an experienced criminal defense attorney who also has some history of overturning asset forfeiture proceedings. If this is your first arrest and you have an otherwise clean record, your attorney may be able to negotiate your potential conviction down to a misdemeanor level, helping you avoid minimum jail sentences and the other stiffer penalties that accompany a felony. 

For situations in which the assets seized were not related to the sale or distribution of marijuana, you'll want to quickly begin to track the source of this money so that you can establish your claim to it. For example, if you had a large amount of cash on hand because you recently rolled over a retirement account or made a withdrawal for the purchase of a motorcycle or ATV, you'll need to be able to show solid evidence (like deposit slips or even a series of text messages between you and the motorcycle seller) that these funds were not used or intended for illicit purposes. Since state laws can vary, talk to a local lawyer like Jeffrey D. Larson, Attorney at Law for help with your particular case.