McMullin v. South Carolina Dept. of Revenue and Taxation

• Decision Date: 21 March 1995
• Docket Number: No. 24409,24409
• Citation: 469 S.E.2d 600,321 S.C. 475
• Court: South Carolina Supreme Court
• Parties: Demetric S. McMULLIN, Respondent/Plaintiff, v. SOUTH CAROLINA DEPARTMENT OF REVENUE AND TAXATION, Petitioner/Defendant. . Heard

Page 600

469 S.E.2d 600

321 S.C. 475

Demetric S. McMULLIN, Respondent/Plaintiff, v. SOUTH CAROLINA DEPARTMENT OF REVENUE AND TAXATION Petitioner/Defendant.

No. 24409.

Supreme Court of South Carolina.

Heard March 21, 1995.

Decided April 15, 1996.

Rehearing Denied May 14, 1996.

[321 S.C. 476] Attorney General T. Travis Medlock, Chief Deputy Attorney General Ray N. Stevens and Assistant Attorney General Jeffrey M. Nelson, Columbia, for Petitioner-Defendant.

W. Patrick Yon, of Yon & Yon, Anderson, for Respondent-Plaintiff.

IN THE ORIGINAL JURISDICTION

CHANDLER, Acting Associate Justice.

We agreed to hear this case in our original jurisdiction to determine whether application of the South Carolina Marijuana and Controlled Substance Tax Act, S.C.Code Ann. §§ 12-21-5010 to -6050 (Supp.1994), violated plaintiff's constitutional right not to be twice put in jeopardy for the same offense.

FACTS

The South Carolina Marijuana and Controlled Substance Tax Act was enacted in 1993 and went into effect on July 1 of that year. See Act No. 164, Part II, § 70A, 1993 S.C.Acts 1242. As written, the Act imposes a tax on marijuana and other controlled substances at the rate of $3.50 per gram of marijuana; $200 per gram of controlled substance; and $2,000 on each fifty dosage units of a controlled substance that is not sold by weight. S.C.Code Ann. § 12-21-5090 (Supp.1994). The taxes imposed under the Act are due and payable immediately upon acquisition or possession in this State by a "dealer." S.C.Code Ann. § 12-21-6020 (Supp.1994). "Dealer" is defined in the Act as "a person who in violation of the laws of this State manufactures, produces, ships, transports, or imports into South Carolina or in any manner acquires or possesses more than forty-two and one-half grams of marijuana, or seven or more grams of a controlled substance, or ten or more dosage units of a controlled substance which is not sold by weight." S.C.Code Ann. § 12-21-5020(3) (Supp.1994).

The Act specifically prohibits a dealer from possessing any marijuana or controlled substance upon which a tax is imposed unless the tax has been paid, as evidenced by a stamp or other official indicia affixed to the substance or container holding the substance. S.C.Code Ann. § 12-21-5050 (Supp.1994). Any dealer found in violation of the Act must pay the unpaid tax and a penalty of one hundred percent. S.C.Code Ann. § 12-21-6000 (Supp.1994). Further, § 12-21-6000 provides that a dealer who fails to affix the required stamps, labels, or other official indicia is subject to misdemeanor charges.

On February 5, 1994, Demetric S. McMullin was arrested for possession of 197 grams of cocaine and 23 grams of crack cocaine. At the time of his arrest, there were no tax stamps or other official indicia evidencing that the tax imposed under the Marijuana and Controlled Substance Tax Act had been paid on the cocaine and crack cocaine. McMullin was subsequently charged and convicted in General Sessions court for possession and distribution of illegal narcotics.

On May 6, 1994, the Department of Revenue and Taxation (the Department) issued and mailed to McMullin a notice of assessment and a warrant for distraint indicating he owed a total of $21,239.13 in taxes, penalties, interest, and costs for failing to pay the tax on the cocaine and crack cocaine found in his possession. The Department later sent McMullin a revised notice of assessment and warrant indicating the total owed was $105,207.50. See S.C.Code Ann. § 12-54-120 (Supp.1994). ¹

Thereafter, McMullin brought this action in circuit court pursuant to S.C.Code Ann. § 12-21-2990 (1976), challenging the Department's assessment and warrant. By order dated October 4, 1994, we granted the parties' joint request to remove the case from circuit court and entertain it in our original jurisdiction.

ISSUE

Did application of the Marijuana and Controlled Substance Tax Act violate McMullin's constitutional right not to be twice put in jeopardy for the same offense.

DISCUSSION

Relying on the Supreme Court's recent decision in Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994), McMullin argues the assessment of taxes under the South Carolina Marijuana and Controlled Substance Tax Act is prohibited by the Constitution's Double Jeopardy Clause because the State had previously imposed a criminal penalty upon him for possessing the drugs. ² We disagree.

The Fifth Amendment to the United States Constitution provides that "No person shall ... be subject for the same offence to be twice put in jeopardy of life or limb...." U.S. Const. amend. V. This double jeopardy clause protects against a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense. Kurth Ranch, supra; see also North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969); State v. Walsh, 300 S.C. 427, 388 S.E.2d 777 (1988).

In concluding that the tax imposed on the respondents in Kurth Ranch was a second punishment prohibited by the Double Jeopardy Clause, the Supreme Court cited two "unusual features" of Montana's Dangerous Drug Tax Act which set it apart from most tax statutes. First, the tax levied under the Act is exacted only after the taxpayer has been arrested for the conduct that gave rise to the tax obligation. As the Court stated, "[p]ersons who have been arrested for possessing marijuana [or other drugs covered by Montana's Tax Act] constitute the entire class of taxpayers subject to the Montana tax." Id. at ----, 114 S.Ct. at 1947, 128 L.Ed.2d at 780. Second, the tax is levied on goods the taxpayer neither owns nor possesses when the tax is imposed.

Finding that these features have an unmistakable punitive character, the Supreme Court concluded that, "[t]aken as a whole, [the tax imposed under Montana's Dangerous Drug Tax Act] is a concoction of anomalies, too far-removed in crucial respects from a standard tax assessment to escape characterization as punishment for the purpose of Double Jeopardy analysis." Id. at ----, 114 S.Ct. at 1948, 128 L.Ed.2d at 781. This conclusion, however, cannot be reached regarding the tax imposed under the South Carolina Marijuana and Controlled Substance Tax Act.

A review of the South Carolina Act clearly indicates it does not contain the "unusual features" cited by the Kurth Ranch majority. Under the provisions of the South Carolina Act, the tax is imposed whether or not the taxpayer has been arrested for possession of the controlled substance. See S.C.Code Ann. §§ 12-21-5020 and 12-21-5090 (Supp.1994). In other words, the class of taxpayers is not defined by the actions of law enforcement personnel. ³ Further, under the South Carolina Act, the tax is based on actual possession. S.C.Code Ann. § 12-21-6020(B) (Supp.1994).

Given these characteristics of the South Carolina Marijuana and Controlled Substance Tax Act, we hold that the tax imposed on McMullin pursuant to the Act did not constitute a punishment under the Supreme Court's opinion in Department of Revenue of Montana v. Kurth Ranch, supra. We therefore find no double jeopardy violation and render judgment for the Department of Revenue and Taxation. ⁴

JUDGMENT FOR DEFENDANT.

TOAL, MOORE and WALLER, JJ., concur.

FINNEY, C.J., dissenting in separate opinion.

FINNEY, C.J.:

I respectfully dissent. The focus of this case is whether the Marijuana and Controlled Substance Tax Act has punitive characteristics that subject it to the constraints of the Double Jeopardy Clause. The United States Supreme Court in Department of...