Stennett v. State, 14-93-00303-CR

Decision Date08 June 1995
Docket NumberNo. 14-93-00303-CR,14-93-00303-CR
Citation905 S.W.2d 612
PartiesMark STENNETT, Appellant, v. The STATE of Texas, Appellee. (14th Dist.)
CourtTexas Court of Appeals

Stanley G. Schneider, Tom D. Moran, W. Troy McKinney, Houston, for appellant.

Dan McCrory, Houston, for appellee.



WILLIAM E. JUNELL, Justice (Assigned).

Appellant was charged by indictment with the offense of possessing more than five pounds, but less than fifty pounds, of marijuana. Thereafter, the State Comptroller's Office issued a marijuana and controlled substances tax assessment of $49,070 against appellant. Appellant filed an application for writ of habeas corpus claiming the double jeopardy clause barred the prosecution for possession of marijuana based on the assessment of a tax arising from the same conduct. Following a hearing, the trial court denied appellant's requested relief.

Appellant appealed that decision to this court and the decision was affirmed. The Court of Criminal Appeals refused petition for discretionary review. Appellant filed a petition for writ of certiorari, which was granted on October 11, 1994. The United States Supreme Court vacated our judgment and remanded to this court for further consideration in light of Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.3d 767 (1994). The question we must answer is whether the Texas Controlled Substances Tax is a punishment within the meaning of the Double Jeopardy clause.

Appellant argues the marijuana tax assessment constitutes double jeopardy under the Kurth Ranch decision. In Kurth Ranch, the Supreme Court for the first time subjected a tax statute to double jeopardy analysis, holding that Montana's Dangerous Drug Tax was a punishment within the contemplation of the Fifth Amendment. Like appellant, the Kurths' marijuana was confiscated and the Kurths were arrested and prosecuted. 511 U.S. at ---- - ----, 114 S.Ct. at 1942-43. The State of Montana then assessed a tax on the Kurths' marijuana. Id.

The Supreme Court analyzed the Montana scheme and found several unusual features that led the majority to conclude the Montana tax was actually a punishment for double jeopardy purposes. In reaching its conclusion, the Court acknowledged that taxes are usually motivated by revenue raising rather than punitive purposes. Kurth Ranch, at ----, 114 S.Ct. at 1946. Yet at some point, an exaction labeled as a tax approaches punishment. The Montana tax, however, while denominated as a tax, also has a strong deterrent purpose. The Court characterized the rate of the Montana tax applicable to marijuana as remarkably high. Id. The Montana tax assessed on marijuana is the greater of $100 per ounce or ten percent of market value. MONTANA CODE ANN. § 15-25-111.

In addition, other unusual features set the Montana statute apart from most taxes. First, the tax is conditioned on the commission of a crime, which is significant of penal and prohibitory intent rather than the gathering of revenue. Kurth Ranch, at ----, 114 S.Ct. at 1947. Second, the Court questioned the imposition of a tax based on possession when, in actuality, taxpayers were deprived of possession by the time of assessment. Id.

The Texas Controlled Substances Tax contains many of the same unusual features as Montana's tax. First, the Texas tax, like the Montana tax, has a high rate of taxation. The Texas tax, $98 per ounce, is almost identical to Montana's $100 per ounce tax.

Second, the Texas tax is conditioned on the commission of a crime. The Texas tax is imposed on the possession, purchase, acquisition, importation, manufacture, or production by a dealer of a taxable substance on which a tax has not been previously paid. TEX.TAX CODE ANN. § 159.101(a). Dealer is defined as a "person who in violation of the law of this state imports into this state or manufactures, produces, acquires, or possesses" controlled substances. TEX.TAX CODE ANN. § 159.001(3). Further, the purchase, acquisition, importation, manufacture, or production of a taxable substance is exempt from the tax if the activity is authorized by law. TEX.TAX CODE ANN. § 159.103. Therefore, the only people subject to the Texas tax are those who, by definition, have engaged in criminal conduct.

Third, the Texas tax allows assessment after confiscation of the controlled substances on which the assessment is made. Indeed, this is precisely what occurred in this case. After law enforcement authorities arrested appellant and confiscated the marijuana, the Comptroller of Public Accounts served a tax notice on appellant. At that point, the comptroller made his assessment, notwithstanding that appellant no longer possessed the marijuana. Unlike the Montana tax, however, the Texas tax assessment may also occur prior to arrest because the obligation to pay the tax arises on delivery, possession, or manufacture, and is not necessarily related to arrest.

The State argues that the Texas tax is more fairly characterized as an excise tax as opposed to the Montana tax, which was characterized by the Supreme Court as a property tax levied on the goods themselves. An excise tax, such as a cigarette or alcohol tax, is a tax imposed on the engaging in an occupation or a tax imposed on the manufacture, sale, or consumption...

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13 cases
  • Bryant v. State
    • United States
    • Indiana Supreme Court
    • December 27, 1995
    ...subject it to the constraints of the Double Jeopardy Clause. Kurth Ranch, 511 U.S. at ----, 114 S.Ct. at 1945. Accord, Stennett v. State, 905 S.W.2d 612 (Tex.Ct.App.1995). II Concluding that the Indiana CSET is sufficiently similar to the Montana dangerous drug tax to subject it to the cons......
  • Myles v. State
    • United States
    • Texas Court of Appeals
    • June 5, 1997
    ...assessment and collection of a tax on the controlled substance is barred by the Double Jeopardy Clause. Stennett v. State, 905 S.W.2d 612, 615 (Tex.App.--Houston [14th Dist.] 1995), aff'd, 941 S.W.2d 914 (Tex.Crim.App.1996) (not released for Nevertheless, appellant's prosecution for possess......
  • Jensen v. Bouker
    • United States
    • U.S. District Court — District of Kansas
    • March 13, 2000
    ...§ 79-5206 (1997).7 The tax is also assessed by the Department of Revenue independently of the criminal prosecution. Cf. Stennett v. State, 905 S.W.2d 612 (Tex.App.1995) (Texas drug tax, which provided for prosecutor approval of tax case settlement and prosecutor request of postponement of t......
  • Arnold v. State
    • United States
    • Texas Court of Appeals
    • January 18, 1996
    ... ... Stennett v. State, 905 S.W.2d 612, 615 (Tex.App.--Houston [14th Dist.] 1995, ... Page 710 ... pet. granted). The rule is clear: labels don't control; ... ...
  • Request a trial to view additional results

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