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I paid Minnesota taxes on a gram of marijuana

I paid Minnesota taxes on a gram of marijuana
The halls of the Minnesota Department of Revenue in St. Paul bustle with form-weary taxpayers. It's late morning as I approach the counter looking to declare possession of a gram of weed.

A blonde receptionist in a black sweater looks at me curiously. She reaches for the phone to alert staff upstairs of my presence. I stay calm and grab an empty seat.

No, I'm not stoned. A little known Minnesota statute has brought me here.

SEE ALSO: When will medical marijuana be legal in Minnesota?

It's Chapter 297D, the Marijuana and Controlled Substance Taxation, and it was passed in 1986 as a way to bolster the prosecution of drug dealers. Failure to pay taxes on marijuana can result in extra penalties of up to $14,000 and seven years in prison.

For a while it worked. In 1991, the Minnesota Department of Revenue raked in an extra $652,000 from sale of the stamps.

By the late aughts, however, marijuana stamps sales had whittled down to zero. Why? No one knows for sure. But it stayed that way until 2012, when suddenly the number spiked to $7,539 -- all thanks to Stephen Conlin, a 53-year-old candidate for St. Charles mayor.

On Jan. 24, 2012, police raided Conlin's barbershop, the Buzz, and seized hundreds of grams of marijuana and $668 in cash. His defense: marijuana was legal as long as he bought the stamps.

In court, his attorney pointed to inconsistencies in the language of the law, including this curious sentence near the top of the taxation statute:

"Controlled substance" does not include marijuana.

"They handed me a plate full of shit, but nobody seemed to have read the laws to realize that the plate they were handing me was solid gold," Conlin says today. "Everything I did was by the letter of the law."

The court didn't buy it. The taxation statute also makes clear that stamps do not provide immunity from prosecution. Conlin was sentenced to 90 days in jail. He's in the midst of an appeal.

Marijuana tax stamps are required in 20 states, according to NORML, though others have found the laws unconstitutional. The constitutionality of Minnesota's own law was upheld in a 1988 case involving William Sisson. He argued that his right of due process had been violated after authorities seized his car, trailer and lawn tractor in lieu of controlled substance taxes and penalties.

 
But it's not only dealers contributing to state coffers. A decent portion of the people purchasing these little oddities happen to be genuine collectors, usually those who specialize in state and federal revenue stamps.

There was a time when Minnesota issued stamps for seemingly everything, including candling eggs, margarine, and Christmas trees, according to Bob Hohertz, a 75-year-old philatelist, or stamp collector, from Northfield. The bottom of cigarette packs, to this day, bear this tradition, but most of these items were discontinued because the cost to print them was greater than the income generated. So government inspectors came up with a better idea.

"Instead of putting a stamp on beer," he says, "they just charge the manufacturer directly before they ship them."

Of course, there are no marijuana distribution centers in our parts. Citizens are expected to either submit a form through the mail or show up in person. Which is what I did.

The receptionist who looked at me quizzically only a moment ago now smiles. My request is uncommon but not unheard of, she says. Soon, another employee approaches with my souvenir and a receipt.

I'm out the door in only a few seconds, no questions asked. The department of revenue is forbidden from disclosing my personal information to prosecutors, and the requirement to purchase stamps only extends to people who possess more than an ounce and half.

But I begin to wonder: what do I do next? For help, I call another collector named Rick Wolf. At one time, he owned 50 of these tiny treasures but sold them for a profit. Stamps that date back to the 1930s can go for hundreds of dollars on eBay. Mine cost $3.50 and it's only a few hours old.

Still, Wolf suggests I follow his lead.

"It's the only way you can make money off marijuana legally," he says.

-- Follow Jesse Marx on Twitter @marxjesse or send tips to jmarx@citypages.com


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