The NC Drug Tax

The Unauthorized Substances Tax (“NC Drug Tax”) is a tax on the possession of certain drugs. This law requires people in possession of certain amounts of a drug to purchase stamps and place them permanently on the substance. (see rates below). Almost no one, besides stamp collectors, purchase these stamps; most people either don’t know the stamps exist or they are wary about giving their information to the Department of Revenue (NC DOR). If a person does not purchase the required stamp and is found in possession of one of the specified substances, the law enforcement agency reports the failure to purchase stamps to the NC DOR. The NC DOR later assesses back taxes, penalties, and interest against the person. Over four thousand people annually, on average, are exposed to thousands in back taxes, interest, and penalties. The average assessed drug tax is $8,872, but some end up owing up to $5 million. 

 

Source: NC Department of Revenue website

WHY ABOLISH THE NC DRUG TAX: 

  • Thirty-three states and the federal have deemed drug taxes unnecessary, unjust, or unconstitutional 
  • The drug tax extracts millions from low-income communities and communities of color every year 
  • The drug tax perversely incentivizes over-policing vulnerable communities 

View this factsheet for more information 

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