Lawsuit: State Can’t Tax Marijuana Because Pot Is Illegal On Federal Level
Bellingham, Wash. (CBS SEATTLE) — Washington State should be barred from collecting thousands of dollars in state and local marijuana taxes from an authorized marijuana dispensary and its owner because there are already pending federal charges, a lawsuit filed in federal court claims.
Martin Nickerson Jr. has sued Washington Gov. Jay Inslee, Attorney General Bob Ferguson and state tax chief Carol Nelson in federal court, arguing that he cannot be taxed on the state and local levels because he’s already being federally prosecuted, Courthouse News Service reports. His attorneys argue that he is unable to defend himself from state tax charges because he would be forced to waive his Fifth Amendment rights by responding to the local tax charges.
The states of Washington and Colorado have legalized recreational and medical marijuana sales, creating a tangled web of legal conflicts between the federal and state levels.
Due to Nickerson’s ongoing federal prosecution, he seeks a declaratory judgment “as to whether the state of Washington can tax actual sales of marijuana, medical or otherwise, under state law when it remains illegal federally under 21 USC et seq., the Supremacy clause, and Object Preemption Doctrine.”
His complaint argues whether or not the state can “grant authority to local and county government to authorize licensing and collect taxes on an activity that is a crime” on the federal level.
Nickerson runs the Northern Cross Collective Gardens, which according to the organization’s website, is a “patient/volunteer operated Medical Cannabis Collective” in Bellingham that opened in April 2011. “It is here, that Authorized Medicinal Cannabis Patients, can Safely and Responsibly, gain access to Quality Medicines, from a dedicated, reliable, and (most importantly) knowledgeable source.”
Nickerson argues that he should be protected from tax liens and other legal action as he defends himself from federal criminal charges stemming from raids on his property and home in March 2012.
On March 15, 2012, Bellingham Police raided the Northern Cross Collective, seizing property and all currency. The same day, federal and state agents raided Nickerson’s home and seized additional property, according to Courthouse News Service.
The state told Nickerson he owed $6,188 in marijuana taxes on Nov. 13, 2013, and that the North Cross Collective owed $47,783 in additional marijuana taxes.
But those tax bills have since inflated to $7,155 and $55,017.
Washington’s Department of Revenue began warning medical marijuana providers that they would become subject to pot sales taxes on May 31, 2011.
Nickerson and two of his employees were arrested and faced several felony charges for alleged possession and sale of marijuana, the Bellingham Herald reports. Just days after the police raid on Northern Cross that led to the criminal charges, attorneys representing Northern Cross filed suit seeking an injunction to block the city and local law enforcement from taking any further actions.
JP Morgan Chase Bank garnished Nickerson’s bank account in March, delivering the $824 in the account to the state tax department. And the state says it will continue to sanction more money due to his failure to pay marijuana taxes.
Nickerson’s attorney argues that his client cannot defend himself against the state tax charges without waiving his Fifth Amendment rights in the federal criminal case also against him.
He says the state violated his rights under the Fifth, Sixth and 14th Amendments.
In the meantime, he wants a preliminary judgment ordering the state to cease collection of tens of thousands of dollars in marijuana taxes “until this court can decide whether the state of Washington’s actions are preempted by the federal Controlled Substances Act.”
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