SENATE APPROVES TAX ON ILLICIT DRUGS

JEFFERSON CITY ( AP ) -- Illegal drug dealers would have to pay taxes on their contraband under a bill given Senate approval on Wednesday.

The drug tax was amended last week onto a bill that allows some agriculture tax credits to be taken on a quarterly basis, which supporters say would increase their value for farmers.

The Senate's vote returned the bill to the House, which passed it in February without the provision for taxing illegal drugs.  The House voted later Wednesday to send the bill to a conference committee of House and Senate members to resolve the differences.

Sen.  Charlie Shields offered the drug tax provision, which he said has been adopted in nearly half of all states.  He said taxes on substances like marijuana are rarely paid, but that putting the requirement into law lets authorities pursue the assets of people arrested for drug possession.

"If you can't get them through the illegal act, you can get them for tax evasion," said Shields, R-St.  Joseph.

Under Shields' amendment, people could purchase required tax stamps for their illegal drugs without identifying themselves.  The revenue would go to fight the illegal drug trade, including cleaning up methamphetamine labs.

The legislation also was amended to allow a tax break for those who make home improvements to accommodate someone with a disability, and to provide a tax break for H&R Block Inc.'s planned headquarters building in downtown Kansas City.

Tax bill is HB1182.

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