Federal Judge Dismisses Washington Marijuana Tax Case

Submitted by Darren Smith, Weekend Contributor

the-thin-line-of-medical-marijuanaKing5 news reports that the operator of a medical marijuana dispensary in Bellingham, Martin Nickerson, sued because he was being simultaneously prosecuted for marijuana distribution and targeted by the state Revenue Department for not collecting taxes on marijuana sales. He argued he couldn’t pay the tax without incriminating himself.

In what should likely be a continuation of process rather than an abrupt end U.S. District Judge Marsha Pechman dismissed the case last week for lack of jurisdiction.

The attorneys representing Washington State argued that the case should be tried in state court, that it was not within the jurisdiction of the federal government.

There is a distinction in Washington between operating as a medical marijuana dispensary and a state licensed recreational marijuana retailer.  The former being possibly more in legal jeopardy due to the dispensaries being largely unregulated by the state while the licensed recreational retailers are heavily regulated to abide by directives given by the U.S. Justice Department in exchange for non-enforcement of federal law.

The plaintiff medical marijuana grower is concerned by his completing tax returns, he would be admitting to violating the federal laws on marijuana cultivation, possession and distribution.

The Office of the Attorney General held that Medical Marijuana Dispensaries must charge sales tax on the marijuana and that retroactive payment was due.  This sudden demand distressed many medical dispensaries who formerly believed their products, like other prescription medications, were exempt from sales tax.

Nickerson’s attorney, Douglas Hiatt, said he filed the lawsuit in federal court because he believes federal judges will ultimately have to decide whether states can regulate and tax marijuana while it remains federally illegal.  He plans to refile the case in Thurston County Superior Court.

The case sounds reminiscent of Timothy Leary’s marijuana case against the federal government involving the possession of a joint in violation of the former Marihuana Tax Act of 1937.  See Leary v. United States.

By Darren Smith

Sources: KING5 News

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13 thoughts on “Federal Judge Dismisses Washington Marijuana Tax Case”

  1. Well, on this one if you tax marijuana specifically and make people apply to get a license, they’re admitting to wrongdoing. The good ole Capone situation still applies though. A general income tax can apply to the income derived from illicit activities generally.

  2. I think this case (taxes–not Ferguson or Perry) speak to WHY jumping so fast into legalizing marijuana was not a good idea. There were so many legal details no one bothered to work out in advance.

    1. iconoclast – pharmacies already are allowed to dispense cannabis if it were made legal. It is part of their federal license as seen on their wall.

    1. pete – a side is not required, but a clear comment is so that one can respond to it. 🙂

  3. Can you actually tax something that is illegal? Doesn’t taxing it make it legal?

  4. BarkinDog – your comment is so all over the place I am not sure which side you are on.

  5. OT

    Gov. Perry of Texas was indicted on two felony counts by Grand Jury convened by state special prosecutor as ordered by state judge.

  6. This just in from Ferguson. A new message from the Ferguson Black Caucus after last night’s looting of the scene of the robbery committed by dead guy.
    “Hands Up! Don’t Shoot. We gottta Loot!”

    You gotta thank Gov. Jay Nixon for bringing in the smooth talkers to run the policing. Those County guys were too offensive. Gotta hug and kiss em.

    There is a new song out this morning.

    Fer gu son, Fer gu Son.
    Greatest city in Ala bam.
    Clear across this great big land.
    There ain’t no place, like Fer Gu Son.

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