WA man sues gov’t saying state cannot tax a federally illegal drug


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Martin Nickerson Jr. is suing the government.
As a citizen of the state of Washington, he is suing Governor Jay Inslee, as well as Attorney General Bob Ferguson and state tax chief Carol Nelson for what he claims is a wrongful demand to collect taxes from him related to a medical marijuana dispensary he operated years ago.
Nickerson, who is currently facing federal marijuana possession and distribution charges, questions whether it should be legal for the state of Washington to assess taxes on a federally illegal drug, even citing Schedule I of the Controlled Substances Act. Yeah, he went there.

In 1998 Washington state legalized medical marijuana.
In 2011 the state began to warn those participating in the medical marijuana program that they would begin to be taxed on their revenue.
On March 15th 2012, just eight months before Washington would join Colorado as the first two states in the nation to legalize weed for recreational use, officers from the Bellingham Police Department raided Nickerson’s dispensary, the Northern Cross Collective. That same day, his house was raided by a task force comprised of both local and federal officers, where cash and other assets were seized as evidence.
In November of 2013, the state of Washington informed Nickerson that he owed just shy of $54,000 in back taxes between his personal and business income from the collective. Of course, he ignored it, so it has since been ballooned to over $61,000.
He argues that his constitutional rights are being trampled, particularly his 5th Amendment right which he feels will be violated if he has to answer to the massive tax liens while simultaneously trying to defend himself against the federal pot charges.
So far, his bank account has been garnished once without his consent, and the state has promised to continue to squeeze all that they can out of him moving forward.
He legally appealed the tax decision in January of this year, requesting a hearing to determine whether the state could impose a tax on a federally banned substance. No such hearing took place, as his appeal request was denied by the Washington Department of Revenue. So now he seeks the civil suit path and his complaint has named the most powerful men in Washington state politics as its targets.
By trying to present the federal ban on cannabis as a trump card over state law, Nickerson has pulled a page right out of the playbook used by the pot prohibitionists who may use the same tactic to restrict banking access for cannabis related businesses, or discriminate in other ways.
More often than not, it is the allure of the potential windfall of tax revenue from cannabis sales that drives local lawmakers to approve medical marijuana storefronts. Nickerson’s defense of his alleged tax evasion puts that symbiosis between communities and cannabis in real danger.
Allison Holcomb authored the state’s recreational pot law, and has little sympathy for Nickerson. She says that the Department of Revenue never asks for an itemized audit of exactly what dispensaries sell, they just want the total revenue – and that figure is what they assess taxes on. As Holcomb told the Associated Press, “The bottom line is he should have been paying his sales taxes along the way”.
Whichever side of the fence you find yourself on in this case, most people would probably agree that when your country is trying to jail you for the same purpose that your state is trying to profit off of you, a more clear cut reform is needed – from the top, down.