Federal lawsuit: Can Washington tax marijuana?

Published on NewsOK Modified: May 9, 2014 at 6:51 pm •  Published: May 9, 2014
Advertisement
;

SEATTLE (AP) — A federal lawsuit is challenging Washington state's authority to tax marijuana as long as marijuana remains illegal under federal law.

The case arises from the state's attempt to collect sales taxes from a medical marijuana dispensary in Bellingham. But lawyer Douglas Hiatt, who filed it late Thursday, said it could throw a wrench in Washington's plans for collecting taxes on recreational marijuana, too.

The author of Washington's recreational pot law, Alison Holcomb, disagreed. She doesn't expect the lawsuit to get very far.

Hiatt is representing the dispensary's operator, Martin Nickerson, who is simultaneously being prosecuted criminally for marijuana distribution and targeted by the state Department of Revenue for not collecting and remitting taxes on the pot he was allegedly distributing. Nickerson can't pay the tax without incriminating himself in the criminal case, in violation of his constitutional rights, Hiatt argued.

Furthermore, the state, which says Nickerson owes more than $62,000, has seized more than $800 from his bank account. Hiatt said it's important to get an answer from a federal court about whether the state took that money legally.

Hiatt opposed Washington's recreational marijuana law and argues any meaningful drug law reform must come at the federal level. Nevertheless, he said he doesn't want to "look like the guy spoiling the party."

"I've got a client, he's got a problem, and we've got to fix it," Hiatt said. "It's a way to get some clarity on what's allowed."

The U.S. Supreme Court has held the unlawfulness of an activity does not prevent its taxation. However, Hiatt argued Washington state law explicitly allows the licensing, zoning and taxing of medical marijuana businesses. That, he said, is contrary to the federal Controlled Substances Act.