Have illegal substances? You may owe the state money. What to know about NC’s drug tax

If you have illegal drugs in your possession in North Carolina, then you may owe the state money.

North Carolina’s Unauthorized Substance Tax, sometimes referred to as a “drug tax,” is a tax on the possession of certain substances, such as marijuana, cocaine and moonshine, according to the N.C. Justice Center.

State law requires those in possession of illegal drugs “to purchase tax stamps and place them permanently on the substance,” the NCJC says.

If a person who has illegal drugs does not purchase the stamp, law enforcement agencies can report it to the N.C. Department of Revenue, according to the NCJC. The NCDOR can then assess back taxes, penalties and interest against the person.

“The average assessed drug tax is $8,872, but some end up owing millions,” according to the NCJC.

Since 2010, the NCDOR has collected more than $100 million in drug taxes, with $9 million collected in the last year, WCNC reported.

Here’s what to know about the unauthorized substances tax.

When is the unauthorized substances tax due?

According to the NCDOR, the unauthorized substances tax must be paid within 48 hours after an individual obtains the illegal substance.

How to buy unauthorized substances tax stamps

Unauthorized substances tax stamps can be purchased two ways, according to the NCDOR:

• At an NCDOR service center, from 8 a.m.-5 p.m., Monday through Friday.

• By mailing in a completed BD-1 or BD-1L form to the NCDOR, along with payment in full.

The form can be mailed to the North Carolina Department of Revenue, at Post Office Box 871, Raleigh, NC 27602.

For in-person sales of tax stamps, the only accepted forms of payment are exact change, cashiers checks and money orders, the NCDOR says. Cash is not accepted for mail-in payments.

How much are unauthorized substance tax stamps?

The price of unauthorized substance tax stamps depends on what you’re buying them for.

For marijuana, the cost is $3.50 per gram, but you only have to pay the tax if you have more than 42.5 grams, according to the NCDOR. For seven of more grams of low street value drugs sold by weight, such as cocaine, the cost jumps to $50 per gram.

Stamps for “illicit spirituous liquor,” such as moonshine, range from $12.80-$31.70 per gallon, according to the NCDOR.

Do you have to identify yourself when purchasing tax stamps?

Those who buy tax stamps do not have to give their name, address, social security number or any identifying information, according to the NCDOR.

However, if you choose to purchase stamps by mail, you must provide a valid mailing address.

Can you be arrested for purchasing tax stamps?

No, information on who purchases tax stamps is confidential and cannot be shared with law enforcement, according to the NCDOR.

However, “purchasing stamps only fulfills your civil unauthorized substance tax obligation,” the NCDOR says, meaning you can still be arrested if a law enforcement officer finds the substances in your possession.