Document: 340 U.S. 42 71 S.Ct. 108 95 L.Ed. 47 UNITED STATESv.SANCHEZ et al. No. 81. Argued Oct. 20, 1950. Decided Nov. 13, Mr. Philip Elman, Washington, D.C., for appellant. No appearance appellees. Justice CLARK delivered the opinion of Court. 1 This is a direct appeal, 28 U.S.C. § 1252, U.S.C.A. from dismissal by District Court suit recovery $8,701.65 in taxes and interest alleged to be due under 7(a)(2) Marihuana Tax, Act, 50 Stat. 551, now 2590(a)(2) Internal Revenue Code. 26 2590(a)(2), 2590(a)(2). In their motion dismiss, which was granted without opinion, defendants attacked constitutionality this subsection on ground that it levied penalty, not tax. The validity levy issue here. 2 enacting Tax Congress had two objectives: 'First, development plan taxation will raise revenue at same time render extremely difficult acquisition marihauna persons who desire illicit uses and, second, an adequate means publicizing dealings marihuana order tax control traffic effectively.' S. Rep. 900, 75th Cong., 1st Sess., p. 3. To effect, see H.R. 792, 2. 3 Pursuant these objective, 3230 Code imposes special ranging $1 $24 'every person imports, manufactures, produces, compounds, sells, deals in, depenses, prescribes, administers, or gives away marihuana'. For purposes administration, 3231 requires such register payment with Collector businesses are located. then makes unlawful—with certain exceptions pertinent here—for any transfer except pursuance written transferee blank form issued Secretary Treasury. 2591. Section 2590 requiries he applies pay per ounce fraction thereof if has paid registered, 2590(a)(1), $100 registered. transferor also made liable so imposed, event transferee. 2590(b). Defendants case transferors. 4 It obvious 2590, imposing severe burden transfers unregistered persons, implements congressional purpose restricting accepted industrial medicinal channels. Hence attack here rests regulatory character prohibitive section as well penal nature imposition. But despite effect close resemblance does follow invalid. 5 First. beyond serious question cease valid merely because regulates, discourages, even definitely deters activities taxed. Sonzinsky v. United States, 1937, 300 506, 513—514, 57 554, 555—556, 81 772. principle though obtained obviously negligible, supra, may secondary, Hampton & Co. 1928, 276 394, 48 348, 72 624. Nor statute necessarily fall touches might otherwise regulate. As pointed out Magnano Hamilton, 1934, 292 40, 47, 54 599, 603, 78 1109: 'From beginning our government, courts have sustained although imposed collateral intent effecting ulterior ends which, considered apart, were constitutional power lawmakers realize legislation directly addressed accomplishment.' 6 These principles controlling legitimate exercise taxing its effect. 7 Second. conditioned upon commission crime. Such unlawful act statute. Liability primarily transferee; but fails pay, transferor, here, becomes liable. thus failure rise liability transferor. Since his rest criminal conduct, can properly called civil rather than sanction. fact provided procedure collection indicates intention treated such. Helvering Mitchell, 1938, 303 391, 58 630, 82 917. Moreover, Government seeking cllect judicial proceeding attendant safeguards. Compare Lipke Lederer, 1922, 259 557, 549, 66 1061; Tovar Jarecki, Cir., 1949, 173 F.2d 449. 8 altered severity relation assessed 2590(a)(1). different rational foundation. Unregistered likely procure required prior Free sanctions, dealers would prone accommodate activity. imposition equally burdens transferors reasonably adapted secure transferees stop provide additional source expense unearthing clandestine recovered. Cf. supra. 9 judgment below must reversed cause remanded further proceedings conformity opinion. 10 Reversed.

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