Can you get a refund if you paid the Tennessee drug tax? 7/27/09
Tennessee Drug or “Crack” Tax Ruled Illegal: Can you get a refund if you paid the Tennessee drug tax?
Tennessee, like several other states, taxed drugs as method of enforcement. The Tennessee Supreme Court ruled the tax illegal on July 24, 2009. Our research suggests that it may be possible to ask for a refund of the drug tax already paid either voluntarily or involuntarily.
We also believe there is a relatively narrow window for possible refunds for the Tennessee Drug Tax. We are attempting to get refunds for our clients who paid the Tennessee drug tax. Under McKesson Corp. v. Div. of Alcoholic Beverages, 496 U.S.18 (1990), all taxpayers are guaranteed by the Due Process Clause the right to a clear and certain remedy after paying a tax later determined to be unconstitutional. Specifically, the McKesson Court held that the Due Process Clause obligates the taxing authority to provide “meaningful backward-looking relief to rectify any unconstitutional deprivation.”
This minimum requirement is met only if the state provides taxpayers with a “clear and certain remedy” for any tax subsequently deemed “erroneous or unlawful.” We believe only a full refund of the Tennessee Drug Tax will comply with Due Process.