United States v. Sanchez
340 U.S. 42 (1950)

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U.S. Supreme Court

United States v. Sanchez, 340 U.S. 42 (1950)

United States v. Sanchez

No. 81

Argued October 20, 1950

Decided November 13, 1950

340 U.S. 42

Syllabus

1. The tax of $100 per ounce imposed by § 2590 of the Internal Revenue Code on transferors of marihuana who make transfers to unregistered transferees without the order form required by § 2591 and without payment by the transferees of the tax imposed by § 2590 is a valid exercise of the taxing power of Congress, notwithstanding its collateral regulatory purpose and effect. Pp. 340 U. S. 44-45.

(a) A tax is not invalid merely because it regulates, discourages, or deters the activities taxed, nor because the revenue obtained is negligible, or the revenue purpose is secondary. P. 340 U. S. 44.

(b) A tax is not invalid merely because it affects activities which Congress might not otherwise regulate. P. 340 U. S. 44.

2. The tax levied by § 2590(a)(2) is not conditioned on the commission of a crime, and it may properly be treated as a civil, rather than a criminal, sanction. Pp. 340 U. S. 45-46.

(a) That Congress provided civil procedure for collection indicates its intention that the levy be treated as civil in character. P. 340 U. S. 45.

(b) The civil character of the tax of $100 per ounce imposed by § 2590(a)(2) is not altered by its severity in relation to the tax of $1 per ounce levied by § 2590(a)(1). Pp. 340 U. S. 45-46.

(c) The imposition by § 2590(b) of liability on transferors is reasonably adapted to secure payment of the tax by transferees or stop transfers to unregistered persons, as well as to provide an additional source from which the expense of unearthing clandestine transfers can be recovered. Pp. 340 U. S. 45-46.

Reversed.

The United States brought suit in the District Court to recover taxes alleged to be due under the Marihuana Tax Act, 50 Stat. 551, now 26 U.S.C. § 2590 et seq. Defendants' motion to dismiss, attacking the constitutionality of the tax, was granted by the District Court. On direct appeal to this Court, reversed, p. 340 U. S. 46.

Page 340 U. S. 43

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