New York Governor Eliot Spitzer's proposed budget contains a provision that would tax marijuana at a rate of $3.50 per gram and controlled substances like cocaine at $200 per gram.

The budget provision would mandate that "tax stamps" be placed on all marijuana and controlled substances possessed or acquired by a dealer in New York state, according to The New York Times.

"The bill sets a tax stamp rate for marihuana of $3.50 per gram, and of a controlled substance at $200.00 per gram or fraction thereof, whether pure or dilute," said the provision. "The tax is paid by the dealer, in advance of his or her receipt of the marihuana or controlled substance, through the purchase of tax stamps from the Department of Taxation and Finance ("Department"). Upon receipt of the product, the dealer must affix enough stamps to the packages of marihuana or the controlled substance in order to show the tax has been fully paid."

As most drug dealers would probably avoid applying for such stamps and applying them to their packages, all law enforcement agencies and district attorneys would be required to notify the Department of Taxation and Finance of any dealer who has been arrested who has failed to pay his drug taxes.

The proposal is expected to yield $13 million in fiscal year 2008-2009 and $17 million yearly thereafter. The state is able to confiscate money and goods from the drug dealers to pay for the taxes. Twenty-nine other states also mandate taxes on sales of controlled substances.

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