It Finally Nailed Al Capone

Despite all of the police efforts during the 1920's & 30's, they never could get a conviction on Al "Scarface" Capone, the notorious Chicago-land gangster. None of the accusations of bootlegging, murder, and related crimes would ever stick. Finally, though, an unlikely charge landed him in the slammer: tax evasion.

In Capone's time during Prohibition, bootlegging produced the illegal drug of choice: alcohol. He and his business associates made millions satisfying America's thirst for it, and he even enjoyed celebrity-like status because of it. (He wasn't really a furniture salesman, as his business card read.)

In today's society, alcohol is legal again (albeit with plenty of taxes charged), and drug activity has changed. Instead of alcohol, drug activity includes marijuana, prescription drugs (without the prescription), and various cooked up chemical concoctions made in labs that we occasionally read in the newspaper have blown up, among others.

Like Capone, though, these home-based pharmaceutical companies would owe income taxes to federal, state, and local governments. Sales tax appears amusingly yet fully applicable too. After all, it is a product, and they sell it in the state -- although maybe out-of-state, over-the-internet sales would be exempted as other products sold are.

There's even a rate chart in Indiana outlining the "Controlled Substance Excise Tax" too. It seems to be in place specifically for illegal activity, as the statute states:

"The controlled substance excise tax is imposed on controlled substances that are:

(1) delivered;

(2) possessed; or

(3) manufactured;

in Indiana in violation of IC 35-48-4 or 21 U.S.C. 841 through 21 U.S.C. 852."

It then goes on to exempt certain law-abiding people, such as pharmacies and humane societies. (Hey, they have to control some pretty mean animals at times.)

If you're curious, the excise tax rates are as follows: for Schedule I, II, & III drugs, it is $40 / gram; Schedule IV ad V drugs are a little cheaper at $20 and $10 per gram, respectively; and marijuana is taxed at $3.50 per gram. I'm not making this up at all.

Of course, it's a safe bet that few -- if any -- voluntarily claim these taxes. It is crazy that we, as a State, even have a schedule like this, but I guess despite dodging would-be assassinations and numerous criminal charges, taxes finally nailed Capone.

As the old adage goes, "There's nothing for certain in life except death and taxes."
So, if a drug deal goes bad, don't shoot everyone involved… just mail them a Form 1099.