Marijuana Tax Act Law and Legal Definition

The Marihuana Tax Act (“Act”) is a U.S. federal law that imposed tax on the sale of cannabis, hemp, or marijuana. This Act was enacted in 1937. The Act was drafted by Harry Anslinger and introduced by Rep. Robert L. Doughton of North Carolina, on April 14, 1937. The provisions of the Act are codified under Title 26 of the United States Code.

The Act did not itself criminalize the possession or usage of hemp, marijuana, or cannabis. But included penalty and enforcement provisions to which marijuana, cannabis, or hemp handlers were subject. Violation of these procedures could result in a fine of up to $2000 and five years' imprisonment.

Under pertinent provisions of the Marihuana Tax Act, 26 U.S.C.S. §§ 4751-4753, every person who sells, deals in, dispenses, or gives away marihuana must register with the Internal Revenue Service and pay a special occupational tax. [Minor v. United States, 396 U.S. 87 (U.S. 1969)].

Under 29 U.S.C.S. § 4742(a) it is illegal to transfer marihuana except pursuant to a written order of the transferee on a form obtained by the latter at the time he pays the transfer tax. The order form when issued must carry the name and address of both buyer and seller and the amount of marihuana to be purchased. [26 U. S. C. § 4742(c)]. Other provisions of § 4742 require the form to be issued in triplicate, one copy to be retained by the Internal Revenue Service, the other copy to be kept in the buyer's files, and the original to be delivered to the seller and retained by him. [Section 4742(d)]. Both original and copies are open to inspection by federal and state law enforcement officers. 26 U.S.C.S. §§ 4742 (d), 4773. [Minor v. United States, 396 U.S. 87 (U.S. 1969)].