511 U.S. 767 (1994)

DEPARTMENT OF REVENUE OF MONTANA
v.
KURTH RANCH et al.

No. 93-144.

United States Supreme Court.

Argued January 19, 1994. Decided June 6, 1994. CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

*768 Stevens, J., delivered the opinion of the Court, in which Blackmun, Kennedy, Souter, and Ginsburg, JJ., joined. Rehnquist, C. J., post, p. 785, and O'Connor, J., post, p. 792, filed dissenting opinions. Scalia, J., filed a dissenting opinion, in which Thomas, J., joined, post, p. 798.

Paul Van Tricht, Special Assistant Attorney General of Montana, argued the cause for petitioner. With him on the briefs was David W. Woodgerd, Special Assistant Attorney General.

James A. Feldman argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Days and Deputy Solicitor General Bender.

*769 James H. Goetz argued the cause and filed a brief for respondents.^[*]

Justice Stevens, delivered the opinion of the Court.

This case presents the question whether a tax on the possession of illegal drugs assessed after the State has imposed a criminal penalty for the same conduct may violate the constitutional prohibition against successive punishments for the same offense.^[1]

*770 I

Montana's Dangerous Drug Tax Act^[2] took effect on October 1, 1987. The Act imposes a tax "on the possession and storage of dangerous drugs,"^[3] Mont. Code Ann. § 15-25-111 (1987), and expressly provides that the tax is to be "collected only after any state or federal fines or forfeitures have been satisfied." § 15-25-111(3). The tax is either 10 percent of the assessed market value of the drugs as determined by the Montana Department of Revenue (DOR) or a specified amount depending on the drug ($100 per ounce for marijuana, for example, and $250 per ounce for hashish), whichever is greater. § 15-25-111(2). The Act directs the state treasurer to allocate the tax proceeds to special funds to support "youth evaluation" and "chemical abuse" programs and "to enforce the drug laws." §§ 15-25-121, 15-25-122.^[4]

In addition to imposing reporting responsibilities on law enforcement agencies,^[5] the Act also authorizes the DOR to *771 adopt rules to administer and enforce the tax. Under those rules, taxpayers must file a return within 72 hours of their arrest. Mont. Admin. Rule 42.34.102(1) (1988). The Rule also provides that "[a]t the time of arrest law enforcement personnel shall complete the dangerous drug information report as required by the department and afford the taxpayer an opportunity to sign it." Rule 42.34.102(3). If the taxpayer refuses to do so, the law enforcement officer is required to file the form within 72 hours of the arrest. Ibid. The "associated criminal nature of assessments under this act" justifies the expedited collection procedures. See Rule 42.34.103(3). The taxpayer has no obligation to file a return or to pay any tax unless and until he is arrested.

II

The six respondents, all members of the extended Kurth family, have for years operated a mixed grain and livestock farm in central Montana.^[6] In 1986 they began to cultivate and sell marijuana. About two weeks after the new Dangerous Drug Tax Act went into effect, Montana law enforcement officers raided the farm, arrested the Kurths, and confiscated all the marijuana plants, materials, and paraphernalia they found. In re Kurth Ranch, 145 B. R. 61, 66 (Bkrtcy. Ct. Mont. 1990).^[7] The raid put an end to the *772 marijuana business and gave rise to four separate legal proceedings.

In one of those proceedings, the State filed criminal charges against all six respondents in the Montana District Court, charging each with conspiracy to possess drugs with the intent to sell, Mont. Code Ann. § 45-4-102 (1987), or, in the alternative, possession of drugs with the intent to sell, § 45-9-103.^[8] Each respondent initially pleaded not guilty, but subsequently entered into a plea agreement. On July 18, 1988, the court sentenced Richard Kurth and Judith Kurth to prison and imposed suspended or deferred sentences on the other four family members.^[9]

The county attorney also filed a civil forfeiture action seeking recovery of cash and equipment used in the marijuana operation. The confiscated drugs were not involved in that action, presumably because law enforcement agents had destroyed them after an inventory. Respondents settled the forfeiture action with an agreement to forfeit $18,016.83 in cash and various items of equipment.

*773 The third proceeding involved the assessment of the new tax on dangerous drugs. Despite difficulties the DOR had in applying the Act for the first time, it ultimately attempted to collect almost $900,000 in taxes on marijuana plants, harvested marijuana, hash tar and hash oil, interest, and penalties.^[10] The Kurths contested the assessments in administrative proceedings. Those proceedings were automatically stayed in September 1988, however, when the Kurths initiated the fourth legal proceeding triggered by the raid on their farm: a petition for bankruptcy under Chapter 11 of the Bankruptcy Code. See 11 U. S. C. § 362(a).

In the bankruptcy proceedings, the Kurths objected to the DOR's proof of claim for unpaid drug taxes and challenged the constitutionality of the Montana tax. After a trial, the Bankruptcy Court held most of the assessment invalid as a matter of state law,^[11] but concluded that an assessment of $181,000 on 1,811 ounces of harvested marijuana was authorized by the Act. It held that assessment invalid under the Federal Constitution.

Relying primarily on United States v. Halper, 490 U. S. 435 (1989), the Bankruptcy Court decided that the assessment constituted a form of double jeopardy. The court rejected the State's argument that the tax was not a penalty because it was designed to recover law enforcement costs; as the court noted, the DOR "failed to introduce one scintilla of evidence as to cost of the above government programs or costs of law enforcement incurred to combat illegal drug *774 activity." 145 B. R., at 74. After noting that a portion of the assessment resulted in a tax eight times the product's market value,^[12] the court explained that the punitive character of the tax was evident

"because drug tax laws have historically been regarded as penal in nature, the Montana Act promotes the traditional aims of punishment-retribution and deterrence, the tax applies to behavior which is already a crime, the tax allows for sanctions by restraint of Debtors' property, the tax requires a finding of illegal possession of dangerous drugs and therefore a finding of scienter, the tax will promote elimination of illegal drug possession, and the tax appears excessive in relation to the alternate purpose assigned, especially in the absence of any record developed by the State as to societal costs. Finally, the tax follows arrest for possession of illegal drugs and the tax report is made by law enforcement officers, not the taxpayer, who may or may not sign the report." Id., at 75-76.

These aspects led the court to the "inescapable conclusion" that the drug tax statute's purpose was deterrence and punishment. Id., at 76.

The District Court affirmed. Agreeing with the Bankruptcy Court's findings and reasoning, it concluded that the Montana Dangerous Drug Tax Act "simply punishes the Kurths a second time for the same criminal conduct." In re Kurth Ranch, CV-90-084-GF, 1991 WL 365065 (D. Mont., Apr. 23, 1991) (reprinted at App. to Pet. for Cert. 22). That *775 and the DOR's failure to provide an accounting of its actual damages or costs convinced the Bankruptcy Court that the tax assessments violated the Fifth Amendment's Double Jeopardy Clause. Ibid.

The Court of Appeals for the Ninth Circuit also affirmed, but based its conclusion largely on the State's refusal to offer evidence justifying the tax, and accordingly refused to hold the tax unconstitutional on its face. In re Kurth Ranch, 986 F. 2d 1308, 1312 (1993). The court first determined that under Halper, a disproportionately large civil penalty can be punitive for double jeopardy purposes. 986 F. 2d, at 1310. That the assessment is called a tax, as opposed to some kind of penalty, is not controlling. Id., at 1310-1311. The central inquiry under Halper, the court determined, is whether the sanction imposed is rationally related to the damages the government suffered. 986 F. 2d, at 1311. That inquiry only applies to cases in which there has been a separate criminal conviction, however.^[13] The court concluded that the Kurths were entitled to an accounting to determine if the sanction constitutes an impermissible second punishment, and because the State refused to offer any such evidence, it held the tax unconstitutional as applied to the Kurths. Id., at 1312.

While this case was pending on appeal, the Montana Supreme Court reversed two lower state-court decisions that had held that the Dangerous Drug Tax Act was a form of double jeopardy. Sorensen v. State Dept. of Revenue, 254 Mont. 61, 836 P. 2d 29 (1992). Over the dissent of two justices, *776 the State Supreme Court found that the legislature had intended to establish a civil, not a criminal, penalty and that the tax had a remedial purpose other than promoting retribution and deterrence. Id., at 65, 836 P. 2d, at 31. The court found that Halper was not controlling, both because it expressly announced "`a rule for the rare case' " and because the case involved a civil penalty, not a tax. 254 Mont., at 67, 836 P. 2d, at 32-33. The Sorensen court concluded that the drug tax was not excessive and that a tax, unlike the civil sanction at issue in Halper, requires no proof of the State's remedial costs on the part of the State. 254 Mont., at 67-68, 836 P. 2d, at 33.

The Montana Supreme Court's decision is directly at odds with the conclusion reached in the federal proceedings involving the Kurths. We therefore granted certiorari to review the decision of the Court of Appeals. 509 U. S. 953 (1993). We now affirm its judgment.

III

In Halper we considered "whether and under what circumstances a civil penalty may constitute `punishment' for the purposes of double jeopardy analysis." 490 U. S., at 436. Our answer to that question does not decide the different question whether Montana's tax should be characterized as punishment.

Halper was convicted of 65 separate violations of the criminal false claims statute, 18 U. S. C. § 287, each involving a demand for $12 in reimbursement for medical services worth only $3. After Halper was sentenced to two years in prison and fined $5,000, the Government filed a separate action to recover a $2,000 civil penalty for each of the 65 violations. See 31 U. S. C. § 3729 (1982 ed., Supp. II). The District Court found that the $130,000 recovery the statute authorized "bore no `rational relation' to the sum of the Government's $585 actual loss plus its costs in investigating and prosecuting Halper's false claims." 490 U. S., at 439. In *777 the court's view, a civil penalty "more than 220 times greater than the Government's measurable los[s] qualified as punishment" that was barred by the Double Jeopardy Clause. Ibid.

On direct appeal to this Court, we rejected the Government's submission that the Double Jeopardy Clause only applied to punishment imposed in criminal proceedings, reasoning that its violation "can be identified only by assessing the character of the actual sanctions imposed on the individual by the machinery of the state." Id., at 447.^[14] In making such an assessment, "the labels `criminal' and `civil' are not of paramount importance." Ibid. Accepting the District Court's findings, we held that "a defendant who already has been punished in a criminal prosecution may not be subjected to an additional civil sanction to the extent that the second sanction may not fairly be characterized as remedial, but only as a deterrent or retribution." Id., at 448-449.

Halper thus decided that the legislature's description of a statute as civil does not foreclose the possibility that it has a punitive character.^[15] We also recognized in Halper that a so-called civil "penalty" may be remedial in character if it merely reimburses the government for its actual costs arising from the defendant's criminal conduct. Id., at 449-450, *778 452. We therefore remanded the case to the District Court to determine what portion of the statutory penalty could be sustained as compensation for the Government's actual damages.

Halper did not, however, consider whether a tax may similarly be characterized as punitive.

IV

Criminal fines, civil penalties, civil forfeitures, and taxes all share certain features: They generate government revenues, impose fiscal burdens on individuals, and deter certain behavior. All of these sanctions are subject to constitutional constraints. A government may not impose criminal fines without first establishing guilt by proof beyond a reasonable doubt. Cf. In re Winship, 397 U. S. 358 (1970). A defendant convicted and punished for an offense may not have a nonremedial civil penalty imposed against him for the same offense in a separate proceeding. United States v. Halper, 490 U. S. 435 (1989). A civil forfeiture may violate the Eighth Amendment's proscription against excessive fines. Austin v. United States, 509 U. S. 602 (1993). And a statute imposing a tax on unlawful conduct may be invalid because its reporting requirements compel taxpayers to incriminate themselves. Marchetti v. United States, 390 U. S. 39 (1968).

As a general matter, the unlawfulness of an activity does not prevent its taxation. Id., at 44; United States v. Constantine, 296 U. S. 287, 293 (1935); James v. United States, 366 U. S. 213 (1961). Montana no doubt could collect its tax on the possession of marijuana, for example, if it had not previously punished the taxpayer for the same offense, or, indeed, if it had assessed the tax in the same proceeding that resulted in his conviction. Missouri v. Hunter, 459 U. S. 359, 368-369 (1983); see also Halper, 490 U. S., at 450. Here, we ask only whether the tax has punitive characteristics *779 that subject it to the constraints of the Double Jeopardy Clause.

Although we have never held that a tax violated the Double Jeopardy Clause, we have assumed that one might.^[16] In the context of other constitutional requirements, we have repeatedly examined taxes for constitutional validity. We have cautioned against invalidating a tax simply because its enforcement might be oppressive or because the legislature's motive was somehow suspect. A. Magnano Co. v. Hamilton, 292 U. S. 40, 44 (1934). Yet we have also recognized that "there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment." Id., at 46 (citing Child Labor Tax Case, 259 U. S. 20, 38 (1922)). That comment, together with Halper `s unequivocal statement that labels do not control in a double jeopardy inquiry, indicates that a tax is not immune from double jeopardy scrutiny simply because it is a tax.

Halper recognized that "[t]his constitutional protection is intrinsically personal," and that only "the character of the actual sanctions" can substantiate a possible double jeopardy violation. 490 U. S., at 447. Whereas fines, penalties, and forfeitures are readily characterized as sanctions, taxes are typically different because they are usually motivated by *780 revenue-raising, rather than punitive, purposes. Yet at some point, an exaction labeled as a tax approaches punishment, and our task is to determine whether Montana's drug tax crosses that line.

We begin by noting that neither a high rate of taxation nor an obvious deterrent purpose automatically marks this tax as a form of punishment. In this case, although those factors are not dispositive, they are at least consistent with a punitive character. A significant part of the assessment was more than eight times the drug's market value—a remarkably high tax.^[17] That the Montana Legislature intended the tax to deter people from possessing marijuana is beyond question.^[18] The DOR reminds us, however, that many taxes that are presumed valid, such as taxes on cigarettes and alcohol, are also both high and motivated to some *781 extent by an interest in deterrence. Indeed, although no double jeopardy challenge was at issue, this Court sustained the steep $100-per-ounce federal tax on marijuana in United States v. Sanchez, 340 U. S. 42 (1950). Thus, while a high tax rate and deterrent purpose lend support to the characterization of the drug tax as punishment, these features, in and of themselves, do not necessarily render the tax punitive. Cf. Sonzinsky v. United States, 300 U. S. 506, 513514 (1937).

Other unusual features, however, set the Montana statute apart from most taxes. First, this so-called tax is conditioned on the commission of a crime. That condition is "significant of penal and prohibitory intent rather than the gathering of revenue."^[19] Moreover, the Court has relied on the absence of such a condition to support its conclusion that a particular federal tax was a civil, rather than a criminal, sanction.^[20] In this case, the tax assessment not only hinges on the commission of a crime, it also is exacted only after the taxpayer has been arrested for the precise conduct that gives rise to the tax obligation in the first place.^[21] Persons *782 who have been arrested for possessing marijuana constitute the entire class of taxpayers subject to the Montana tax.

Taxes imposed upon illegal activities are fundamentally different from taxes with a pure revenue-raising purpose that are imposed despite their adverse effect on the taxed activity. But they differ as well from mixed-motive taxes that governments impose both to deter a disfavored activity and to raise money. By imposing cigarette taxes, for example, a government wants to discourage smoking. But because the product's benefits—such as creating employment, satisfying consumer demand, and providing tax revenues— are regarded as outweighing the harm, that government will allow the manufacture, sale, and use of cigarettes as long as the manufacturers, sellers, and smokers pay high taxes that reduce consumption and increase government revenue. These justifications vanish when the taxed activity is completely forbidden, for the legitimate revenue-raising purpose that might support such a tax could be equally well served by increasing the fine imposed upon conviction.^[22]

*783 The Montana tax is exceptional for an additional reason. Although it purports to be a species of property tax—that is, a "tax on the possession and storage of dangerous drugs," Mont. Code Ann. § 15-25-111 (1987)—it is levied on goods that the taxpayer neither owns nor possesses when the tax is imposed. Indeed, the State presumably destroyed the contraband goods in this case before the tax on them was assessed. If a statute that amounts to a confiscation of property is unconstitutional, Heiner v. Donnan, 285 U. S. 312, 326 (1932); Nichols v. Coolidge, 274 U. S. 531, 542 (1927), a tax on previously confiscated goods is at least questionable.^[23] A tax on "possession" of goods that no longer exist and that the taxpayer never lawfully possessed has an unmistakable punitive character. This tax, imposed on criminals and no others, departs so far from normal revenue laws as to become a form of punishment.

Taken as a whole, this drug tax is a concoction of anomalies, too far removed in crucial respects from a standard tax assessment to escape characterization as punishment for the purpose of double jeopardy analysis.^[24]

*784 V

Because Montana's tax is fairly characterized as punishment, the judgment of the Court of Appeals must be affirmed. In Halper, we recognized that a civil penalty may be imposed as a remedy for actual costs to the State that are attributable to the defendant's conduct. 490 U. S., at 452. Yet as The Chief Justice points out, tax statutes serve a purpose quite different from civil penalties, and Halper `s method of determining whether the exaction was remedial or punitive "simply does not work in the case of a tax statute." Post, at 787 (dissenting opinion). Subjecting Montana's drug tax to Halper `s test for civil penalties is therefore inappropriate. Even if it were proper to permit such a showing, Montana has not claimed that its assessment in this case even remotely approximates the cost of investigating, apprehending, and prosecuting the Kurths, or that it roughly relates to any actual damages that they caused the State. And in any event, the formula by which Montana computed the tax assessment would have been the same regardless of the amount of the State's damages and, indeed, regardless of whether it suffered any harm at all.

This drug tax is not the kind of remedial sanction that may follow the first punishment of a criminal offense. Instead, it is a second punishment within the contemplation of a constitutional protection that has "deep roots in our history and jurisprudence," Halper, 490 U. S., at 440, and therefore must be imposed during the first prosecution or not at all. The proceeding Montana initiated to collect a tax on the possession of drugs was the functional equivalent of a successive criminal prosecution that placed the Kurths in jeopardy a second time "for the same offence."

The judgment of the Court of Appeals is affirmed.

It is so ordered.

*785 Chief Justice Rehnquist, dissenting.

Without giving any indication that it is doing so, the Court's opinion drastically alters existing law. We have never previously subjected a tax statute to double jeopardy analysis, but under today's decision a state tax statute is struck down because its application violates double jeopardy. The Court starts off on the right foot. It correctly recognizes that our opinion in United States v. Halper, 490 U. S. 435 (1989), says nothing about the possible double jeopardy concerns of a tax, as opposed to a civil fine like the one confronted in Halper. Ante, at 777. I agree with the Court's rejection of the Halper mode of analysis, which, with its effort to determine whether a penalty statute is remedial or punitive, simply does not fit in the case of a tax statute. Ante, at 783. But the Court then goes astray and the end result of its decision is a hodgepodge of criteria—many of which have been squarely rejected by our previous decisions—to be used in deciding whether a tax statute qualifies as "punishment."

The Court cites the case of Helvering v. Mitchell, 303 U. S. 391 (1938), as one in which a tax statute was subjected to double jeopardy analysis. But I agree with the Court's statement that the "penalty at issue in Mitchell is arguably better characterized as a sanction for fraud than a tax." Ante, at 779, n. 16.^[1] All of our other cases in this area of *786 the law involved claims of double jeopardy where a statute imposing what was denominated a "civil penalty" was invoked following a separate criminal proceeding based on an indictment for fraud. In Mitchell, supra, United States ex rel. Marcus v. Hess, 317 U. S. 537 (1943), and Rex Trailer Co. v. United States, 350 U. S. 148 (1956), the double jeopardy claim was rejected; in United States v. Halper, supra, a double jeopardy claim was upheld for the first time.

The Court, unlike the Court of Appeals below, wisely does not subject the Montana tax to the Halper analysis and it is thus unnecessary to determine whether Halper was correctly decided. See post, at 802-805 (Scalia, J., dissenting). This clearly is not the "rare case" contemplated by Halper, nor does this tax involve a "fixed-penalty provision." Halper, supra, at 449. In Halper, we held that the double jeopardy test was whether or not the penalty statute there enabled the Government to recover more than an approximation of its costs in bringing the fraudulent actor to book, because compensation for the Government's loss is the avowed purpose of a civil penalty statute. But here we are confronted with a tax statute, and the purpose of a tax statute is not to recover the costs incurred by the Government for bringing someone to book for some violation of law, but is instead either to raise revenue or to deter conduct, or both. See, e. g., Welch v. Henry, 305 U. S. 134, 146 (1938); Sonzinsky v. United States, 300 U. S. 506, 513 (1937). Thus, despite Justice O'Connor's attempt to view this case through the Halper lens, post, at 793, the reasoning quite properly employed in Halper to decide whether the exaction was remedial *787 or punitive simply does not work in the case of a tax statute. Tax statutes need not be based on any benefit accorded to the taxpayer or on any damage or cost incurred by the Government as a result of the taxpayer's activities. Commonwealth Edison Co. v. Montana, 453 U. S. 609, 622 (1981). Thus, in analyzing the instant tax statute, the inquiry into the State's "damages caused by the [Kurths'] wrongful conduct," post, at 794 (O'Connor, J., dissenting), is unduly restrictive.

The proper question to be asked is whether the Montana drug tax constitutes a second punishment under the Double Jeopardy Clause for conduct already punished criminally. The Court asks the right question, ante, at 780, but reaches the wrong conclusion.

Taxes are customarily enacted to raise revenue to support the costs of government. Cf. ante, at 779-780 ("[T]axes are typically different [than fines, penalties, and forfeitures] because they are usually motivated by revenue-raising . . . purposes"). It is also firmly established that taxes may be enacted to deter or even suppress the taxed activity. Constitutional attacks on such laws have been regularly turned aside in our previous decisions. In A. Magnano Co. v. Hamilton, 292 U. S. 40 (1934), for example, the Court upheld against a due process challenge a steep excise tax imposed by the State of Washington on processors of oleomargarine during the depths of the depression. In Sonzinsky v. United States, supra, at 513, the Court upheld an annual federal firearms tax as a valid exercise of the taxing power of Congress. The Court there said "it has long been established that an Act of Congress which on its face purports to be an exercise of the taxing power is not any the less so because the tax is burdensome or tends to restrict or suppress the thing taxed." In United States v. Sanchez, 340 U. S. 42 (1950), the Court upheld the former federal tax on marijuana at the rate of $100 per ounce against a challenge that the tax was a penalty, rather than a true tax. In so doing, the Court *788 noted that "[i]t is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activity taxed." Id., at 44. And, as the Court concedes, ante, at 778-779, it is well settled that the unlawfulness of an activity does not prevent its taxation. Marchetti v. United States, 390 U. S. 39, 44 (1968); United States v. Constantine, 296 U. S. 287, 293 (1935).

The Court's opinion today gives a passing nod to these cases, but proceeds to hold that a high tax rate and a deterrent purpose "lend support to the characterization of the drug tax as punishment." Ante, at 781. The Court then discusses "[o]ther unusual features" of the Montana tax which, it concludes, brands this tax as a criminal penalty.

The Court first points to its conclusion that the so-called tax is conditioned on the commission of a crime, ibid., a conclusion that the State disputes, and for good reason. The relevant provision of the rule, Mont. Admin. Rule 42.34.102(1) (1988), which provides that the tax return "shall be filed within 72 hours of . . . arrest," merely acknowledges the practical realities involved in taxing an illegal activity.^[2] Then, quite contrary to the teachings of Marchetti, Constantine, and James v. United States, 366 U. S. 213 (1961), the Court states that the justifications for mixed-motive taxes—imposed both to deter and to raise revenue—vanish "when the taxed activity is completely forbidden." Ante, at 782.

*789 A second "unusual feature" identified by the Court is that the tax is levied on drugs that the taxpayer neither owns or possesses at the time of taxation. But here, the Court exalts form over substance. Surely the Court is not suggesting that the State must permit the Kurths to keep the contraband in order to tax its possession. Cf. Constantine, supra, at 293 ("It would be strange if one carrying on a business the subject of an excise should be able to excuse himself from payment by the plea that in carrying on the business he was violating the law"). And although Montana's "Dangerous Drug Tax" is described as a tax on storage and possession, it is clear from the structure and purpose of the Act that it was passed for the legitimate purpose of raising revenue from the profitable underground drug business. 1987 Mont. Laws, ch. 563 (preamble).^[3]

I do not dispute the Court's conclusion that an assessment which is labeled a "tax" could, under some conceivable circumstances, *790 constitute "punishment" for purposes of the Double Jeopardy Clause. Ante, at 778, and n. 15, 779. The Court made a similar finding in United States v. Constantine, supra, although in the context of a different sort of challenge. At issue in that case was the validity of a special $1,000 excise tax levied against all persons dealing in the liquor business contrary to local law. Id., at 289, n. 1. In striking down the tax as an unlawful penalty rather than a tax, the Court noted that the assessment was conditioned on the imposition of a crime, and that iotas "highly exorbitant." Id., at 295.

But the Constantine factors are not persuasive in the present context. As discussed above, I do not find the conditioning of the tax on criminal conduct and arrest to be fatal to this tax's validity; this characteristic simply reflects the reality of taxing an illegal enterprise. Furthermore, the rate of taxation clearly supports petitioner here. In Constantine, the special $1,000 excise tax on the sale of alcohol was 40 times as great when compared to the otherwise applicable $25 fee for retail liquor dealers such as respondent. Ibid. When compared to the Montana tax, two points are noteworthy. First, unlike the situation in Constantine, no tax or fee is otherwise collected from individuals engaged in the illicit drug business. Thus, an entire business goes without taxation. Second, the Montana tax is not as disproportionate as the additional excise tax in Constantine. The Court makes much of the fact that the bulk of the assessment— that imposed on the low-grade "shake"—was more than eight times the market value of the drug. Ante, at 780. But the Court glosses over the fact that the tax imposed on the higher quality "bud" amounted to only 80% of that product's market value