Controversial 'iPod Tax' Struck Down

by Mike Godfrey, Tax-News.com, Washington

15 January 2008

A Canadian court of appeal last week branded an additional proposed tax on media recording and storage devices, designed to compensate recording artists for piracy of their work, as illegal.

Had this tax been implemented, devices such as Apple's iPod would have been subjected to a tariff which would have seen unit prices rocket by between C$5 and C$75 dollars, depending on the capacity of the media player.

The tax, proposed by the Copyright Board of Canada, would have hit 30 to 80 gigabyte storage devices the hardest, according to reports, increasing some of the prices by up to 29%.

Judge Karen Sharlow wrote, according to Bloomberg, that the Copyright Board had "no legal authority to certify a tariff on digital audio recorders or on the memory permanently embedded in digital audio recorders".

Retail Council of Canada president, Diane Brisebois announced in a statement over the weekend that:

"This has been a very long battle, but a necessary one. Retailers have fought against these levies since their creation in 1997 because it taxes a product based on what a consumer possibly could use it for."

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