Canadian Court Overturns ‘iPod Tax’ in Apple Canada Inc. and Canadian Private Collective, A-369-07. Federal Court of Appeal ( Ottawa).

February 2008

Internet, technology

The levy system in Canada is once more in the news after a proposed tax on digital recorders and storage devices, such as Apple Inc.’s iPod media player, was held to be is illegal by the federal court of appeal overturning a Copyright Board ruling that set a tariff that would have increased unit prices as much as C$75 (£35) on devices capable of storing more than 30 gigabytes of memory, the target of the highest level of the tax. The tariff would have raised the cost of an 80-gigabyte iPod by 29 percent to C$335. The court ruled that the Board “has no legal authority to certify a tariff on digital audio recorders or on the memory permanently embedded in digital audio recorders,’ and ordered the copyright board to reconsider the case.  The fees, ranging from C$5 for digital devices capable of storing less than 1 gigabyte of information to the C$75 maximum were proposed to compensate the recording industry for music that was copied. The levy would have created an exception to copyright law, allowing Canadians to copy their music files freely to hard drives and portable storage devices like iPods. Apple, Microsoft and other makers of digital storage devices or digital players objected to the rationale for the tax, saying digital storage devices aren’t just used to hold copied music. The Retail Council of Canada, which also lobbied against the tax proposal, said shoppers would buy players that weren’t taxed in the U.S. or on the Internet.

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