Tax Happy - taxation on recording media in Canada - Brief Article

Reason, April, 2000 by Jeff A. Taylor

What better way to make money than to have the taxman rake in your take?

The American recording industry starting pressing for that idea back in the '80s, declaring victory in October 1992, when President George Bush signed the Audio Home Recording Act. That law taxes all digital audio recording devices at 2 percent of the wholesale price and all digital audio recording media at 3 percent of the wholesale price. The money is then routed back to the Register of Copyrights and Librarian of Congress to be disbursed to representatives of the recording industry for an artists' fund.

Now officials at the Copyright Board of Canada have taken the idea a step further, slapping a tax on all recording media, analog and digital] alike. The estimated $9 million take will then be sent to Canada's Heritage Ministry to support "uniquely" Canadian artists, composers, and publishers--including, in theory, such hand-to-mouth acts as Shania Twain and Celine Dion.

The tax adds 23 cents to the price of every blank cassette and up to 61 cents to each digital format, such as mini-discs or burn-your-own CDs. There are exemptions for a number of users, including religious organizations, broadcasters, law enforcement agencies, courts, and education officials. Interestingly, the music industry managed to exempt itself, along with its buddies in the advertising world.

The scheme has already ignited a Web-based protest at sites like www.canthetax.com, but like its U.S. cousin, the Canadian private tax is likely here to stay.