iTunes in Canada

#1

Hi Folks. Has anybody noticed a recent change at iTunes? As of January 1st, this year, they are charging sales tax, which in my neck of the woods is 15%. Normally, I barely look at my receipts, but last night I looked at one and something seemed off. Then I clued in: It included HST.

I know that many companies, and the canadian government have been talking about taxing the internet and what we buy there. And in many cases we already are charged tax on purchases sold in Canada. Foreign purchases are always a wild card, like MassDrop. This one surprised me though. It is like someone just closed your loophole.:slightly_smiling_face:

There is a lot of noise about taxing Netflix too. With the LARGE recent increase, this would sting pretty good.

Just an FYI for people (like me) that don’t pay attention.

ShaneD

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#2

Prior to January 1, 2019, iTunes only charged sales tax on the purchase of apps but as you have discovered, sales tax is now also charged on TV, music, movie and audiobook purchases. As online digital sales are rapidly overtaking the sale of their physical equivalent, it should not be surprising that the government would tax those items to make up for losses in the physical domain, but Apple did not publicly announce that they were doing this. So that’s Apple’s bad. While I understand the government’s rational for this, my concern is about the possibility of being taxed twice for the same product if I choose to own it in both its digital and physical formats.

I think the Internet tax you mention is a proposal by Canadian musicians and the Screen Composers Guild of Canada for a broadband copyright tax. The idea is an extension of the Private Copying Tariff that is a tariff on recordable media, such as blank CDs, DVDs, audio cassettes, etc. Instead of making the copying of recorded copyright material for personal use illegal, the tariff was introduced to ensure that rights holders be compensated. About two-thirds of the levy’s revenue goes to the Society of Composers, Authors and Music Publishers of Canada and other organizations that distribute the funds based on commercial radio airplay and commercial sales samples . During the Napster days and since there has been pressure to extend the tariff to the memory portion of digital audio players but the courts have prevented this.

There has been a lot of opposition the to the broadband copyright tax and I highly doubt it will ever be implemented for a variety of obvious reasons that perhaps deserves a thread of its own if anybody is interested. Remarkably, the Private Copying Tariff still exists even though the blank recordable media the tax is applied to are almost obsolete.

Regarding Netflix, it is only in the province of Quebec, where I live, that sales tax is being charged for their service. This is the result of heavy lobbying by broadcasters and local creators of content who felt it unfair that their products be taxed while Netflix services remains exempt. Being a small island of French language speakers in a vast ocean of Anglophones, there is very strong sentiment in this province that Quebecois creative industries be protected. And yes, with the increase in Netflix fees, in Quebec it does sting.

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#3

I understand the government has to collect their money and I appreciate the services we get in this country.

While I am no expert, I think iTunes was the best thing to Ever happen to musicians. If they follow the same formula as their apps and give musicians 70% of the money, I would think that is like winning the lotto for musicians. I’ll bet that in the old days when we were paying $12.00 to $14.00 for crap albums/CD’s with two or three good songs, artists were probably only getting a buck an album. Big bands got huge signing bonuses to make up for that but I am sure the Vast majority didn’t.

Artists biggest problem now is a generation of thieves. If it’s digital (movies, music, software, etc.), they’re not going to pay for it.

Quebec certainly does go it’s own way, for better or worse.

ShaneD

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#4

I agree. Even the big bands/performers were getting screwed. In every music book/biography and documentary I have read and watched there are 2 common elements;

  1. keeping a band together is very difficult because of infighting

  2. getting ripped off by the labels, managers and lawyers is the norm, with a few exceptions

Publishing rights were more often than not signed away and the musicians had to pay back recording studio, marketing and touring costs at exorbitant rates - all of which came out of their signing bonuses and royalties that they often did not see a dime of until their “debts” were paid.

As you probably know, the Beatles did not own the rights to their songs for most of their lives. Paul McCartney’s legal battle to regain ownership of his share of the Beatles’ catalogue, which Michael Jackson owned for a brief while (he also owned the rights to many Bruce Springsteen, Rolling Stones and Elvis songs) wasn’t settled until 2017.

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