Blank media tax
A blank media tax (or blank media levy) is a government-mandated scheme in which a special tax (additional to any general sales tax) is levied on recordable media. Such taxes are levied in various counties and the income is typically allocated to the developers of "content".Such a tax may be linked to a corresponding relaxation of copyright law, by permitting the recording of copyrighted works on media for which the tax has been paid. It may operate in principle as a system of collectivisation, partially replacing a property approach of sale of individual units.
A difficulty that immediately arises is the practical impossibility of devising a mechanism for distributing the proceeds to copyright holders that is considered "fair" by all copyright holders. Implemented systems are typically restricted to music and may distribute the proceeds proportionally to a measurement of sales of CDss in music shops or amount of air-play on radio or the like. This will ignore other distribution channels such as the Internet. Fairer methods would arguably involve extensive sampling of purchasers to determine actual recording behaviour, or alternatively paying all musicians at a simple flat-rate (the preferred method will depend on ones political views).
An implementation question that arises is whether the tax applies to any type of copyrighted work or is restricted to a limited field such as music. If it is restricted then the issue arises of how to collect the tax on media which can also be used for other purposes. The options include:
- Collecting the tax on all media, regardless of the end use, and ignoring the injustice to purchasers with non-covered uses
- Allowing taxed and untaxed media to be sold, but with only the taxed media providing the copyright-relaxation benefits.
- Collecting the tax on all media but allowing purchasers to claim a refund for media applied to non-covered uses.
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A scheme was introduced in Canada in 1999 or 2000, following a modication of the Canadian copyright act. The power to set rates and distribute the returns is vested in the Copyright Board Canada. The Copyright Board has handed the task of distributing the funds to the Canadian Private Copying Collective, which is a private organisation. The Copyright Board has retained the task of setting the rate of the tax.
In Canada:
17 USC 1008, from the Audio Home Recording Act of 1992, says that non-commercial copying by consumers of digital and analog musical recordings is not copyright infringement. Non-commercial includes such things as resale not in the course of business, perhaps of normal use working copies which are no longer wanted. It's unlikey to include resale of copies in bulk and Napster tried to use the Section 1008 defence but was rejected because it was a business.
From House Report No. 102-873(I), September 17, 1992: "In the case of home taping, the [Section 1008] exemption protects all noncommercial copying by consumers of digital and analog musical recordings" .
From House Report No. 102-780(I), August 4, 1992: "In short, the reported legislation [Section 1008] would clearly establish that consumers cannot be sued for making analog or digital audio copies for private noncommercial use".
Canada
United States
Audio home recording in general
Blank music CDs
17 USC 1008 bars copyright infringement action and 17 USC 1003 provides for a royalty of 3% of the initial transfer price. The royalty rate in Section 1004 was established by the Fairness in Music Licensing Act of 1998. This only applies to CDs which are labelled and sold for music use, not to blank computer CDs. Section 1008 still means that copying onto non-music CDs is not copyright infringement.