Back in December 2003, taxes of $2, $15 and $25 were introduced for portable audio devices containing up to 1GB, 10GB and over 10GB of non-removable memory respectively.  But in December 2004, a Canadian Judge ruled that these taxes were illegal after retailers and electronic manufacturers filed a lawsuit against these taxes.  Apparently, no law gave the authority for these taxes and thus the Judge blocked these taxes temporarily until the Parliament could decide on what to do with this issue.

Later on, the Canadian Private Copying Collective (CPCC) which collects royalties on behalf of music artists tried appealing the ruling; however the Supreme Court of Canada has now refused to hear any more arguments on this appeal.  As a result, taxes for MP3 players can be totally done away with.  The CPCC were disappointed with this decision since they claim these products are sold for the purpose of copying music.  As MP3 players and other flash / HDD based devices can hold music just like blank media, the CPCC believes that levies should be applied to these since they can be used to illegally copy music.  If you copy this, please show appreciation by linking back to cdfreaks, thanks.
According to the Digital Access group, they say that the current levies applied to blank media are unfair, since consumers who purchase blank media for other purposes than storing music have no choice but to pay these levies.  An example includes businesses that use CDs for backing up data or distributing presentations, photos and other data on CD.  Consumers who do purchase music downloads are even penalised as they have to pay for the download as well as the blank media levy to take their music with them.  Around $4 million which was collected over the year digital audio device taxes were in effect must be returned to the manufacturers or importers of the affected products, although it is not clear if the consumers who were in-turn penalised will be reimbursed.  Lodai used our news submit to let us know of the following news:

This decision will be a great relief for both consumers and retailers since it means that the pricing on MP3 players can no longer be artificially inflated by taxes.  In my opinion, consumers should not have to be penalised for purchasing an MP3 player, especially with the high taxes that were imposed on players over 1GB.  It is like paying a hefty tax to purchase a portable CD player.  Hopefully the unlucky customers who purchased players during the affected period will be reimbursed. 

Source: Toronto Star - TheStar.com