eBay Powersellers Now Threatened By Possible Tax Audits
Based on the (thankfully) limited time I have spent in and around prison, there is a clearly defined pecking order amongst inmates, with child molesters occupying the nadir and (failed) bank robbers at the zenith. Illegal immigrants and petty crooks generally fall comfortably in the middle. But I wonder where someone being sent to prison for failing to report income earned from selling porcelain knickknacks or toy trains on eBay will fit in?
We soon might find out. eBay Canada has announced that it will comply (albeit reluctantly) with an order from the Federal Court of Appeal to release to the Canada Revenue Agency gross sales data from 2004 and 2005 for eBay PowerSellers. Participants in the PowerSeller program must average at least $1,000 in sales per month for at least 3 months.
When I heard this news I had to go back and check my old eBay information to see if I was affected. In 2004, I had substantial sales on eBay and tried to get in on the PowerSeller program, but my numbers were just a smidge below the threshold so I wasn’t allowed to join their uppity little club. At the time I was a little pissed, but in hindsight I’m pretty glad they didn’t want me, given that one of the big perks of this optional club has now become CRA audits. It’s kind of like signing up for a Club Z card at Zeller’s and getting a free rectal exam from an angry proctologist with big hands and jagged fingernails. I didn’t want to be in their stupid club anyway.
This should serve as a nice little reminder- if you’re making money, you’re going to be taxed on it. There are all kinds of wonderful ways to reduce your tax burden legally, but hoping that nobody picks up on the thousands of dollars you’re making selling things online isn’t one of them. If you’ve misreported in the past, or failed to include income that probably should have been included, talk to a tax lawyer or accountant to see what can be done. CRA has a voluntary disclosures program that allows you to correct these mistakes and possibly avoid prosecution.
If you’re just selling random junk on eBay, you probably don’t have to worry about the taxman coming to call. While any gains from selling property (even personal items) are taxable, you’re only taxed if there’s an actual gain - that is, you sold it for more than you paid. For the vast majority of people just getting rid of stuff they found in the attic, there’s not going to be any gain at all. Even if you do make a little bit of profit, there’s a $1,000 exemption for most personal property, so you only get taxed on any profit in excess of $1,000. If you’re turning thousand dollar profits on random items lying around your garage that aren’t bags of marijuana, I’m impressed. However, if you’re buying or collecting items for the purpose of selling them online you need to be aware that there may be tax consequences. When your eBay-ing turns into a business, you get taxed just like the rest of us. I don’t like being taxed either, but it’s surely better than the notoriously bad turkey soup at Her Majesty’s Penitentiary.
[thanks to money grubbing lawyer and mike knell via cc]
Canada’s ADISQ Calls For a Stop to Copying CDs at Libraries
Those who argue for balanced copyright policies are often characterized as anti-copyright. Yet in my research I’ve seen at least two examples that suggest that the characterization (which I would prefer not be used at all) might be appropriately applied to the collectives, at least with respect to how the Supreme Court of Canada interprets copyright.
First, Quill and Quire, a Canadian publication on the book industry, featured a revealing article on pressure from Quebec creator groups against the Grand Bibliothèque, Montreal’s new library. The library reportedly boasts an impressive collection of works from Quebec creators, including 13,000 films and 90,000 CDs and DVDs. The library permits personal copying by providing computers with CD burners in the library. It says that it is vigilant about ensuring that patrons do not make multiple copies.
Nevertheless, the copying has angered ADISQ, the Quebec association of performing artists and producers. The article notes that several ADISQ members are calling on the library to stop the copying of CDs from its collection. Eduardo Da Costa, the agent for a popular Quebec singer Marie-Chantal Toupin, says, “there’s no difference between copies sold at flea markets and those made in the library.”
Arguments that equate piracy in flea markets to private copying, which generated more than $39 million last year, are so far removed from what Canada’s courts say are the policy goals of copyright that advocates of that line of thinking could be characterized as anti-copyright.
Similarly, Access Copyright issued a press release responding to a CMEC press conference on education and copyright. Maureen Cavan, Access Copyright’ s Executive Director, is quoted as saying that “the government cannot legislate that Canada’s creators and publishers be made to work for free when their works are copied from the Internet instead of purchased, but that is precisely what would happen if they allow the exemption the education sector is seeking.”
Once again, arguments that suggest that the exercise of user rights forces creators to work for free distorts what the Canada’s courts say copyright is all about. The copyright protection that creators enjoy is based on a policy decision that providing such protection is in the public interest. The protection is not absolute: there are user rights that balance such protection and enable Canadians to copy works under appropriate circumstances without further compensation. This is particularly true in the education context, where there are broad exceptions for research and private study.
What is most troubling about the anti-copyright rights holder view is its impact on those who sit in the middle. The Supreme Court of Canada has ruled that the Grand Bibliothèque is entitled to assume that their patrons will use their equivalent lawfully (much like the Great Library in Toronto). Similarly, the library is not only entitled to provide a paper copy to patrons, but following CCH is presumably entitled to provide patrons with faxed (and likely electronic) copies of those same works under the fair dealing user right.
That is the law as it is. Yet under pressure from anti-copyright rights holders, the library practices a law as rights holders would like it to be, finding it necessary to be vigilant about stopping multiple copies and declaring that it “is ready to work out more stringent anti-pirating policies with interested parties.” The same is true of Canada’s universities, who appear to have bought the Access Copyright vision of copyright hook, line, and sinker, paying millions in annual license fees for copying that is likely covered by their user rights.
[thanks to michael geist and kitonlove via cc]
Dave Matthews Band Gives Instructions on Beating Music DRM
The CD version of Stand Up, the release from the Dave Matthews Band, contains copy control technology that is ostensibly designed to limit or prevent copying. The technology doesn’t do a particularly good job at stopping copying, however, though it is very good at annoying consumers. Artists don’t appear to be fans either. The Dave Matthews Band has posted instructions on their website for how to work around the technology to copy the songs on the CD for playback on an iPod.
INFORMATION REGARDING DOWNLOADING STAND UP SONGS TO IPODS
Please follow the instructions below in order to move your content into iTunes and onto an iPod:If you have a Mac computer you can copy the songs using your iTunes Player as you would normally do.
If you have a PC place the CD into your computer and allow the CD to automatically start. If the CD does not automatically start, open your Windows Explorer, locate the drive letter for your CD drive and double-click on the LaunchCD.exe file located on your CD.
Once the CD has been burned, place the copied CD back into your computer and open iTunes. iTunes can now rip the songs as you would a normal CD.
Please note an easier and more acceptable solution requires cooperation from Apple, who we have already reached out to in hopes of addressing this issue. To help speed this effort, we ask that you use the following link to contact Apple and ask them to provide a solution that would easily allow you to move content from protected CDs into iTunes or onto your iPod rather than having to go through the additional steps above.
For Macintosh users such as myself, there is nothing additional to do, since the copy-control technology does not work on a Mac. For Windows users, there is no need to hack the program since making several permitted copies using different programs eventually leads to the songs ending up on your iPod. I’m not sure about Linux users, though I am guessing that the copy control doesn’t work on their systems either.
The Dave Matthews Band posting and its label’s use of copy-control technology raises several issues. The web instructions also highlight the continuing divide between the labels and artists (see the iTunes related reaction of Japanese artists to Sony Records for another example).
I’d like to focus on two other issues here though. First, the private copying implications. The Dave Matthews Band may support their fans copying their music onto iPods, but Canadian law still does not. Canadians that follow the band’s instructions appear to infringe Canadian law. Moreover, it is worth noting the recent remarks of RIAA CEO Mitch Bainwol. In a speech to NARM, Bainwol commented that the RIAA has “no objection to personal use burning”. This raises the question of why Canadians are stuck paying millions for the private copying levy, when the levy doesn’t cover the copying they typically engage in, the artists have only received a fraction of the money collected, and the industry itself does not object to the copying (and in the U.S. at least does not expect any additional compensation for such copying).
Moreover, consider these instructions within the context of Bill C-60 and its anti-circumvention provision. The provision applies to a “technological measure,” which is defined as “any technology, device or component that, in the ordinary course of its operation, restricts the doing . . .of any act” that would constitute an infringement of several different Copyright Act provisions. Section 34.02 of Bill C-60 provides copyright owners with a basket of rights against anyone who “circumvents, removes, or renders ineffective a technological measure” for the purpose of copyright infringement.
This brings us to the question of these provisions and copy control technology. First, leaving aside the private copying issue, consumers that follow the Dave Matthews Band instructions would not appear to run afoul of this particular provision since they are not circumventing anything. Mac users are proceeding as usual, while Windows users are using the functionality built into the copy control mechanism to make their desired copies.
Second (and more interestingly), does the copy control technology even qualify as a technological measure under Bill C-60? If it does, should it? I don’t think we have a clear answer here. Other jurisdictions focus on the effectiveness of the technological measure. Given the Dave Matthews Band instructions, it is hard to see how these measures are effective. In Canada, however, the bill speaks of “ordinary use.” The copy-control may be advertised as being ordinarily used to control copying, even if it does nothing of the sort. It should not be enough to simply characterize a technology as a technological measure and immediately enjoy legal protections. The failure to include an effectiveness standard in Bill C-60 is yet one more reason why Canadians should stand up to the proposed copyright reform package.
[thanks to shazari and michael geist via cc]
