As I understand it, this is due to a taxation issue. Apps purchased in the Canadian store are subject to sales taxes at point of sale, and it would seem that Apple decided that rather than absorb that cost in the value of the gift card, they instead passed the tax onus back to the consumer. Hence the requirement to pay for apps by credit card. I don't know why this same tax rule doesn't apply to movie rentals and music downloads from the Cdn store (but hey...I'm not gonna complain). Anyhow, apps purchased in the US store aren't taxed at point of sale, so you can use a US gift card for those purchases.
The tax difference (combined with the fact that gift cards are not taxed in some states when you buy it retail) nearly negates the difference you pay on the US/CDN exchange when buying a US card. Nearly. As in enough that I can justify it when I'm shopping state-side.
That's not exactly true. I have bought apps with my US itunes card, and have been charged tax. My last purchase was a $1.99 app. I was charged $2.15 with tax. That leaves me with $.88 in my account.
If the tax can be taken from the card, there is really no reason why it can't be done in Canada too. But I guess itunes doesn't really care, because they are still getting Canadian business one way or another. It would just be so much more convenient, and it would save me from having to flip between accounts to make sure I am in the right store before purchasing.
In any case, the US store has much more to offer in terms of music and videos, so either way, I probably would have had to get a US account anyway.
Capjap, check the receipt they emailed you post-sale. It should indicate which account was charged, which (if any) taxes were charged, and whether you were billed to the store card or credit card. I checked mine and the only ones that were taxed were the few cases where I bought an app via the Canadian store as opposed to the US one. And in those cases, they dinged my credit card on file rather than the CDN gift card I have for that account.
Maybe there's something particular about the way your account was set up? The billing address in your US account...is it in a state that doesn't charge state tax (i.e., Oregon)?
Anyone else finding that they're being taxed on US store purchases?
Your bill-to address is in NY, which has a state tax. It's interesting that Apple is letting the taxes be paid from the gift card for the US store and yet won't do the same for the Canadian one. According to posts on Apple's discussion group, the reply from Apple about apps on the Canadian store is essentially this: "iTunes Gift Cards may not be used on the Canadian store to purchase applications and games."