Today, the bipartisan and bicameral Help Independent Tracks Succeed (HITS) Act was reintroduced in Washington. The Senate version of the bill is again introduced by Sens. Dianne Feinstein (D-Calif.) and Marsha Blackburn (R-Tenn.), and the companion bill in the House of Representatives is sponsored by Reps. Linda Sánchez (D-Calif) and Ron Estes (R-Kan.). The House bill is also supported by Reps. Judy Chu (D-Calif.), Suzan DelBene (D-Wash.), Michael McCaul (R-Texas), and Grace Napolitano (D-Calif.).
The HITS Act, which was first introduced last Congress, is designed to allow artists and record producers to deduct 100 percent of sound recording production expenses in the year they are incurred, rather than amortized over the life of the recording, typically 3-4 years. The bill eases the financial burden placed on independent artists by removing the multi-year amortization requirement and allowing an individual to fully expense the cost of new studio recordings on their taxes, up to $150,000.
The HITS Act also aligns the tax code for music production with similar provisions for other creative industries. Currently, qualified film, live theatrical, and television production companies enjoy the ability to deduct 100 percent of their production expenses in the year such expenses are incurred.
The HITS Act would also incentivize the production of new sound recordings at a time when music creators still need help overcoming the financial fallout resulting from the COVID-19 pandemic. With tours canceled and gigs indefinitely delayed, many creatives are left without access to their traditional revenue streams. Congress continues to address the unequal impact felt by the creative workforce through enhanced unemployment insurance, extending Small Business Administration loan programs, and creating targeted relief programs for independent venues.
While these relief programs are a welcomed resource for the music ecosystem, Congress must continue to provide targeted assistance for the most vulnerable creators – independent artists. That is why the Recording Academy collaborated with policymakers on finding a solution that encourages and incentivizes the creative workforce to safely return to the studio.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Music producers & creators were among the first out of work as tours were canceled, venues shuttered, & studio sessions were postponed.<br><br>The HITS Act will make things just a little easier for the small, independent creators who make the music we love!<br><br>▶️ <a href="https://t.co/lZnvgzUNvd">https://t.co/lZnvgzUNvd</a> <a href="https://t.co/wWwEelPe6W">pic.twitter.com/wWwEelPe6W</a></p>— Rep. Linda Sánchez (@RepLindaSanchez) <a href="https://twitter.com/RepLindaSanchez/status/1371929413999325184?ref_src=twsrc%5Etfw">March 16, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
The Academy applauds the reintroduction of the HITS Act. “A year after the pandemic brought social distancing and shutdowns, independent music creators have been hit hard, which is why the Recording Academy is pleased to support the reintroduction of the HITS Act,” said Harvey Mason jr., Chair and Interim President/CEO of the Recording Academy. “This bipartisan bill will change the tax code – putting music creators on a level playing field with other creative industries – helping thousands of independent creators get back on track by incentivizing music production, creating new opportunities and revitalizing the music economy. We thank Senators Feinstein and Blackburn and Representatives Sanchez, Estes, Chu, McCaul, DelBene, and Napolitano.”
“Like families and workers across the country, music producers and creators in each of our communities have been hit hard by this pandemic. In fact, they were among the first out of work as tours and festivals were canceled, venues shuttered, and studio sessions were postponed,” said Congresswoman Sánchez. “Today, I'm proud to re-introduce the HITS Act. This bill will make things just a little easier for the small, independent creators that make the music we often turn to during hard times like this."
“The pandemic has made it harder for many people to make ends meet, including musicians and music producers who have been among the hardest hit because of bans on large gatherings,” said Senator Feinstein. “Our bill would allow independent musicians, technicians and producers to deduct their production expenses in the same year they occur, rather than forcing them to spread those deductions out over several years. This change would help keep music creators afloat until we can again gather and listen to them in person.”
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">The pandemic has made it difficult for independent musicians, technicians and producers to make ends meet without being able to play live. We just introduced bipartisan legislation to help them recover. More information here:<a href="https://t.co/fzPc1iJGtx">https://t.co/fzPc1iJGtx</a></p>— Senator Dianne Feinstein (@SenFeinstein) <a href="https://twitter.com/SenFeinstein/status/1371938659667152902?ref_src=twsrc%5Etfw">March 16, 2021</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
“The music from Nashville strikes a chord with folks across the nation,” said Senator Blackburn. “However, the unique burdens faced by the arts community forced many to stop writing, performing, and producing altogether. The HITS act will provide targeted tax deductions to support our musicians and allow them to get back to work.”
“As for so many Americans, shutdowns and social distancing brought havoc for small recording artists over the past year,” said Congressman Estes. “The bipartisan HITS Act will help thousands of independent music creators around the country by providing common sense tax savings on certain expenses – giving this industry the targeted relief it needs as our nation recovers.”
Championed by the Recording Academy, the legislation is supported by many members of the music ecosystem, including the American Association of Independent Music (A2IM), SAG-AFTRA, Music Artists Coalition, Artists Rights Alliance, Recording Industry Association of America, National Music Publishers Association, SoundExchange, Global Music Rights, SESAC, National Independent Venue Association, National Independent Talent Organization, Future of Music Coalition, Digital Media Association, Nashville Songwriters Association International, ASCAP, BMI, Gospel Music Association, Christian Music Trade Association and Songwriters of North America.
As the only organization representing all music creators, the Academy thanks these members of Congress for standing with struggling creators by reintroducing the HITS Act, and looks forward to the passage of this landmark relief bill.
Take Action: Ask Congress to Pass the HITS Act
