Representatives Linda Sánchez (D-CA) and Ron Estes (R-KS) and Senators Dianne Feinstein (D-CA) and Marsha Blackburn (R-TN) introduced the bipartisan Help Independent Tracks Succeed Act, a bill that would allow musicians, technicians, and producers to deduct 100 percent of recording production expenses in the year they are incurred, rather than in later years.
The federal tax code already allows film, television and theater productions to fully deduct production expenses in the year they are incurred, but not music production expenses. Implementing this change would help these entertainment professionals recover from the economic downturn brought on by the COVID-19 pandemic.
“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 Linda Sánchez (D-CA). “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."
“As for so many Americans, shutdowns and social distancing brought havoc for small recording artists over the past year,” said Congressman Ron Estes (R-KS). “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.”
“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 Dianne Feinstein (D-CA). “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.”
“The music from Nashville strikes a chord with folks across the nation,” said Senator Marsha Blackburn (R-TN). “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.”
The bill would allow up to $150,000 in recording production expenses to be deducted in the year they are incurred, rather than in later years.
According to the Copyright Alliance survey last year, 88 percent of creators had lost income due to the coronavirus pandemic, which was more than double the national average for other industries. Approximately half of the respondents had lost 90 percent or more of their income.
In addition to Representatives Sánchez and Estes, the bill is cosponsored in the House by Representatives Judy Chu (D-CA), Michael McCaul (R-TX), Suzan DelBene (D-WA), and Grace Napolitano (D-CA).
The HITS Act is supported by the Recording Academy, American Association of Independent Music, 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.
“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.”
“As we begin to see the light at the end of the tunnel of the pandemic, independent music creators are still struggling with the devastating financial impact it has wrought" said Richard James Burgess, President and CEO of A2IM (American Association of Independent Music), a trade association with more than 650 members in more than 30 states. "While we all move forward into what we hope will be a brighter summer and fall, the HITS Act would provide much-needed tax savings for recording artists and their label partners to reinvest in new projects. This has the dual benefit of incentivizing job creating activity in our industry and helping artists make ends meet. We are grateful to the Members of Congress who have worked so hard on this bill.”