The legislation, which was excluded from the last two pandemic relief packages, would allow creators to deduct 100% of recording expenses in the first year.
The Help Independent Tracks Succeed (HITS) Act has gotten a second life in Congress.
On Tuesday (March 16), all four original sponsors of the bill — Reps. Linda Sánchez (D-CA) and Ron Estes (R-KS) and Sens. Dianne Feinstein (D-CA) and Marsha Blackburn (R-TN) — reintroduced the long-simmering legislation, which would allow musicians, technicians and producers to deduct 100% of recording expenses up to $150,000 on their taxes in the year they’re incurred. The bill is fundamentally unchanged from its previous incarnations (introduced July 31 in the House, and the companion bill in the Senate on Dec. 3), which failed to pass as part of the last two pandemic relief packages despite intense lobbying from independent music advocates to have it included.
Under the current tax code, music creators are required to amortize production expenses for tax purposes over the economic life of a sound recording, a period that usually ranges between three and four years. If passed, the HITS Act would apply the same tax standard to music as it does film and TV productions, which already enjoy a 100% first-year deduction, helping music professionals recover from the severe economic downturn caused by the COVID-19 pandemic. According to a Copyright Alliance survey last year, 88% of creators lost income during the decline, more than double the national average for other industries. Roughly half of respondents lost 90% or more of their income.
“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 Sánchez in a statement. “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.”
Added Estes, “As for so many Americans, shutdowns and social distancing brought havoc for small recording artists over the past year. 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.”
In addition to Sánchez and Estes, the HITS Act is cosponsored in the House by Reps. Judy Chu (D-CA), Michael McCaul (R-TX), Suzan DelBene (D-WA) and Grace Napolitano (D-CA).
“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 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.”
Blackburn, whose home state of Tennessee includes Music City, added, “The music from Nashville strikes a chord with folks across the nation. 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 HITS Act is supported by a huge number of music advocacy organizations, including 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.”
“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,” added Richard James Burgess, president and CEO of A2IM (American Association of Independent Music), a trade association with over 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.”
Originally Article HERE