Washington, D.C. (December 4, 2020)—It’s time for music production to be seen and treated the same way as film, TV and theater productions, according to the HITS Act. The new, proposed Help Independent Tracks Succeed Act, introduced this past Wednesday, would allow musicians, engineers and producers to deduct 100 percent of recording production expenses in the year those costs were incurred, rather than in later years.
The bipartisan-backed bill was introduced on December 3, by Senators Dianne Feinstein (D-Calif.) and Marsha Blackburn (R–Tenn.), and companion legislation was introduced in the House by Representatives Linda Sánchez (D-Calif.) and Ron Estes (R-Kan.).
Under the current federal tax code, film, television and theater productions can already fully deduct production expenses in the year they are incurred; a glaring omission from that support of the arts and the industries surrounding them, however, is music production. If the HITS Act were enacted, claimants would be able to deduct up to $150,000 in recording production expenses in the year those costs were incurred. As a caveat, the deduction would only be available for “Qualified Sound Recording Production[s],” which the act defines as “a sound recording…produced and recorded in the United States.”
“Because most large, public gatherings have been prohibited since the pandemic began, musicians and music producers have been among the hardest hit by the Coronavirus,” said Senator Feinstein in a statement. “Our bill would provide relief by allowing 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 is in line with how expenses are treated for film, television and theater productions, and it makes sense to create parity for music productions.”
Senator Blackburn, added, “This bipartisan legislation will provide additional tax deductions to ease the burden facing our creative community by allowing our independent artists to fully deduct the cost of producing their music.” The move for additional support to recording pros and musicians comes at a time when the pandemic has severely curtailed business for many. According to the Copyright Alliance survey in June, 88 percent of creators had lost income due to the coronavirus pandemic—more than double the national average for other industries. Approximately half of the respondents had lost 90 percent or more of their income.
Noting that the Senate companion to the House bill already enjoys broad, bipartisan support, Harvey Mason jr., chair and interim president/CEO of the Recording Academy, said in a statement that the introduction of the HITS Act in the Senate “lays the groundwork for creators to produce new music and create jobs amidst a year filled with economic uncertainty. This change in the tax code—similar to the tax treatment of other creative industries—will incentivize more music production.”