US indie sector urges Congress to adopt the HITS Act

By Emmanuel Legrand

A group of some 120 executives from the US independent music sector from 19 states, led by American Association of Independent Music (A2IM) President and CEO Richard James Burgess (pictured, below), have sent a letter to Senate Majority Leader Charles Schumer (D-NY) and Speaker of the House Nancy Pelosi (D-CA) to urge them to include in the forthcoming Coronavirus Rescue Legislation a "modest" relief provision for the creation of recorded music.

  More specifically, the signatories of the letter — artists, managers, agents, executives and independent record label owners — have asked that the Help Independent Tracks Succeed (HITS) Act, sponsored by Senator Dianne Feinstein (D-CA), Representative Linda Sanchez (D-CA), Senator Marsha Blackburn (R-TN) and Representative Ron Estes (R-KS), be enacted into law.

  "The HITS Act would allow recording artists and their record label partners to immediately expense the cost of most indie projects, rather than having to spread out the tax benefit over time," reads the letter, adding that extending the provision to recordings would be "a reasonable, bipartisan and fiscally responsible measure that represents a needed lifeline for our suffering industry."

Important tax credits

  For A2IM, the legislation "would grant the same tax treatment to sound recording production costs that is currently afforded to other arts productions including live theater, television and motion pictures."

  “The American Rescue Plan already includes important tax credits to support working class families and recognises the economic importance of small businesses, especially in black and brown communities,” said Rosie Lopez, President of New York-based label Tommy Boy. "The HITS Act is a natural extension that recognizes the way our industry partners with artists by financing their projects."

Benefits for individuals too

  A2IM said one of the benefits of the HITS Act is that unlike many other relief proposals that entail direct federal spending to support ailing industries, the HITS Act simply speeds up music creators’ ability to deduct the first $150,000 of sound recording production costs from their taxable income. "Because of advances in technology, many artists record and even release their own music today, and the benefit would extend not only to businesses but also to individuals," explained A2IM.

  "Musicians generally manage to cobble together a livable income only by combining live performances with the release of recorded music,” said Burgess. "With half of their income stream dormant for the foreseeable future, and elected officials frequently pointing to the power of music as a positive force to uplift people in tough times, we sincerely hope that we won’t get left behind."