US music sector welcomes the introduction of the HITS Act

By Emmanuel Legrand

The US music sector has applauded the introduction of the bipartisan legislation Help Independent Tracks Succeed Act (HITS Act) by Representatives Linda Sánchez (D-CA) and Ron Estes (R-KS) and Senators Dianne Feinstein (D-CA) and Marsha Blackburn (R-TN). The bill would allow musicians, technicians, and producers to deduct 100% of recording production expenses in the year they are incurred, rather than in later years.

  This provision was already in place in the federal tax code already for film, television and theater productions, for which production expenses can be deducted in the year they are incurred, but it did not nclude music production expenses. The bill would allow up to $150,000 in recording production expenses to be deducted in the year they are incurred.

  "Implementing this change would help these entertainment professionals recover from the economic downturn brought on by the COVID-19 pandemic," said a coalition of music industry organisations in a joint statement. 

Making things easier

  Congresswoman Sánchez said: “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 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," added Congressman Estes.

  The HITS Act is supported by the Recording Academy, American Association of Independent Music (A2IM), SAG-AFTRA, Music Artists Coalition, Artists Rights Alliance, Recording Industry Association of America (RIAA), National Music Publishers Association (NMPA), SoundExchange, Global Music Rights, SESAC, National Independent Venue Association (NIVA), Future of Music Coalition, Digital Media Association (DiMA), Nashville Songwriters Association International (NSAI), ASCAP, BMI, and Songwriters of North America (SONA), among others. 

Incentivise jobs creation

  For A2IM President and CEO Richard James Burgess, 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 incentivising 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."

  Added 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 incentivising music production, creating new opportunities and revitalising the music economy." 

 

> California reps introduce the FAIR Act

 
California State Assemblywoman Lorena Gonzalez has introduced the Free Artists from Industry Restrictions (FAIR) Act, which would cap recording contracts for California-based artists or California-based music companies at seven years.

  Since 1931, California has limited the duration of personal service contracts to seven years, but standard contracts in the music industry do not present time limits and are usually defined by the number of albums artists are owed to labels. 

  “No worker should ever be bound to an unreasonable contract that holds them back from making decisions about their own livelihood," said Assemblywoman Gonzalez.

  The bill is supported by music advocacy groups such as the Music Artists Coalition, the Black Music Action Coalition, Songwriters of North America (SONA), and entertainment union SAG-AFTRA.

  Irving Azoff, founder of the Music Artists Coalition, commented: “It is unfair that the only Californians excluded from the protection of the Seven Year Statute are recording artists. We ask our record label partners and members of the California legislature to join us and support this important initiative. We must protect artists and modernise this archaic law.”