The Assist Impartial Tracks Succeed (HITS) Act, the long-in-the-works laws that may enable musicians to deduct 100% of their manufacturing bills within the 12 months they’re incurred, handed in Congress as a part of President Trump’s tax and spending cuts invoice on Thursday (July 3). The milestone was shortly celebrated by Harvey Mason jr., CEO of the Recording Academy, which has lengthy lobbied for the invoice to develop into legislation.
Co-sponsored by Rep. Linda T. Sánchez (D-Calif.) and Rep. Ron Estes (R-Kansas), the HITS Act was first launched in July 2020 on the top of the COVID-19 pandemic, when many musicians struggled as a result of widespread shutdowns within the U.S. A companion invoice was launched within the Senate in December of that 12 months by Sens. Dianne Feinstein (D-Calif.) and Marsha Blackburn (R–Tenn.). It was reintroduced within the Senate in January after being dropped from a number of earlier legislative packages and subsequently added to the Trump-endorsed One Huge Stunning Invoice Act, which now requires solely the president’s signature to develop into legislation.
“The Recording Academy is proud to have partnered with Reps. Estes and Sánchez and Senators Blackburn and Cortez Masto over a few years to carry the HITS Act to life, and we’re deeply grateful for his or her unwavering help,” stated Mason in a press release.
The Recording Academy CEO additionally praised the elimination of one other part of the Republican-led invoice: a clause that may have banned state-level AI protections for 10 years.
“Because the business navigates fast technological developments and an evolving musical panorama, this second represents significant progress towards defending creators and sustaining a vibrant music ecosystem,” Mason continued. He added: “We additionally thank Senators Blackburn and Cantwell for his or her considerate management in eradicating the AI provision that might have posed critical dangers to the inventive neighborhood. It is a highly effective win for many who make music, and for the way forward for music itself.”
The HITS Act, which requires a change within the tax code, permits musicians to completely expense the prices of latest studio recordings as much as $150,000 within the 12 months they have been produced, with the aim of easing the monetary burden on creators. The present tax code requires producers and artists to amortize manufacturing bills for tax functions over the financial lifetime of a recording, which generally ranges from three to 4 years.
“We wished to incentivize musicians to get again within the studio and put extra music out into the world after we want it proper now and provides them an instantaneous monetary profit by having this deduction within the first 12 months,” The Recording Academy’s then-chief advocacy officer Daryl Friedman told Billboard when the invoice was first launched within the Home of Representatives. “However this can be an ongoing tax provision that may dwell past the pandemic and can be a profit to artists for years to come back.”