A new tax break is set to become law after it was first introduced in 2020. What is the HITS act, and how will it impact musicians and the music industry as a whole? Keep reading to find out more.
The “Help Independent Tracks Succeed” (HITS) Act will give independent artists and labels the ability to deduct up to $150,000 in recording expenses, effective immediately.
Until now, this kind of deduction was mainly reserved for the film and television industries, and even then, the costs had to be spread over multiple years. The HITS Act updates that framework for music, giving independent creators the chance to write off production expenses in the year they’re logged. Not to mention, this follows the other multiple attempts to bring similar bills to law and the CARES Act that passed in 2020 as a result of the pandemic.
The music industry is taking note. This bill has even been given praise by many, including Recording Academy CEO, who stated that the bill will bring much needed support to independent artists and songwriters.
As the industry navigates an evolving musical landscape, this moment represents meaningful progress toward protecting creators and sustaining a vibrant music ecosystem.
~ Harvey Mason Jr. | Recording Academy CEO
Want to know more about how this bill came to be, and what it could mean for your next release? Read more about what the Recording Academy has to say about the HITS Act here.
Why do musicians need the HITS Act, you ask? Well, life changed for everyone when COVID-19 tore its way through the world as we knew it. Musicians and creatives were some of those who were hit the hardest, as tours were canceled, and studio sessions were indefinitely postponed. Many had to adapt to the quick shift in their environment, such as through livestreaming or building their online presence with their fans.
The previously mentioned CARES Act was vital to the survival of the music industry. Now that the pandemic is over, many are still recovering what they lost, especially those who are not backed by labels. The HITS Act not only continues the aid, but supports musicians who are craving to create new music and work hard to make it happen.
Stay tuned for more updates! Here’s to more new music and the resources to make it all happen.
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