
U.S. Capitol
Photo: SAUL LOEB/AFP via Getty Images
House Passes Build Back Better Act With The HITS Act Included
After months of deliberations and negotiations, House Democrats passed the Build Back Better Act—a $1.7 trillion package of economic, environmental, and social programs—by a vote of 220-213 on Friday, November 19. And that’s good news for music creators and fans across the United States.
Included amidst the hundreds of programs and priorities is the Help Independent Tracks Succeed (HITS) Act, a bill the Recording Academy helped craft to aid and support artists and producers struggling with the ongoing economic fallout of the COVID-19 pandemic. First introduced in 2020 by Reps. Linda Sanchez (D-Calif.) and Ron Estes (R-Kansas) and Senators Diane Feinstein (D-Calif.) and Marsha Blackburn (R-Tenn.), the HITS Act amends the U.S. tax code to incentivize the production of new sound recordings. In addition to the Recording Academy, the bill has been endorsed by dozens of music stakeholder groups, including the American Association of Independent Music (A2IM).
Passage of the HITS Act is no small feat and relied on intensive advocacy efforts and initiatives orchestrated by the Recording Academy and its members. Most recently, the HITS Act was a top priority during the Academy’s Behind the Record Advocacy day. Upon the House vote, Recording Academy CEO Harvey Mason jr., stated:
“The passage of the Build Back Better Act in the House, inclusive of the HITS Act, is an important step forward for music creators eager to create new recordings and revitalize the music economy following more than a year and a half of uncertainty. We truly thank all who supported this meaningful provision in the House, and we now urge the Senate to act quickly to ensure that the HITS Act becomes law."
The HITS Act allows artists and record producers to deduct 100 percent of sound recording production expenses—up to $150,000—in the year they are incurred, rather than amortized over the life of the recording, typically 3-4 years. The bill also aligns the tax code for music production with similar provisions for other creative industries. Currently, qualified film, live theatrical, and television production companies enjoy the ability to deduct 100 percent of their production expenses in the year such expenses are incurred.
As part of the Build Back Better Act, the HITS Act now heads to the Senate for consideration under the Upper Chamber’s reconciliation rules—meaning it only needs a simple majority of 50 votes to reach the president’s desk. Senate leadership is optimistic it can secure the needed votes in the coming weeks, although a firm timeline has yet to be established.
But with House passage out of the way, the HITS Act is a step closer to bringing much needed relief to American artists and producers.