HITS Act Passes Congress in Tax Bill Awaiting Presidential Signature
Legislation allows musicians to deduct recording expenses in year incurred
The Help Independent Tracks Succeed (HITS) Act has passed Congress as part of a larger tax and spending legislation package on July 3, 2025. The bipartisan measure allows musicians to deduct 100% of their production expenses, up to $150,000, in the year they are incurred rather than amortizing them over several years. The legislation now awaits President Trump's signature to become law after being included in the comprehensive tax bill.
The HITS Act was initially introduced in July 2020 during the COVID-19 pandemic when many musicians faced financial hardships due to widespread shutdowns. Representatives Linda T. Sánchez (D-Calif.) and Ron Estes (R-Kansas) co-sponsored the House version, while Senators Dianne Feinstein (D-Calif.) and Marsha Blackburn (R-Tenn.) introduced a companion bill in the Senate. The legislation was reintroduced in January 2025 after being excluded from several previous legislative packages.
KEY POINTS
- •HITS Act passes in tax legislation
- •Musicians can deduct recording costs
- •Bipartisan bill awaits Trump signature
Recording Academy CEO Harvey Mason jr. expressed appreciation for the bill's passage, acknowledging the bipartisan support that helped advance the legislation. Mason also noted the removal of a provision that would have restricted state-level AI protections for a decade, describing this modification as beneficial for the creative community. The Recording Academy has been a consistent advocate for the HITS Act throughout its legislative journey.
Under current tax regulations, producers and artists must spread production expense deductions over the economic life of a recording, typically three to four years. The HITS Act changes this requirement, providing immediate financial benefits to music creators by allowing full deduction in the first year. While initially conceived as pandemic relief, the tax provision is designed as a permanent change that will continue to benefit artists beyond the current economic conditions.
When first introduced, Recording Academy representatives indicated the legislation was intended to incentivize music production during a challenging period while providing financial benefits to creators. The permanent nature of the tax provision means it will continue to offer advantages to the music industry in future years, potentially stimulating continued creative output and economic activity in the sector.