HITS Act, Legislation That Gives Music Creators a Tax Break, Passes Congress as Part of Trump’s Megabill

The Help Independent Tracks Succeed (HITS) Act, the long-in-the-works legislation that would allow musicians to deduct 100% of their production expenses in the year they’re incurred, passed in Congress as part of President Trump’s tax and spending cuts bill on Thursday (July 3). The milestone was quickly celebrated by Harvey Mason jr., CEO of the Recording Academy, which has long lobbied for the bill to become law.

Co-sponsored by Rep. Linda T. Sánchez (D-Calif.) and Rep. Ron Estes (R-Kansas), the HITS Act was first introduced in July 2020 at the height of the COVID-19 pandemic, when many musicians struggled due to widespread shutdowns in the U.S. A companion bill was introduced in the Senate in December of that year by Sens. Dianne Feinstein (D-Calif.) and Marsha Blackburn (R–Tenn.). It was reintroduced in the Senate in January after being dropped from several previous legislative packages and subsequently added to the Trump-endorsed One Big Beautiful Bill Act, which now requires only the president’s signature to become law.

“The Recording Academy is proud to have partnered with Reps. Estes and Sánchez and Senators Blackburn and Cortez Masto over many years to bring the HITS Act to life, and we are deeply grateful for their unwavering support,” said Mason in a statement.

The Recording Academy CEO also praised the removal of another component of the Republican-led bill: a clause that would have banned state-level AI protections for 10 years.

“As the industry navigates rapid technological advancements and an evolving musical landscape, this moment represents meaningful progress toward protecting creators and sustaining a vibrant music ecosystem,” Mason continued. He added: “We also thank Senators Blackburn and Cantwell for their thoughtful leadership in removing the AI provision that could have posed serious risks to the creative community. This is a powerful win for those who make music, and for the future of music itself.”

The HITS Act, which requires a change in the tax code, allows musicians to fully expense the costs of new studio recordings up to $150,000 in the year they were produced, with the goal of easing the financial burden on creators. The current tax code requires producers and artists to amortize production expenses for tax purposes over the economic life of a recording, which typically ranges from three to four years.

“We wanted to incentivize musicians to get back in the studio and put more music out into the world when we need it right now and give them an immediate financial benefit by having this deduction in the first year,” The Recording Academy’s then-chief advocacy officer Daryl Friedman told Billboard when the bill was first introduced in the House of Representatives. “But this will be an ongoing tax provision that will live beyond the pandemic and will be a benefit to artists for years to come.”