HITS Act Helps Songwriters

Recently as part of a larger tax bill, the United States passed a law called the "HITS Act" (Help Independent Tracks Succeed) that might spell relief for songwriters ready to record some original tunes.

Under the HITS Act that is part of OBBBA (One Big Beautiful Bill Act), producers and artists can deduct up to $150,000 in the same year from taxes when they invest in a qualified sound recording.

The requirement for a "qualified sound recording" means they are made in the United States.

If you've been holding off on investing in your demos or original song masters, recording a cover song album, or just getting a couple singles out to streaming, now might be the time to make your plans.

Most songwriters spend far less than $150K on their recording projects, but realistically, that is a good budget for a label to spend on their album product.

When you add up your studio, musicians, engineers, producers, singers and other support staff, plus all the time and expertise that goes into setting up a successful recording session, you're looking at needing a significant budget for your production costs, especially if you plan to do it right.

What does the HITS Act mean for songwriters?

Right now it means that people who have been considering investing in making music in the recording studio have a better reason and incentive to do it.

It also means that there is more investment money flowing into the music industry as a whole, because now a different class of investor is entering the scene with an eye on the bottom line.

Whether you're looking for a strong ROI (return on investment) or to spend some of the money you earned from a different business, the HITS Act might open up a new avenue for your creative pursuits.

Read the full text of the Act here, especially noting Sec. 70434 for info specific to the sound recording productions.

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