Sometimes you just need a win. It doesn’t even have to be major, but at least some tangible win to keep you believing — a little victory to give you hope. As Congress remains gridlocked, social, economic and political issues have reached a breaking point in our society. In the midst of it all, those of us who create music are overstressed as we try to navigate this pandemic economy and pursue our craft in a sustainable way. One way Washington can help is by passing the Help Independent Tracks Succeed (HITS) Act.
The HITS Act, which has drawn bipartisan support, is the victory the music industry needs. This bill would help restart the music industry by allowing independent artists to write off 100% of their recording studio expenses (up to $150,000) on their taxes in the year the expenses are incurred.
Why is this important? The majority of music creators earn around 75% of their income through live shows and events, which are largely on hold due to the pandemic. This bill provides financial support for musicians to stay in the studio now and create music for their next album and their next tour.
Recording an album involves a whole host of expenses, including studio equipment, rental fees, staff costs, studio musicians and much more — costs that could easily run into the tens of thousands of dollars. Under current law, music creators can write off these expenses, but it must be done in a gradual manner — usually over a 2-3 year period.
Under the HITS Act, however, artists would be allowed to write off all of these expenses in the same year they’re incurred, which is especially important in a year where most musicians aren’t making much, if anything. Passing the HITS Act would provide a major way for the thousands of independent musicians who live in Texas to offset the economic loss that came with the abrupt end of touring this year.
Specifically, this bill incentivizes cash flow to studios, many of which are sitting empty because artists are hesitant to spend the money. It also provides financial relief to studio musicians and session players who rely on studio gigs to pay their bills.
In my case, I’m scheduled to record a new project album at Matchbox Studios in Austin. Studio costs will run $40,000, with another $10,000 on musicians. Being able to write off those expenses in full this year would save me thousands of dollars in taxes — freeing up money that could go toward a local studio and into the pockets of touring musicians who aren’t touring. This is one small example of how the HITS Act will benefit musicians and the local economy.
It also benefits music lovers by supporting the creation of new songs, creating an avenue of escape that music so often provides. With so many artists and songwriters off the road, we could see an incredible amount of inspiring music moving into 2021 because artists will have the resources to create those albums.
This has been a difficult year for all of us, but it has been especially crippling to the financial well-being of musicians. In a world where few people purchase music, an artist’s primary source of income is from touring, and touring is generally sparked by new albums. Encouraging and incentivizing artists to create more music will result in a renewed enthusiasm to tour again when the smoke clears.
I want to thank U.S. Rep. Jodey Arrington, R-Lubbock; U.S. Rep. Sheila Jackson Lee, D-Houston; and U.S. Rep. Michael McCaul, R-Austin for signing onto this bill. I urge all Texans to contact their congressional representative and ask them to support the HITS Act, too. Let’s hope Congress can give us a little victory.
Abbott is the founder of the Josh Abbott Band, which is releasing its next album, The Highway Kind, on Nov. 13. He lives in Austin. He originally penned this op-ed about the HITS Act for the Austin American Statesman. Opinion: Let’s make sure the HITS keep on coming