The HITS Act

The Help Independent Tracks Succeed (HITS) Act (H.R. 761) is a federal tax law that lets independent musicians, producers, and labels deduct up to $150,000 in qualified recording production expenses in the same year they're incurred — rather than spreading them out over years.

Previously, music creators had to capitalize and amortize production costs over the life of a recording. That meant waiting years to see financial relief. The HITS Act changes that entirely — now music is treated like film, TV, and theater, where you can write off costs immediately.

⚠️ One catch: The recording must be produced and recorded in the United States.

Here's what qualifies under the HITS Act:

✗ Marketing, touring, and distribution costs are not covered under this deduction.

If you're financing recording projects, the HITS Act creates a tax-efficient structure similar to film investment. You can deploy capital into U.S.-based recordings and write off up to $150,000 of production costs in year one — making music a newly attractive asset class for high-income investors looking for creative tax shelters.

Combined with existing music royalty and catalog investment strategies, this opens a real conversation about music as infrastructure — not just entertainment.

"This shift recognizes independent music creators as entrepreneurs and small business owners, deserving of the same support as other creative professionals."

The final version of the HITS Act also included a critical win for artists beyond the tax break: it blocked a proposed federal ban on state-level AI regulation. This preserves each state's ability to protect artists from unauthorized AI use of their voice, likeness, or creative work.

In a moment where AI cloning of artists is a growing threat, this provision matters — a lot.