January 28, 2025
Mr. Estes (for himself and Ms. Sánchez) introduced the following bill; which was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to provide for an election to expense certain qualified sound recording costs otherwise chargeable to capital account.
Section 1. Short title
This Act may be cited as the Help Independent Tracks Succeed Act
or the HITS Act
.
Sec. 2. Treatment of certain qualified sound recording productions
(a) Election To treat costs as expenses
Section 181(a)(1) of the Internal Revenue Code of 1986 is amended by striking qualified film or television production, and any qualified live theatrical production,
and inserting qualified film or television production, any qualified live theatrical production, and any qualified sound recording production
.
(b) Dollar limitation
Section 181(a)(2) of such Code is amended by adding at the end the following new paragraph:
(C) Qualified sound recording production
Paragraph (1) shall not apply to so much of the aggregate cost of any qualified sound recording production, or to so much of the aggregate, cumulative cost of all such qualified sound recording productions in the taxable year, as exceeds $150,000.
(c) No other deduction or amortization deduction allowable
Section 181(b) of such Code is amended by striking qualified film or television production or any qualified live theatrical production
and inserting qualified film or television production, any qualified live theatrical production, or any qualified sound recording production
.
(d) Election
Section 181(c)(1) of such Code is amended by striking qualified film or television production or any qualified live theatrical production
and inserting qualified film or television production, any qualified live theatrical production, or any qualified sound recording production
.
(e) Qualified sound recording production defined
Section 181 of such Code is amended by redesignating subsections (f) and (g) as subsections (g) and (h), respectively, and by inserting after subsection (e) the following new subsection:
(f) Qualified sound recording production
For purposes of this section, the term qualified sound recording production means a sound recording (as defined in section 101 of title 17, United States Code) produced and recorded in the United States.
(f) Bonus depreciation
(1) Qualified sound recording production as qualified property
Section 168(k)(2)(A)(i) of such Code is amended—
(A)
by striking or
at the end of subclause (IV), by adding or
at the end of subclause (V), and by inserting after subclause (V) the following:
(VI)
which is a qualified sound recording production (as defined in subsection (f) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection,; and
(B)
in subclauses (IV) and (V) (as amended) by striking without regard to subsections (a)(2) and (g)
both places it appears and inserting without regard to subsections (a)(2) and (h)
.
(2) Production placed in service
Section 168(k)(2)(H) of such Code is amended by striking and
at the end of clause (i), by striking the period at the end of clause (ii) and inserting , and
, and by adding after clause (ii) the following:
(iii)
a qualified sound recording production shall be considered to be placed in service at the time of initial release or broadcast.
(g) Conforming amendments
(1)
The heading for section 181 of such Code is amended to read as follows: Treatment of certain qualified productions.
.
(2)
The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 181 and inserting the following new item:
(h) Effective date
The amendments made by this section shall apply to productions commencing in taxable years ending after the date of the enactment of this Act.