After Five Years, a New Law Gives Independent Musicians More Financial Freedom to Create (Guest Column)

More music is being created right now than at any other time in history, and most of it is coming from independent music makers. According to the most recent data from Luminate, about 99,000 tracks a day were delivered to the digital streaming platforms (DSPs) in 2024, with 91.8% of those tracks coming outside of the major labels or distribution systems. 

Yet, even as uploading music to streaming platforms has reduced old barriers to entry, many obstacles still exist for someone trying to earn a living as a full-time music creator. The production cost of a full album averages almost $33,000, according to a July 2025 survey of A2IM label members. And with an industry that’s experienced immense changes in recent years – from the COVID-19 pandemic shutting down studios and live venues to diminished streaming revenues for artists – it’s harder than ever for independent music people to take on the financial burden of their creativity. 

We saw an important shift in this paradigm this past July, when the HITS (Help Independent Tracks Succeed) Act was finally passed into law. It took five long years of advocacy by the Recording Academy, the American Association of Independent Music (A2IM), and organizations and creators across the industry. 

At its core, the HITS Act is about fairness, as it ensures music production expenses are given equal treatment in the federal tax code as those in film and TV. In practice, the HITS Act allows individual recording artists, songwriters and record producers to deduct the full cost of sound recording and production expenses, up to $150,000, in the year they are incurred. For independent musicians, who generate an average of 65 tracks a year – with a single track averaging almost $3,100 in production costs, according to the July A2IM survey – the HITS Act is a much-needed safety net that will help them further their artistry without compromising their financial well-being. 

A Partnership of Advocacy 

Like many of the songs and albums we love, the passage of the HITS Act represents a successful collaboration – in this case, one between two music associations dedicated to finding solutions that will bolster independent artists and record producers. 

In 2020, the Academy worked directly with Representatives Linda Sánchez (D-CA) and Ron Estes (R-KS) to develop a bill that would address the economic impacts of the COVID-19 pandemic on the music community and incentivize artists to get back in the studio to create new music. The shuttering of live music venues led to significant loss of income for independent creators, and small labels were threatened by the high upfront production costs. The HITS Act was created to minimize those risks and ensure artists could continue developing their careers in the midst of a global shutdown. 

Our success was in great part due to the diligence and strength of the people the Recording Academy and A2IM represent, who immediately got to work engaging with elected officials across the country. More than 600 independent labels nationwide in A2IM’s network, along with thousands of Recording Academy members, spoke with lawmakers on the importance of the HITS Act and encouraged them to move the bill forward. 

The road from bill to law wasn’t easy. It took over five years for the HITS Act to finally pass. But in that time, the importance of this legislation became even more apparent, especially in our changing music industry. While it began as a COVID recovery bill, the HITS Act represents a broader legislative lifeline that will help ensure independent creativity can survive and thrive. 

The Future Looks Brighter 

As we celebrate the passage of the HITS Act, our eyes look ahead to what’s next: the impacts that this new law will have on independent music creators. It may help a singer-songwriter who has filled dozens of notebooks with their songs to finally develop the album they’ve dreamed of making, or support an independent record producer as they explore new genres and sounds. 

Of course, all of this comes with a question: “How does it work?” 

If an independent creator is interested in utilizing the HITS Act tax deduction, they should make sure to keep track of their production expenses. Having documentation such as receipts, invoices and contracts helps support claims when filing, and consulting with a tax professional ensures expenses are accurately reported and deductions are fully optimized. It’s an exciting time for our community, and we’re excited to see how the enhanced financial flexibility the HITS Act offers will bolster artists’ creativity in the coming years. 

The HITS Act’s journey to law, and the collaboration of A2IM and the Recording Academy throughout the past five years to make it possible, represents the heart of our collective mission to support the longevity of our industry and the well-being of music people. It’s also a valuable reminder that when we work together, we can generate meaningful change that moves our communities forward. 
  
As CEO of the Recording Academy and MusiCares since 2021, Harvey Mason jr. is redefining what it means to champion music creators, ensuring their voices are heard, their rights protected, and their artistry celebrated. During his tenure, Mason has spearheaded transformative initiatives including the Songwriters & Composers Wing and the DREAM Initiative, strengthened advocacy efforts in Washington, D.C., and played a pivotal role in raising and distributing over $40 million in COVID-19 relief and $25 million for fire relief efforts. A multi-GRAMMY and Emmy nominated songwriter and producer, Mason has crafted iconic hits for both legends and today’s biggest stars, from Whitney Houston and Elton John to Beyoncé and Justin Bieber.  
  
President and CEO for the American Association of Independent Music (A2IM) for the past 10 years, Dr. Richard James Burgess MBE has produced, recorded, and performed on many gold, platinum, and multi-platinum albums. Burgess has been listed multiple times as a Power Player and an Independent Power Player by Billboard and has received awards from Music Week, the British Arts Council, the Greater London Arts Association, the Park Lane Group, and the British Council for Education. He was awarded an MBE (Member of the Order of the British Empire) in the Queen’s New Year’s Honors list 2022.