HITS Act

II 118TH CONGRESS 1ST SESSION S. 1625 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. IN THE SENATE OF THE UNITED STATES MAY 16, 2023 Mrs. FEINSTEIN (for herself and Mrs. BLACKBURN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide for an election to expense certain qualified sound record- ing costs otherwise chargeable to capital account. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Help Independent 4 Tracks Succeed Act’’ or the ‘‘HITS Act’’. 5 SEC. 2. TREATMENT OF CERTAIN QUALIFIED SOUND RE- 6 CORDING PRODUCTIONS. 7 (a) ELECTION TO TREAT COSTS AS EXPENSES.— 8 Section 181(a)(1) of the Internal Revenue Code of 1986 9 VerDate Sep 11 2014 23:20 May 25, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1625.IS S1625 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 1625 IS is amended by striking ‘‘qualified film or television produc- 1 tion, and any qualified live theatrical production,’’ and in- 2 serting ‘‘qualified film or television production, any quali- 3 fied live theatrical production, and any qualified sound re- 4 cording production’’. 5 (b) DOLLAR LIMITATION.—Section 181(a)(2) of such 6 Code is amended by adding at the end the following new 7 paragraph: 8 ‘‘(C) QUALIFIED SOUND RECORDING PRO- 9 DUCTION.—Paragraph (1) shall not apply to so 10 much of the aggregate cost of any qualified 11 sound recording production, or to so much of 12 the aggregate, cumulative cost of all such quali- 13 fied sound recording productions in the taxable 14 year, as exceeds $150,000.’’. 15 (c) NO OTHER DEDUCTION OR AMORTIZATION DE- 16 DUCTION ALLOWABLE.—Section 181(b) of such Code is 17 amended by striking ‘‘qualified film or television produc- 18 tion or any qualified live theatrical production’’ and insert- 19 ing ‘‘qualified film or television production, any qualified 20 live theatrical production, or any qualified sound recording 21 production’’. 22 (d) ELECTION.—Section 181(c)(1) of such Code is 23 amended by striking ‘‘qualified film or television produc- 24 tion or any qualified live theatrical production’’ and insert- 25 VerDate Sep 11 2014 23:20 May 25, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1625.IS S1625 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 1625 IS ing ‘‘qualified film or television production, any qualified 1 live theatrical production, or any qualified sound recording 2 production’’. 3 (e) QUALIFIED SOUND RECORDING PRODUCTION 4 DEFINED.—Section 181 of such Code is amended by re- 5 designating subsections (f) and (g) as subsections (g) and 6 (h), respectively, and by inserting after subsection (e) the 7 following new subsection: 8 ‘‘(f) QUALIFIED SOUND RECORDING PRODUCTION.— 9 For purposes of this section, the term ‘qualified sound re- 10 cording production’ means a sound recording (as defined 11 in section 101 of title 17, United States Code) produced 12 and recorded in the United States.’’. 13 (f) BONUS DEPRECIATION.— 14 (1) QUALIFIED SOUND RECORDING PRODUC- 15 TION AS QUALIFIED PROPERTY.—Section 16 168(k)(2)(A)(i) of such Code is amended— 17 (A) by striking ‘‘or’’ at the end of sub- 18 clause (IV), by adding ‘‘or’’ at the end of sub- 19 clause (V), and by inserting after subclause (V) 20 the following: 21 ‘‘(VI) which is a qualified sound 22 recording production (as defined in 23 subsection (f) of section 181) for 24 which a deduction would have been al- 25 VerDate Sep 11 2014 23:20 May 25, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1625.IS S1625 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 1625 IS lowable under section 181 without re- 1 gard to subsections (a)(2) and (h) of 2 such section or this subsection,’’; and 3 (B) in subclauses (IV) and (V) (as amend- 4 ed) by striking ‘‘without regard to subsections 5 (a)(2) and (g)’’ both places it appears and in- 6 serting ‘‘without regard to subsections (a)(2) 7 and (h)’’. 8 (2) PRODUCTION PLACED IN SERVICE.—Section 9 168(k)(2)(H) of such Code is amended by striking 10 ‘‘and’’ at the end of clause (i), by striking the period 11 at the end of clause (ii) and inserting ‘‘, and’’, and 12 by adding after clause (ii) the following: 13 ‘‘(iii) a qualified sound recording pro- 14 duction shall be considered to be placed in 15 service at the time of initial release or 16 broadcast.’’. 17 (g) CONFORMING AMENDMENTS.— 18 (1) The heading for section 181 of such Code 19 is amended to read as follows: ‘‘TREATMENT OF 20 CERTAIN QUALIFIED PRODUCTIONS.’’. 21 (2) The table of sections for part VI of sub- 22 chapter B of chapter 1 of such Code is amended by 23 striking the item relating to section 181 and insert- 24 ing the following new item: 25 ‘‘Sec. 181. Treatment of certain qualified productions.’’. VerDate Sep 11 2014 23:20 May 25, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6211 E:\BILLS\S1625.IS S1625 pbinns on DSKJLVW7X2PROD with $$_JOB 5 •S 1625 IS (h) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to productions commencing in tax- 2 able years ending after the date of the enactment of this 3 Act. 4 Æ VerDate Sep 11 2014 23:20 May 25, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S1625.IS S1625 pbinns on DSKJLVW7X2PROD with $$_JOB