Songwriters Seek Relief
Congress is preparing to pass legislation that would give a tax break to songwriters, reversing a vintage tax law that has pained them for decades.
Lawmakers have added a provision in pending tax legislation that would turn song revenue into capital gains rather than income, according to The Wall Street Journal. It would apply to song catalog sales and not to ordinary royalty income.
Congress has been lobbied by the country music industry, including the Nashville Songwriters Association International, to change the tax code.
“This is just such a glaring injustice,” NSAI Executive Director Bart Herbison told the WSJ.
Average songwriter income is apparently just $4,700 annually.
The 1950s tax provision requires makers of creative works to pay regular income taxes on sales of their work, the paper said. Because most songwriters are self-employed, they fall into a 35 percent tax bracket versus 15 percent for capital gains.
Songwriters are also vulnerable to large tax hits because they are paid royalties immediately after they are collected, unlike other creative types who can spread their payments, and thus their taxes, over the span of years, according to the WSJ.
Reba McEntire hitmaker Liz Hengber told the paper she sold her catalog of 200 songs for somewhere in the mid-six figures about five years ago and had to pay more than $100,000 in taxes.
“It sounds like a lot of money, but I haven’t had a hit since 2000 so that money has to last me,” Hengber said.
The tax change is one of many included in the $70 billion, five-year tax bill currently before Congress, the paper said.