Legal Analysis

Policy Spotlight: The HITS Act Is Now Law—What It Means for Independent Artists

Written By: Ashton B. Monteiro, Esq.

We’re thrilled to share major news from Washington: the Help Independent Tracks Succeed (HITS) Act has officially been signed into law, delivering historic federal tax relief for independent music creators. (Finally!)

What Is the HITS Act?

The HITS Act allows independent artists, songwriters, producers, composers, and engineers to fully expense up to $150,000 in qualifying sound recording costs—like studio time, mixing, mastering, session musicians, and engineering—in the same tax year those costs are incurred, instead of amortizing them over several years. This aligns music with other creative sectors like film, television, and theatre, which already enjoy such tax incentives.

After years of advocacy—beginning with its introduction in 2020 and reintroductions in recent sessions—the HITS Act was signed into law on July 4, 2025, as part of a consolidated domestic policy package.

Why It Matters

For independent artists, this is transformative—especially for those who self-finance recording projects or operate on tight margins. Immediate deductions mean improved cash flow, helping creators reinvest more quickly into their craft, pay collaborators, and fund promotion or touring.

It’s a clear signal that lawmakers now recognize independent creators as small businesses that deserve equitable financial support.

How Independent Artists Can Take Advantage

Track Eligible Expenses Carefully
Maintain detailed receipts and records for studio rentals, producer or session musician fees, mixing and mastering costs, and equipment rentals—these can now qualify for deduction.
Work with a Tax Expert
Consult an accountant familiar with entertainment tax law to ensure proper filing. Not all costs may qualify, and IRS regulations should be navigated correctly.
Plan Projects Strategically
Consider timing your production so that eligible projects occur within the same tax year—especially if your expenses might approach the $150K limit.
Use the Savings to Reinvest
Freed-up funds can be spent on marketing, touring, merchandise, or additional recording—amplifying your creative output and reach.

Room for Improvement

While the HITS Act is a huge win, there are opportunities to expand its impact:

Increase the deduction cap—especially for independent labels or collectives investing heavily in production.
Clarify eligible expense categories, ensuring that modern costs (like remote collaboration, digital producer tools, or marketing tied to production) are included.
Provide education and outreach to ensure that grassroots artists and DIY creators know how to claim the benefit.

Takeaway

The HITS Act is more than a tax law—it’s a vote of confidence in independent creativity. By bringing the music industry in line with film and TV, it levels the playing field and gives indie creators a meaningful financial boost in 2025 and beyond.

Written By: Ashton B. Monteiro, Esq.

Litigation Tracker: Where Things Stand in the Drake v. UMG Lawsuit

Written By: Ashton B. Monteiro, Esq.

Drake's federal lawsuit against Universal Music Group—filed in January 2025—is now firmly in the discovery phase, and recent developments are offering important insights into how this defamation case might unfold.

Drake initially filed a pre‑action petition in late 2024, accusing UMG and Spotify of artificially inflating streams for Kendrick Lamar’s diss track "Not Like Us" through bots and payola schemes. That was withdrawn in January—but Drake escalated the matter by suing UMG directly for defamation, alleging the label promoted a track that included false and damaging claims about him. Lamar himself is not named as a defendant.

UMG responded by filing motions to dismiss, defending both the release of the track and the diss genre as protected artistic expression.

Key Discovery Wins for Drake

Subpoena Authorized for Key Witness
A New York judge has granted Drake’s team permission to serve a subpoena on Kojo Menne Asamoah—a witness believed to be central to UMG’s promotional decisions for the track. Despite multiple failed attempts to locate him, the court has granted "alternative service" (e.g., certified mail, email).
Access to Contractual and Executive Records
Drake has been granted access to previously sealed documents, including Kendrick Lamar’s contract with Interscope, as well as internal UMG salary and incentive documents dating back to 2020. These documents could be pivotal to establishing how and why “Not Like Us” was promoted—and who internally approved it.

UMG has formally denied that CEO Sir Lucian Grainge had any role in approving or promoting the diss track. In court filings, the company characterized Drake’s scope of discovery as an overreach intended to harass rather than seek justice. The label has also moved to dismiss the case entirely.

This case transcends a normal defamation claim and is shaping how music labels may be held accountable for the content that they release. Drake argues that UMG not only allowed, but amplified, defamatory messaging for commercial gain. UMG counters that Drake is misusing the legal system to renegotiate influence by weaponizing discovery.

What’s Next?

With discovery underway and UMG’s dismissal bids pending, a significant ruling could come later this year, or the case could extend with formal proceedings. From a cultural perspective, this is a fascinating collision of music, reputation, and legal norms: can diss track lyricism be treated as factual defamation? How will courts balance creative expression with personal harm? Either way, it underscores the importance of legal literacy and proactive rights management for artists. We will continue to follow this one closely and report on any resulting court holdings.

Written By: Ashton B. Monteiro, Esq.

No Fakes, Real Stakes: How New AI Laws Could Shape Artist Rights

Written By: Ashton B. Monteiro, Esq.

As generative AI accelerates, protecting artist identity—voice, likeness, and image—has become essential. The recently reintroduced Nurture Originals, Foster Art, and Keep Entertainment Safe Act of 2025 ("NO FAKES Act") marks a landmark effort to safeguard those rights at the federal level.

Sponsored by Rep. Maria Salazar (R‑FL) and backed by Senators Coons, Blackburn, Klobuchar, and Tillis, H.R. 2794 was introduced on April 9, 2025 and has been referred to the House Judiciary Committee. Built on a previous 2024 version, this legislation seeks to create a federal right of publicity, specifically covering digital replicas or “deepfakes” of individuals’ voices and visual appearance (likeness) by giving creators legal recourse against unauthorized AI-generated depictions.

Legislative Status

Introduced in April 2025 (H.R. 2794) and currently before the House Judiciary Committee.
A Senate version (S. 1367) was also reintroduced in the spring, signaling bipartisan urgency.
A Senate Judiciary Subcommittee hearing on May 21, 2025, featured testimony from music and tech industry leaders including Martina McBride, YouTube, and the RIAA, highlighting the need for protections against AI misuse.

Key Provisions

New Federal Right of Publicity: For the first time, creators will have a national legal standard to stop unauthorized AI-generated replicas of their likeness or voice.
Notice-and-Takedown System: Platforms must remove deepfakes once notified, shielded from liability if they act promptly—similar to DMCA protocols.
Licensing Limitations: Rights cannot be assigned during an artist’s lifetime, and licensing terms must be limited to ten years with clear usage definitions to protect against overreach.
Protection Period: Rights could extend up to 70 years posthumously (after the death of the original creator) if properly renewed, helping creators preserve postmortem legacy control.
Balanced Regulation: The bill includes free-speech safeguards and exemptions to maintain creative expression and allow legitimate AI usage.

Benefits

Independent artists gain real ownership over their creative voices and faces, with legal means to prevent unauthorized cloning. This legal authority would empower creators with control over how their digital identity is used and add another layer of protection over their works, brand, and identity.
Legacy creators and estates will have long-term control over posthumous uses.
Fans and consumers are protected against deception, while responsible AI innovation, which can aid in the artist process, remains possible thanks to carefully crafted exceptions.