New Tax Law Benefits Songwriters
Last week the Songwriters Capital Gains Tax Equity Act passed both the U.S. House of Representatives and the U.S. Senate as part of the Tax Reconciliation Act of 2005.
The new legislation, which was signed into law by President Bush on May 17, 2006, will rectify a longtime problem with the Tax Code. When the Songwriters Capital Gains Tax Equity Act takes effect on January 1, 2007, a songwriter who sells the rights to his/her song catalogue will pay 15% in taxes rather than 40% in taxes to the government on the sale of that catalogue.
For music creators, it reflects the value of their intellectual property and gives them the same capital gains opportunities currently enjoyed by all other property owners. And for music publishers, it provides the important right to amortize investments they make in music creators.
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