TAXATION
Artists. Composers

Starting next year, composers will be able to claim capital-gains treatment when they sell a catalogue of their work. Current tax law treats such a sale as income and therefore liable to ordinary income-tax rates. This brings writers and composers into line with producers who already had the more favoured tax treatment. Originally called the Songwriters Capital Gains Tax Equity Act, later dovetailed into the Tax Reconciliation Act, the bill was passed after unusual lobbying from musicians who would take their guitars to Washington and sing songs to members of Congress and the US Senate. Buyers of catalogues are also now able to write off the song more quickly. The Bill is expected only to cost US $33 million over ten years. Tax on royalty payments remains unchanged by the new Act.

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