PROPOSED Terms Under Consideration in Performance Tax Discussion
In 2009, Rep. John Conyers (MI-14) and Sen. Patrick Leahy (VT) introduced the Performance Rights Act (PRA) in the House and Senate, respectively. The legislation was voted out of the respective Judiciary Committees and has the support of certain members of congressional leadership.
Broadcasters' counter resolution – the Local Radio Freedom Act – garnered significant support, which has helped prevent further movement on PRA.
At the direction of House and Senate leaders in late 2009, NAB met with MusicFirst – representing artists, labels and unions. To date discussions have yielded the following potential terms. These terms have NOT BEEN AGREED TO, but are under discussion by the industry.
• Tiered rate of 1% or less for all net revenue (roughly $100 million for the industry) which is permanent and can not be adjusted without changing statute or by mutual agreement
• PERMANENT removal of CRB jurisdiction for terrestrial and streaming
• Streaming rate reduction from current rates
• Inclusion of radio chips on all mobile phones
• AFTRA issues resolved (agency commercial replacement on webcasts)
The tiered rate of 1% or less for all net revenue would be as follows:
• Commercial and non-profit stations with revenue less than $50,000 annually would pay the lesser of $100 or 1% of revenue annually
• Commercial and non-profit stations with revenue between $50,000 to $100,000 annually would pay $500 annually
• Non-profit stations with revenue more than $100,000 annually would pay $1,000 annually
• Commercial stations with revenue between $100,000 to $500,000 annually would pay the lesser of $2,500 or 1% of revenue annually
• Commercial stations with revenue between $500,000 to $1,250,000 annually would pay $5,000 annually
• Commercial stations with revenue more than $1,250,000 annually would pay 1% of revenue annually
It is important to note that stations with incidental music use – news, talk and sports radio – would not pay for music. Additionally, religious services – not religious music – would be exempt from music fees.
The above referenced rates would be permanently fixed by statute and can only be changed by act of Congress or joint agreement between both parties.