Radio…to Tax…or not to Tax

By Christopher Smith

Two bills currently in legislation being dubbed the performance rights acts are proposing a new tax on radio stations to pay major record labels for playing their artist songs on the radio, which could decrease the popularity of many radio stations and send some out of business.

The two bills H.R. 848 and S. 379, one in the House of Representatives and one in the Senate still being revised by U.S. congress men currently propose major taxation on commercial radio stations. These bills if passed will also affect terrestrial stations such as small, non-commercial, or religious radio stations. If these stations earn less than $1,250,000 a year in gross revenues the station may pay $5,000 a year in royalty fees. This could mean bad news for college radio stations such as Towson’s own WTMD.

WTMD

“WTMD is a non-commercial radio station and a $5000 fee can hurt our station, but it wouldn’t shut down operation,” said Tyler Laporte music director of WTMD. “I don’t understand the purpose of the tax when we already pay dues to certain syndicated programs such as BMI and ASCAP.” He said.

“I wasn’t aware of such a bill going through legislation,” said Towson University sophomore Diego Lopez standing alongside his roommate outside of Towson Run apartments. His roommate Danny Burgee thought the tax was going to benefit local radio stations.

Anti-Performance Tax

There are some organizations out there trying to prevent the potential passing of the radio tax in both House and Senate. The most notable and even broadcasted on many major stations is the website noperformancetax.org an introduction from their website states “For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship: free play for free promotion. And it works. It’s a relationship that has sustained businesses on both sides. In fact, radio’s free promotion of artists translates to as much as $2.4 billion annually in music sales for record labels and artists. And this doesn’t even include the enormous revenues they receive from concerts and merchandising.”

The site has had many major radio stations such as 92.3 WERQ-FM and 93.9 WKYS-FM broadcast their message and website url on the air. The site has various news stories posted from around the U.S. pertaining to the performance tax situation and ways that broadcasters and radio listeners can get involved.

“Congress has continually recognized that local radio is different from other musical platforms and should not be subject to a performance tax. Local radio is free, so everyone, regardless of income, can have access to it. Local radio also has to fulfill certain public service obligations that other platforms do not. And importantly, the free music that radio plays provides free promotion to the record labels and artists” This is the sites reason for the right not to tax radio stations.

The Anti-Bills

According to the site there are also anti-performance tax solutions in both House and Senate H. Con. Res. 49 and S. Con Res. 14 that have been introduced by Congressman Gene Greene and Mike Conaway in the House of Representatives and Senators Blanche Lincoln and John Barasso. As of now bills of both sides haven’t made much progress in the legislative process