The radio broadcasting industry is already hurting because advertisers are cutting back in a down economy.

Now they face another threat—a new tax that could eat at their profits and force layoffs or radical changes in format. It’s called a ‘performance tax,’ and it's a proposal making it's way through Congress that could cost Minnesota radio stations $30 million every year.

Currently, every time a radio station plays a song, the station pays a royalty to the songwriter of every song. But now, stations might also have to pay a tax on every song that would eventually go to the musicians and singers.

"Larger stations it would impact their profitability. Smaller stations it might even impact their viability," explained Jim Dubois with the Minnesota Broadcasters Association.

He says the organization is adamantly opposed to the so-called ‘performance tax,’ which has been supported by the recording industry who have seen CD sales decline as less profitable digital downloads now dominate.

It also has the support of Minnesota Rep. Collin Peterson, D-7th District, a co-author of the bill who also plays in a Congressional band called the Second Amendments.

Peterson is sympathetic toward other musicians, but Dubois says music radio is still the best promotional tool musicians have.

"People still tend to buy music based on what they hear on the radio. That's still the predominant force for making music-buying decisions, and the record labels threaten to blow up that relationship if they try to impose this tax on broadcasters," Dubois said.

A call to Peterson's office went unreturned.

The 'performance tax' bill is currently moving through the House and Senate. Many radio stations, including some in the Twin Cities, have started running advertisements opposing the tax.