108 T.C. No. 18
UNITED STATES TAX COURT
NORWEST CORPORATION AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 13908-92. Filed April 30, 1997.
P purchased operating and applications software
for use in its banking and related businesses. The
software was acquired subject to license agreements
that entitled P to use the software on a nonexclusive,
nontransferable basis for an indefinite or perpetual
term. P did not purchase any exclusive copyright
rights or other intellectual property rights underlying
any of the software in issue and was not permitted to
reproduce the software outside P's affiliated group.
Held: The computer software acquired by P is
tangible personal property eligible for the investment
tax credit. The intrinsic value test set forth in
Texas Instruments, Inc. v. United States, 551 F.2d 599
(5th Cir. 1977), and adopted by this Court in Ronnen v.
Commissioner, 90 T.C. 74 (1988), is not applied to the
computer software in issue. The test of tangibility in
Comshare, Inc. v. United States, 27 F.3d 1142 (6th Cir.
1994), is not adopted.
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