Norwest Corporation and Subsidiaries - Page 1

                                   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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