- 11 -
In addition to relying on the cases cited above, petitioner
contends that computer software should be eligible for the
investment tax credit for the following reasons: (1) Congress
did not intend the term “tangible personal property” to be
defined narrowly; (2) the Commissioner has held in Rev. Rul. 71-
177, 1971-1 C.B. 5, that software acquired in conjunction with
the purchase of a new computer is eligible for the ITC; (3) the
Commissioner's treatment of software as “export property”
pursuant to other Code provisions supports a finding that
software is tangible personal property; and (4) software is
treated as tangible property upon which sales and use taxes may
be imposed under the laws of a majority of the States.
Respondent contends that computer software is intangible
property and that our holdings to that effect in Ronnen v.
Commissioner, supra, and its progeny are applicable herein.
Respondent also argues that Comshare, Inc. v. United States,
supra, was incorrectly decided or, alternatively, that Comshare,
as well as the Fifth and Ninth Circuit decisions relied upon by
petitioner, are distinguishable from the present case. Lastly,
respondent disagrees with petitioner's interpretation of and
reliance on the additional authorities mentioned above.
II. Analysis
A. Code and Regulations
Section 38 allows the investment tax credit. The ITC is
calculated as a specified percentage of the taxpayer's investment
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011