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begin with the term “tangible personal property” and end with an
examination of the legislative history of the ITC.
E. A Traditional Approach
Petitioner acquired operating and applications software that
was subject to license agreements entitling petitioner to use the
software on a nonexclusive, nontransferable basis for an
indefinite or perpetual term. Petitioner 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 the Norwest affiliated group. We
must determine whether the software acquired by petitioner
constitutes tangible personal property for purposes of the ITC.
As an initial matter, the relevant statutory provisions and
regulations thereunder provide limited guidance and do not
resolve the issue of whether the term “tangible personal
property” includes operating and applications software. The
Revenue Act of 1962, Pub. L. 87-834, sec. 2, 76 Stat. 962, first
enacted the investment tax credit. S. Rept. 1881, 87th Cong., 2d
Sess. (1962), 1962-3 C.B. 703, is the report of the Committee on
Finance that accompanied H.R. 10650, which became the Revenue Act
of 1962. S. Rept. 1881, supra, 1962-3 C.B. at 722, stated that,
except for specified exclusions, “all tangible personal property
qualifies as section 38 property. * * * Tangible personal
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