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Tax Regs., 61 Fed. Reg. 58152 (Nov. 13, 1996) (proposed
regulations that distinguish between a copyrighted article and a
copyright right in clarifying the treatment under certain
provisions of the Code and tax treaties of income from
transactions involving computer programs). In light of the
legislative directive to construe the term “tangible personal
property” broadly and “[t]he objective of the investment credit
* * * to encourage modernization and expansion of the Nation’s
productive facilities and thereby improve the economic potential
of the country”, S. Rept. 1881, supra, 1962-3 C.B. at 717, we
believe that petitioner's acquisition of the operating and
applications software without any associated, exclusive,
intangible intellectual property rights is precisely the type of
investment Congress intended to encourage in enacting the ITC.
Therefore, the computer software acquired by petitioner
constitutes tangible personal property eligible for the ITC.
Although we have not relied here on a consideration of
intrinsic value, we do not necessarily disagree with the
conclusion in Ronnen v. Commissioner, 90 T.C. 74 (1988), that the
software acquisition in issue in that case was ineligible for the
ITC. It must be remembered that the corporation in that case
received more than a limited license to use a copy of the tapes;
the corporation received the right to commercially exploit the
tapes in a particular territory. That suggests the acquisition
of copyrightlike rights. Lastly, we did not make an inquiry into
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