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JACOBS, J., dissenting: The majority ruling today overturns
this Court's firmly established jurisprudence by holding that
computer software is tangible personal property, eligible for the
investment tax credit. I believe the majority is wrong; therefore,
I dissent.1
I. Preliminary Matters
A. Software's Encoded Information Is Intellectual Property,
Which Is Intangible
Preliminarily, computer software possesses both tangible and
intangible characteristics. Computer programs like the ones in
issue are configurations of executable code that instruct a
computer to process data in a specified manner. The encoded
information is intangible property; the computer tapes and disks on
which the information is embodied is tangible property. Comshare,
Inc. v. United States, 27 F.3d 1142, 1145 (6th Cir. 1994).
Although a program may be perfectly reproduced onto numerous
tangible residences, the program itself is inherently intellectual
property. And intellectual property is intangible property.
B. Purchaser of Software Only Interested in Using the
Intellectual Property Contained on Tapes and Disks
When one acquires computer software, the item desired is the
intellectual property stored on the tangible disk or tape, i.e.,
the computer program, not the disk or tape itself. See Bank of
1 I was the trial Judge in this case. The majority opinion
adopted my findings of fact. The adopted findings of fact are
accurate.
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