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The Court of Appeals for the Sixth Circuit in Comshare, Inc.
v. United States, supra, reached a result different from ours in
Ronnen and its progeny. The court in Comshare held that tapes and
disks containing computer program master source codes are tangible
personal property; consequently, the purchaser of the tapes and
disks was entitled to investment tax credits and accelerated
depreciation deductions calculated on the full investment.
A discussion of the case law in this area is set forth in the
majority opinion pp. 12-18; no useful purpose would be served by
repeating it here.
III. Intrinsic Value Test
The intrinsic value test, which the majority criticizes, is a
facts and circumstances test first enunciated by the U.S. Court of
Appeals for the Fifth Circuit in Texas Instruments, Inc. v. United
States, 551 F.2d 599 (5th Cir. 1977). In applying the intrinsic
value test, one compares the investment in the intangible aspects
of the property being characterized (here, the software program; in
Texas Instruments, the seismic data) with the investment in the
tangible embodiments (here, the tapes and disks; in Texas
Instruments, the film and tapes). After making the comparison, if
the property's "intrinsic value is attributable to its intangible
elements rather than to any of its specific tangible embodiments",
the property is considered intangible. Id. at 609.
We adopted the intrinsic value test in Ronnen v. Commissioner,
supra, and held that computer software is intangible property
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