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Section 38 property (defined in sec. 48(a)),
is the only property (either new or used)
which is treated as "qualified investment."
Except for the exclusions noted below, all
tangible personal property qualifies as
section 38 property. Except for buildings and
their structural components, real property
which is used as an integral part of
manufacturing, production or extraction or of
furnishing transportation, communications,
electrical energy, gas, water or sewage
disposal services also qualifies as section 38
property. This is also true of real property
(other than buildings and structural
components) used for research or storage
facilities with respect to any of the above
categories. Tangible personal property is not
intended to be defined narrowly here, nor to
necessarily follow the rules of State law. It
is intended that assets accessory to a
business such as grocery store counters,
printing presses, individual air-conditioning
units, etc., even though fixtures under local
law, are to qualify for the credit.
Similarly, assets of a mechanical nature, even
though located outside a building, such as
gasoline pumps, are to qualify for the credit.
Real property (other than buildings and
structural components) which qualifies as
integral parts of categories referred to above
includes such assets as blast furnaces, oil
and gas pipelines, railroad track and signals,
and fences used in connection with raising
cattle.
S. Rept. 1881, 87th Cong., 2d Sess. (1962), 1962-3 C.B. 703, 722.
As I read the majority opinion, the sole stated reason for
holding that the computer software at issue is tangible personal
property, qualifying for the investment tax credit, is as follows:
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
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