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limits the unfavorable treatment with regard to copyrights.5
B. The Regulations
Section 1.993-3(f)(3), Income Tax Regs., T.D. 7514, 1977-2 C.B.
266, was issued on October 14, 1977,6 excluding copyrights in books
from export property treatment. Section 1.993-3(f)(3), Income Tax
Regs., provides:
(3) Intangible property. Export property
does not include any patent, invention, model,
design, formula, or process, whether or not
patented, or any copyright (other than films,
tapes, records, or similar reproductions, for
commercial or home use), goodwill, trademark,
tradebrand, franchise, or other like property.
Although a copyright such as a copyright on a
book does not constitute export property, a
5 The Taxpayer Relief Act of 1997, Pub. L. 105-34, sec.
1171, 111 Stat. 788, 987, amended sec. 927(a)(2)(B). As a
result, copyrights of computer software are explicitly referred
to as not being excluded property (i.e., such copyrights qualify
as export property). The amendment applies to gross receipts
from computer software licenses attributable to periods after
1997, in tax years ending after Dec. 31, 1997.
The conference report accompanying the Taxpayer Relief Act
of 1997 states that no inference is intended as to the
qualification of computer software licensed for reproduction
abroad as export property under the pre-1997 law. See H. Conf.
Rept. 105-220, at 636 (1997), 1997-4 C.B. (Vol. 2) 1457, 2106.
In reaching our conclusions, we have adhered to this
pronouncement.
6 On Oct. 12, 1977 (2 days before sec. 1.993-3(f)(3),
Income Tax Regs., was issued), the Acting Commissioner of the
Internal Revenue Service sent a memorandum to the Assistant
Secretary of the Treasury recommending approval of sec. 1.993-
3(f)(3), Income Tax Regs., and attached a technical memorandum in
support thereof. The technical memorandum recognized that:
(1) The parenthetical described a limited category of copyright
rights; and (2) sound recording copyrights fell within the
limited category of copyrights saved by the parenthetical.
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