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(1993). A software industry representative summarized the
industry’s position as follows:
The failure to permit exports of computer
software to qualify for FSC treatment is
counterproductive and inconsistent with the U.S.
interest in fostering the continued growth of
this industry in the United States. In
addition, there is no tax policy reason for
denying exporters of software the tax benefits
of the FSC rules that are available to other
U.S. exporters and in particular the film and
record industries * * *. There is a need for
Congress to clarify the original intent of the
DISC and FSC legislation to encourage U.S.
exports, including software, in light of the
Treasury Department’s temporary FSC regulations.
Therefore, we respectfully request that Congress
enact legislation which would clarify that the
definition of FSC export property includes the
license of computer software to foreign
distributors and customers with the right to
reproduce.
Id. at 644 (statement by James A. Abrahamson, chairman of the board,
Oracle Corp., on behalf of the FSC software coalition). In
addition, the representative complained that the temporary
regulation “adopted a narrow interpretation of the parenthetical
exception and denied any FSC benefits for the license of computer
software if the license is accompanied by the right to reproduce the
computer software.” Id. at 643. These hearings did not result in
a change to section 927(a)(2)(B).
Over the next several years, over 100 members of Congress
requested that the Department of the Treasury amend the temporary
regulation to explicitly extend FSC benefits to the export of
computer software licenses that include reproduction rights abroad.
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