SPIRO T. AGNEW, Governor                        787

(3)    The sale of tangible personal property to contractors,
builders or landowners for use or resale in the form of real estate.

(4)    The sale of natural or artificial gas, oil, electricity, coal
or steam, when made to any purchaser for purposes other than re-
sale or for use in manufacturing, assembling, processing or, refining
OR IN THE GENERATION OF ELECTRICITY.

(5)    The sale or charges for any room, or rooms, lodgings, or
accommodations to transient guests.

(6)     Sales of tangible personal property and/or services to any
person who will use the same as facilities, tools, tooling, machinery
or equipment (including, but not limited to dies, molds, and pat-
terns) even though such person intends to transfer and/or does
transfer title to such property or service either before or after such
person uses the facilities, tools, tooling, machinery, or equipment.

If the user of facilities, tools, tooling, machinery or equipment
(including, but not limited to, dies, molds and patterns) is under
obligation by the terms of a written contract, at the time he pur-
chases the facilities, tools, tooling, machinery or equipment (includ-
ing, but not limited to, dies, molds and patterns) to transfer title
to the same, at a price equal to or greater than his purchase price,
to the person for whom he manufactures goods or performs work,
such transfer shall not give rise to a second tax.

(7)    The sale or charges for telephone, telegraph, teletype-
writer, or other telecommunication messages or service, EXCEPT
SUCH MESSAGES OR SERVICE AS ARE PROVIDED BY MEANS
OF COIN-OPERATED TELEPHONES.

(s) Manufacturing machinery and equipment means all machin-
ery and equipment which by acceptable and consistent accounting
standards is capitalized for the purpose of claiming depreciation and
which is used in manufacturing, assembling, processing or refining
products for sale or in the generation of electricity, or research and
development. It shall include all machinery and equipment used in
any stage of such operations from the handling of raw materials
or components on the manufacturing site until the product is ready
for delivery or storage. It shall also include capitalized replacement
parts upon manufacturing machinery and equipment, and the pur-
chase of capitalized services for the assembly, or fabrication of
manufacturing machinery or replacement parts thereof. It shall
not include machinery or equipment used in administration, man-
agerial, sales and other non-operational activities. The term also does
not include any personal property which when installed becomes a
part of the real estate, (but does include foundations in support
of machinery and equipment) nor does it include tools and appli-
ances which are charged to expense accounts and/or are not capital-
ized. Specifically included, however, is any machinery, device, or
equipment, which might normally be considered as a part of real
estate, required to conform to air or water pollution laws or regula-
tions and melting, smelting, heating, annealing, or coke oven furnaces.

(t) "Research and development" means basic and applied re-
search in the sciences and engineering, and the design and develop-
ment of prototypes and processes. Excluded from this definition
are routine product testing, market research, sales promotion, sales
service, research in the social sciences or psychology, and other
nontechnical activities or technical and nontechnical services.