SPIRO T. AGNEW, Governor                          789

(2) On each fifty cents (50¢) of price or fraction thereof where
the sale is in excess of one dollar ($1.00), one cent (1¢). The rate
provided in this subsection shall apply to all deliveries completed
on and after July 1, 1968.

326.

(a) Sales to the State of Maryland or any of its political sub-
divisions. Provided that this subsection shall not be construed or
applied to exempt any sale, otherwise taxable under this subtitle,
of tangible personal property to contractors or builders to be used
for the construction, repair or alteration of real property, ON CON-
TRACTS ADVERTISED FOR BIDS AFTER THE EFFECTIVE
DATE OF THIS ACT.

(n) Sales of transportation [and communication] services, [in-
cluding] and the printing and sales of newspapers of any and all
types.

(aa) Sales of all materials which are consumed, mutilated, or
tested to destruction, in the performance of research and develop-
ment, and of all materials which become a component part of any
product produced in the research and development process.

(bb) Sales to all financial institutions, as defined in Section 128A
of this Article, to the same extent that sales to national banks are
exempt under federal law.

(cc) The sale of or charges for telephone, telegraph, or other
telecommunication messages or service; provided that this exemp-
tion shall automatically terminate, without further action by the
General Assembly, and such sales or charges shall become taxable
under this subtitle, upon the taking effect TO BE COLLECTED
UPON ORIGINAL STATEMENTS AND BILLINGS MADE ON OR
AFTER THE EFFECTIVE DATE of Federal legislation reducing
or eliminating the rate of Federal excise tax upon such sales or
charges, to one per cent or less.

372.

(r) Manufacturing machinery and equipment means all ma-
chinery and equipment which by acceptable and consistent account-
ing standards is capitalized for the purpose of claiming depreciation
and which is used in manufacturing, assembling, processing or re-
fining products for sale or in the generation of electricity, or re-
search and development. It shall include all machinery and equip-
ment 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 capital
ized replacement parts upon manufacturing machinery and equip-
ment, and the purchase of capitalized services for the assembly, or
fabrication of manufacturing machinery or replacement parts
thereof. It shall not include machinery or equipment used in ad-
ministration, managerial, 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 founda-
tions in support of machinery and equipment) nor does it include
tools and appliances which are charged to expense accounts and/or
are not capitalized. Specifically included, however, is any machin-