Ch. 155

1996 LAWS OF MARYLAND

(1994 Replacement Volume and 1995 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article - Tax - Property

7-238.

(A)     (1) IN THIS SECTION THE FOLLOWING WORDS HAVE THE MEANINGS
INDICATED.

(2)     (I) "COMPUTER SOFTWARE" MEANS ANY PROGRAM OR ROUTINE
USED TO CAUSE A COMPUTER TO PERFORM A SPECIFIC TASK OR SET OF TASKS.

(II) "COMPUTER SOFTWARE" INCLUDES:

1.       SYSTEM AND APPLICATION PROGRAMS; AND

2.       DATABASE STORAGE AND MANAGEMENT PROGRAMS.

(3)     "EMBEDDED SOFTWARE" MEANS COMPUTER INSTRUCTIONS,
KNOWN AS MICROCODE, THAT:

(I)      RESIDE PERMANENTLY IN THE INTERNAL MEMORY OF A
COMPUTER SYSTEM OR OTHER EQUIPMENT; AND

(II)    ARE NOT INTENDED TO BE REMOVED WITHOUT TERMINATING
THE OPERATION OF THE COMPUTER SYSTEM OR EQUIPMENT AND REMOVING A
COMPUTER CHIP, A CIRCUIT, OR ANOTHER MECHANICAL DEVICE.

(B)     EXCEPT AS PROVIDED IN SUBSECTION (C) SUBSECTIONS (C) AND (D) OF
THIS SECTION, COMPUTER SOFTWARE AND ANY DOCUMENTATION RELATED TO
THE COMPUTER SOFTWARE ARE NOT SUBJECT TO VALUATION OR PROPERTY TAX.

(C)     THE EXEMPTION UNDER THIS SECTION DOES NOT APPLY TO COMPUTER
SOFTWARE OR ITS RELATED DOCUMENTATION IF:

(1) THE COMPUTER SOFTWARE IS EMBEDDED SOFTWARE; OR

(2) THE COMPUTER SOFTWARE IS SOLD FROM STOCK IN BUSINESS
UNDER § 8-110 OF THIS ARTICLE IN A TANGIBLE MEDIUM READY FOR USE AS IS.

(D)    WHEN REPORTING PERSONAL PROPERTY UNDER TITLE 11 OF THIS
ARTICLE, A BUSINESS MAY NOT REDUCE THE ORIGINAL COST OF THE COMPUTER
HARDWARE BY THE VALUE OF THE COMPUTER SOFTWARE THAT IS ACQUIRED AS
PART OF THE PURCHASE OF COMPUTER HARDWARE.

9-227.

(A) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION, THE
GOVERNING BODY OF A COUNTY OR MUNICIPAL CORPORATION MAY GRANT, BY LAW, A
PROPERTY TAX CREDIT FOR UP TO 100% OF THE COUNTY PROPERTY TAX IMPOSED ON
BUSINESS PERSONAL PROPERTY THAT IS COMPUTER SOFTWARE.

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