The Export Property Analysis
Export property is defined to mean, in general, property that is:
1. Manufactured, produced, grown or extracted in the United States by a person other than a DISC,
2. Held primarily for sale, lease, or rental, in the ordinary course of trade or business, by, or to, a DISC, for direct use, consumption, or disposition outside the United States and
3. Not more than 50 percent of the fair market value of which is attributable to articles imported into the United States.
Export property does not include “patents, inventions, models, designs, formulas, or processes, whether or not patented, copyrights (other than films, tapes, records, or similar reproductions, for commercial or home use), good will, trademarks, trade brands, franchises, or other like property . . . “
Although a copyright such as a copyright on a book does not constitute export property, a copyrighted article (such as a book) if not accompanied by a right to reproduce it is export property. The legislative history of the DISC states the following: “Although generally the sale or license of a copyright does not produce qualified export receipts (since a copyright is generally not export property), the sale or lease of a copyrighted book, record, or to her articles does generally produce qualified export receipts”.
Computer software can be export property. Computer software tapes are akin to the copyrighted books, which qualify as export property. Computer programs are standardized programs that are manufactured in the United States by a person other than a DISC and then marketed outside the United States. This is not selling the source code or master recording. Those purchasing or leasing programs do not have the right to reproduce the software.
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