§ 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 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 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.