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Taxing Facebook Code: Debugging the Tax Code and Software

68 Pages Posted: 17 Feb 2012 Last revised: 23 Oct 2013

Xuan-Thao Nguyen

Indiana University Robert H. McKinney School of Law, Center for Intellectual Property & Innovation

Jeffrey A. Maine

University of Maine School of Law

Date Written: January 1, 2012

Abstract

This article sets out to analyze both intellectual property laws and tax systems as applied to computer software. It analyzes software within intellectual property's established doctrinal framework, a difficult task due to the fact that software can encompass some combination of the traits of copyrights, trade dress, patents, and trade secrets. It then examines both the federal and state tax systems governing software. It shows that fitting software within current tax schemes presents unique challenges, as software contains both tangible and intangible elements, is subject to varying intellectual property protections, and can be delivered through various media. The article argues that there are a number of incongruous tax distinctions for software that are theoretically and analytically unsatisfactory. The article also points out certain flaws in the design of several tax preferences for software.

Keywords: software, tax, intellectual property, patents, copyrights, trade secrets, society, innovation, investment, subsidy, research, tangible, intangible, internet, sales

JEL Classification: H20, H21, H24, H25, E62

Suggested Citation

Nguyen, Xuan-Thao and Maine, Jeffrey A., Taxing Facebook Code: Debugging the Tax Code and Software (January 1, 2012). Buffalo Law Review, Vol. 60, No. 1, 2012; SMU Dedman School of Law Legal Studies Research Paper No. 98. Available at SSRN: https://ssrn.com/abstract=2005744 or http://dx.doi.org/10.2139/ssrn.2005744

Xuan-Thao Nguyen

Indiana University Robert H. McKinney School of Law, Center for Intellectual Property & Innovation ( email )

530 West New York Street
Indianapolis, IN 46202
United States
317-274-8146 (Phone)

HOME PAGE: http://mckinneylaw.iu.edu/faculty-staff/profile.cfm?Id=582

Jeffrey A. Maine (Contact Author)

University of Maine School of Law ( email )

246 Deering Avenue
Portland, ME 04102
United States

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