A bill to amend the Internal Revenue Code of 1954 to exclude from inclusion in personal holding company income computer software royalties received by businesses actively engaged in developing, manufacturing, and producing computer software, and for other purposes.

Amends the Internal Revenue Code to exclude from personal holding company income computer software royalties received by businesses actively engaged in developing, manufacturing, and producing computer software. Requires the deductions for trade or business expenses and research and experimental expenditures of the company to equal or exceed 25 percent of the ordinary gross income of the company. Requires that the dividends paid during the year equal or exceed the excess of the personal holding company income over ten percent of ordinary gross income.

Provides special rules for members of an affiliated group. Excludes computer software royalties from foreign personal holding company income.