Rev. & Tax. Code, § 997

(a) The cash value of records of persons engaged in a business or profession for purposes of this division is the cash value only of the tangible material upon which, or in which, such records are recorded, maintained or stored. Such cash value shall be determined without inclusion of or consideration of the intangible value of the information or data so recorded, maintained or stored, nor the intangible right to utilize such information or data.

(b) As used in this section “records” includes all written documents and photographic reproductions thereof, recorded data, research notes, calculations, and indices maintained or utilized by persons engaged in a business or profession.

(c) Nothing in this section shall prohibit a determination of full cash value for (1) books, (2) old newspapers on microfilm, (3) computer programs and storage media for such programs taxable pursuant to Section 995, (4) records which are held for sale in the ordinary course of business, or (5) records which are purchased from a person who held such records in an inventory of goods for sale in the ordinary course of business. Records sold only when a business is sold shall not be considered as “held for sale in the ordinary course of business.”

(d) Nothing in this section shall prohibit the consideration of research and development, engineering or similar costs in the valuation of tangible property, other than records.