dfk41
David,
I'll just add that hardware and software are separate. You can purchase test instruments from HP, Agilent or many others for example and the two are separate and taxed separately
Most computers and phones are designed with a specific OS in mind but can run fine with alternatives. I cannot tell you how many versions of MS-DOS, Windows, Classic Mac OS, older versions of OSX, various UNIX / LINUX versions, and console OS, are running on my Apple laptop.
They are not monolithic and it seems, generally the tax people recognize this. It really is not a problem intrinsically.
None of this is new. IBM, Digital (DEC) HP, Sun, and all the rest were doing this since at least the Sixties. It is common practice and commonly accepted.
Also, this is jogging my memory from many decades ago. Canned software (word processors and such) were taxed at one rate here in NYC; software tools (compilers, databases, etc) at a different rate, and custom software at yet another. But this was in NYC. In Boston or Chicago, the rates and rules were different.
Not worth worrying about unless you are a tax lawyer and can drain (help) some client company stay compliant.