§ 4-e. Credit relating to certain sales and compensating use taxes.
(1) in addition to any other credit allowed by this section, a taxpayer
shall be allowed a credit against the tax imposed by this part to be
credited or refunded in the manner hereinafter provided in this section.
The amount of such credit shall be equal to one-half the amount of sales
and compensating use taxes imposed by section eleven hundred seven of
the tax law during the taxpayer's taxable year which became legally due
on or after and was paid on or after July first, nineteen hundred
eighty-one, less one-half of any credits or refunds of such taxes, with
respect to the purchase or use by the taxpayer of (i) parts with a
useful life of one year or less, tools and supplies for use or
consumption directly and predominantly in the production of tangible
personal property, gas, electricity, refrigeration or steam for sale by
manufacturing, processing, generating, assembling, refining, mining or
extracting or for use directly and predominantly in or on telephone
central office equipment or station apparatus or comparable telegraph
equipment where such equipment or apparatus is used directly and
predominantly in receiving at destination or initiating and switching
telephone or telegraph communication, and (ii) the service of
installing, repairing, maintaining or servicing the tangible personal
property described in section four-b of this part, including the parts
with a useful life of one year or less, tools and supplies described in
clause (i) of this subdivision. The foregoing credit shall be reduced
by the amount of any credit for such sales and compensating use taxes
allowed or allowable against the taxes imposed by any local law of the
city imposing a tax on utilities and vendors of utility services, for
any periods embraced within the taxable year of the taxpayer under this
part.

(2) The credit allowed under this section for any taxable year shall
be deemed to be an overpayment of tax by the taxpayer to be credited or
refunded without interest in accordance with the provisions of section
seventy-seven of this title.

(3) Where the taxpayer receives a refund or credit of any tax imposed
under section eleven hundred seven of the tax law for which the taxpayer
had claimed a credit under the provisions of this section in a prior
taxable year, the amount of such tax refund or credit shall be added to
the tax imposed by section three of this part, and such amount shall be
subtracted in computing entire net income for the taxable year.