§ 1108. Temporary municipal assistance sales and compensating use
taxes for cities of under one million. (a) General. On the first day of
the first month following the month in which a municipal assistance
corporation is created under article ten of the public authorities law
for a city of less than one million, in addition to the taxes imposed by
sections eleven hundred five and eleven hundred ten, there is hereby
imposed on such date, within the territorial limits of such city, and
there shall be paid, additional taxes, at the rate of three percent,
which except as provided in subdivision (b) of this section, shall be
identical to the taxes imposed by sections eleven hundred five and
eleven hundred ten. Such sections and the other sections of this
article, including the definition and exemption provisions, shall apply
for purposes of the taxes imposed by this section in the same manner and
with the same force and effect as if the language of those sections had
been incorporated in full into this section and has expressly referred
to the taxes imposed by this section.

(b) Exceptions. (1) Notwithstanding any provision of law to the
contrary, the receipts from the following shall be exempt from the tax
on retail sales and the compensating use tax imposed by this section:
All sales of tangible personal property 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; and
all sales of tangible personal property for use or consumption
predominantly either in the production of tangible personal property,
for sale, by farming or in a commercial horse boarding operation, or in
both.

(2) The transitional provisions contained in section eleven hundred
six shall not apply to the taxes imposed by this section.

(3) Where a sale of tangible personal property or services, including
an agreement therefor, is made in a city in which the taxes imposed by
subdivision (a) of this section apply, but the property sold, the
property upon which the services were performed or such service is or
will be delivered to the purchaser elsewhere, such sale will not be
subject to taxes imposed by such subdivision (a). However, if delivery
occurs or will occur in any city where the tax imposed by such
subdivision (a) applies, a vendor will be required to collect from the
purchaser, the sales or compensating use taxes imposed by this section.
For the purposes of this section delivery shall be deemed to include
transfer of possession to the purchaser and the receiving of the
property or of the service by the purchaser.

(4) The provisions of section twelve hundred fourteen shall be
applicable to this section, but any reference in that section to a local
sales or use tax imposed by a city shall mean the additional taxes
imposed by subdivision (a) hereof.

(5) Where a retail sales tax or a compensating use tax was legally due
and paid to any municipal corporation in this state, without any right
to a refund or credit thereof, with respect to the sale or use of
tangible personal property or any of the services subject to sales or
compensating use tax, if the use of such property or services is then
subject to the compensating use tax imposed by this section and such tax
is at a higher rate than the rate of tax imposed by such municipal
corporation, the tax imposed by this section shall also apply but only
to the extent of the difference in such rates. For purposes of this
subdivision, a payment to the tax commission of a tax imposed by a
municipal corporation shall be deemed a payment to such municipal
corporation.

(c) Termination of taxes. At the end of the last day of the month in
which all the notes and bonds of such municipal assistance corporation
shall have been fully paid and discharged, together with interest
thereon and interest on unpaid installments of interest, the taxes
imposed by this section shall terminate. Despite such termination, the
provisions of this section and any regulations promulgated thereunder,
including the provisions with respect to assessment, payment,
termination, collection and refund of such taxes, the requirements for
filing returns, preservations of records and disposition of revenue
shall continue in full force and effect with respect to all such taxes
accrued up to the effective date of such termination.