N.Y. GCM Law § 4-B

§ 4-b. Credit relating to certain sales and compensating use taxes.\n(1) In addition to the credit allowed by section four-a of such chapter,\na taxpayer shall be allowed a credit against the tax imposed by this\npart to be credited or refunded in the manner hereinafter provided in\nthis section. The amount of such credit shall be the excess of (A) the\namount of sales and compensating use taxes imposed by section eleven\nhundred seven of the tax law during the taxpayer's taxable year which\nbecame legally due on or after and was paid on or after July first,\nnineteen hundred seventy-seven, less any credits or refunds of such\ntaxes, with respect to the purchase or use by the taxpayer of machinery\nor equipment for use or consumption directly and predominantly in the\nproduction of tangible personal property, gas, electricity,\nrefrigeration or steam for sale, by manufacturing, processing,\ngenerating, assembling, refining, mining or extracting, or telephone\ncentral office equipment or station apparatus or comparable telegraph\nequipment for use directly and predominantly in receiving at destination\nor initiating and switching telephone or telegraph communication, but\nnot including parts with a useful life of one year or less or tools or\nsupplies used in connection with such machinery, equipment or apparatus\nover (B) the amount of any credit for such sales and compensating use\ntaxes allowed or allowable against the taxes imposed by any local law of\nthe city imposing a tax on utilities and vendors of utility services,\nfor any periods embraced within the taxable year of the taxpayer under\nthis part. (2) The credit allowed under this section for any taxable\nyear shall be deemed to be an overpayment of tax by the taxpayer to be\ncredited or refunded, without interest, in accordance with the\nprovisions of section seventy-seven of this title. (3) Where the\ntaxpayer receives a refund or credit of any tax imposed under section\neleven hundred seven of the tax law for which the taxpayer had claimed a\ncredit under the provisions of section four-b of such chapter in a prior\ntaxable year, the amount of such tax refund or credit shall be added to\nthe tax imposed by section three of such chapter, and such amount shall\nbe subtracted in computing entire net income for the taxable year.\n