§ 1235. Taxes paid to other jurisdictions. (a) With respect to taxes imposed pursuant to subdivision (a) of section twelve hundred ten and pursuant to section twelve hundred eleven, the use of tangible personal property purchased at retail and of any of the services subject to the sales tax shall be exempt from the compensating use tax authorized under subdivision (a) of such section twelve hundred ten and under section twelve hundred eleven, to the extent that a retail sales tax or a compensating use tax was legally due and paid thereon, without any right to a refund or credit thereof, to (1) any municipal corporation in this state or (2) any other state or jurisdiction within any other state, but only when it is shown that such other state or jurisdiction allows a corresponding exemption with respect to the sale or use of tangible personal property or of any of the services upon which such a sale or compensating use tax was paid to this state and any of its municipal corporations, except as provided in subdivision (b) of this section.

(b) To the extent that a compensating use tax imposed pursuant to this article and the compensating use tax imposed by article twenty-eight are at a higher aggregate rate than the rate of tax imposed in any other state or jurisdiction within any other state, the exemption provided in subdivision (a) of this section shall be inapplicable and the taxes imposed pursuant to this article and by article twenty-eight shall apply to the extent of the difference between such aggregate rate and the rate paid in such other state or jurisdiction. In such event, the amount payable shall be allocated between the tax imposed pursuant to this article and the tax imposed by article twenty-eight in proportion to the respective rates of such taxes. 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 a compensating use tax imposed by any other municipal corporation in this state and such tax is at a higher rate than the rate of tax imposed by the first municipal corporation, the tax of the municipal corporation with the higher rate shall also apply but only to the extent of the difference in such rates and such tax shall be distributable to such municipal corporation, pursuant to section twelve hundred sixty-one, without allocation as hereinabove provided. Where a retail sales tax or a compensating use tax was legally due and paid to this state only, 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 a compensating use tax imposed by a municipal corporation in this state, such tax shall be distributable to the municipal corporation, pursuant to section twelve hundred sixty-one, without allocation as hereinabove provided.

(c) For purposes of this section, a payment to the tax commission of a tax imposed by a municipal corporation shall be deemed a payment to such municipal corporation.