1. (a) Credits allowable under this Part that cannot be carried forward to subsequent taxable years are deducted before the credits allowable under this Part that can be carried forward to subsequent taxable years and before the carry-over of credits from prior taxable years.

2. (b) Credits against tax allowable in this Part are applied in the following sequence:

   1. (1) eligible business facility credit;
   2. (2) economic development zone capital corporation tax credit;
   3. (3) credit for servicing mortgages;
   4. (4) economic development zone wage tax credit; and
   5. (5) credit for the special additional mortgage recording tax.

3. (c) The following is an example of the application of credits against tax:

   Example:

   A taxpayer determines that its New York State franchise tax for taxable year 1990 is $15,000 before any credits are allowed. The taxpayer has a credit for the special additional mortgage recording tax of $8,000, an eligible business facility credit of $6,000, a credit for servicing mortgages of $10,000, an economic development zone capital corporation tax credit of $1,000 and an economic development zone tax credit of $2,000. The taxpayer is first allowed the eligible business facility credit of $6,000. Secondly, the economic development zone capital corporation tax credit of $1,000 is allowed. Thirdly, a credit for servicing mortgages of $8,000 is allowed because this credit may reduce the tax to zero. The unused portion of this credit may not be carried forward. The taxpayer is allowed to carry forward to the succeeding taxable year or years an economic development zone wage tax credit of $2,000 and a credit for the special additional mortgage recording tax of $8,000.

Tax Law, § 1456(e)