The US Supreme Court today upheld a decision by a federal appeals court that had exempted the Indian and Mongolian missions from paying nearly $50 million in property taxes here.
In 2010, the second US circuit court of appeals in Manhattan upheld the state department intervention in 2009, which exempted taxes on property owned by foreign governments and UN missions that housed diplomatic staff.
In 2008, a federal district judge had ruled that India, which owns a 26-storey property near the UN, owed $42.5 million and Mongolia $4.4 million.
“It doesn’t matter what is fair or not fair,” Aaron Stiefel, the Indian mission’s lawyer, said after the Supreme Court denied New York City’s petition. Stiefel said the rule of reciprocity applied to the case since US diplomatic buildings in India were not taxed.
“While there is perhaps some unfairness to the city when the federal government retroactively declares property taxes imposed by the city against foreign countries to be null and void, this unfairness inheres in the federal government’s unquestioned supremacy in the management of foreign relations,” the judges wrote.
The state department had argued that if foreign properties in the US were taxed, then the US would have to pay millions of dollars in taxes for its own diplomatic buildings in many countries.
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