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A federal judge ruled yesterday that diplomatic privileges and niceties don't exempt the countries from having to pay at least some local taxes on the buildings that house staff and offices for their missions to the United Nations.
Under international treaties, consulates and embassies are generally tax exempt. Their status as sovereign territory often puts them outside the reach of US law.
But in New York's case, the city argued that it had a right to collect taxes on portions of the structures used for non-diplomatic purposes.
India's 26-story tower near the UN holds 20 floors worth of apartments, all occupied by diplomatic employees.
Mongolia's six-story building has two floors that serve as staff residences. The Philippines' building, on a prime stretch of Fifth Avenue, has had a variety of commercial tenants, including a restaurant, a bank and an airline office.
For years, the three countries simply ignored their New York City tax bills, but the legal tide turned in the city's favor when the Supreme Court ruled in June that the nations could, indeed, be sued over the matter in US courts.
In a written opinion issued on Friday, US District Judge Jed Rakoff sided with the city, which could put the three countries on the hook for a big payout.
As of September, the city claimed India owed it USD 39.4 million, a total that includes millions of dollars in interest. Mongolia owed USD 4.2 million.
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RatingWell, India has to pay taxes to the city as they provide the services to the consulate too. It is only in India that free loaders get government bunglows for free and tax payers picks the tab. What India got under PL 480, only the interest of those billions of $$, would pay the taxes.Shame on consulate that after charging hafty fees for the visas, can't afford to pay the building taxes! India can charge the similar taxes to US consulates too.
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