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US Supreme Court To Hear Foreign Objections To Paying NYC Tax January 19, 2007

Posted by notapundit in Judiciary, US News.

WASHINGTON (AP)–Foreign countries fighting New York City’s effort to collect property taxes from them will get the chance to make their case to the U.S. Supreme Court.

The justices said Friday they will review a lower court ruling allowing the city to sue countries that own property near the U.N. over unpaid taxes.

The city has battled over property taxes for years with countries that house their consulates and diplomatic missions in Manhattan skyscrapers.

Under U.S. treaties, embassies and other diplomatic buildings are generally tax-exempt, but the city claims some countries are refusing to pay taxes on real estate used for non-diplomatic purposes, such as restaurants and apartments.

Two countries sued by the city, India and Mongolia, had argued that sovereign immunity meant they could not be sued in U.S. courts.

The 2nd U.S. Circuit Court of Appeals ruled last April, affirming a lower-court decision that federal courts have the power to resolve such disputes.

The city is seeking $16.4 million in unpaid taxes and interest from India and $2.1 million from Mongolia, the Justice Department said in legal papers filed in support of the foreign governments.

New York City has singled out only a few countries with lawsuits. It has failed in attempts to collect taxes from other countries, including Hungary, Libya, Rwanda, Nigeria and Uganda. Turkey settled a lawsuit for $5 million, far less than the city initially said it owed.

A federal law requires the U.S. government to withhold some aid to nations that fail to pay real estate taxes on buildings in New York or Washington, D.C., but only if a U.S. court decides that the debts are valid.


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