By Jordan Heller
DNAinfo Reporter/Producer
MANHATTAN — New York City lost out on more than $46 million in back taxes and interest from Indian and Mongolian diplomats on Tuesday, thanks to a federal Second Circuit Court of Appeals decision.
The city filed a suit against the Indian and Mongolian missions to the United Nations to recoup the decades of back taxes, but because the State Department exempts diplomats from paying city property taxes — including past-due bills — a judge decided against the city in the suit.
While the three-judge panel admitted that there is "perhaps some unfairness to the City," they sided with the feds.
"This unfairness inheres in the federal government's unquestioned supremacy in the management of foreign relations," the ruling stated.
At issue were $42.5 million in back taxes and interest owed by Indian mission staffers and $4.4 million owed by Mongolian mission staffers.
City Corporation Counsel Michael Cardozo wants to appeal the decision to the United States Supreme Court, according to the New York Post.
“We are extremely disappointed that the court has upheld the State Department’s extraordinary exercise of power to nullify New York City's right, as previously upheld by the courts, to impose New York City real estate taxes on foreign missions," Cardozo said, reported the paper.
"This provides a free ride for foreign countries owning certain properties in New York City while unnecessarily burdening local taxpayers. We have prevailed in the U.S. Supreme Court previously on related issues, and again plan to seek review of this decision in that Court."
