The Taxman Cometh, for Consulates

Sure Mongolia is a sparsely populated nation with a GDP just over 25% of what Wall St. alone pays out in bonuses, but this is New York City; and you gotta pay what you owe. So said a U.S. District Court judge Friday, when he ruled that India, Mongolia, and the Phillipines owed New York City tens of millions of dollars in back taxes.

Generally consulates, missions, and embassies operate under the convention that they are the sovereign soil of the country operating them, but New York contends that any portion of buildings used for strictly non-diplomatic duties has to pay taxes like every business in the city. India and Mongolia's consulates have floors in their buildings that are used as residences for staff; and the Philippines consulate on 5th Ave. has a number of commercial tenants.

The U.S. federal government has been siding with the foreign nations throughout the long-running legal battle, warning that a victory by NYC could result in other nations retaliating and costing the country much more than the City could hope to collect. Lawyers for the city don't really see how that is our problem. So in 2008, New York City to Feds: Drop Dead.

untitled, by nrvlowdown at flickr