New York City Sues Four Nations For Defaulting On Real Estate Tax

by Leroy Baker, Tax-News.com, New York

11 April 2003

Mayor of New York, Michael Bloomberg, announced this week that the city is suing Turkey, the Philippines, India and Mongolia for over $100 million in real estate back taxes and interest.

It is claimed that as the governments of these nations used property in the city for commercial purposes, they were thus liable for city estate taxes. The law dictates that foreign governments are only exempt from city taxes if they are using a building as a consulate or a mission.

According to reports, the greatest offender of the four nations is Turkey, which Bloomberg claims owes the city some $70 million arising from its commercial use of 821 United Nations Plaza over a twenty year period.

The Philippines, meanwhile, have been asked to hand over $17.7 million for use of a property on 5th Avenue by the Philippine National Bank, Philippine Airlines, and a restaurant between 1974 and 1996.

India, it is alleged, owes the city $16.4 million for the improper use of a building on East 43rd street, as it is claimed the government used this as a residence rather than an official mission or consulate. A similar charge has been levelled against Mongolia, which supposedly owes New York $2.1 million in back taxes.

Commenting on the decision to chase the back taxes in such an aggressive manner, Bloomberg explained: "The vast majority of foreign countries and other foreign entities in the city, like most other responsible property owners, pay their real estate taxes in a timely manner.

"Unfortunately, there are a handful of countries that consistently fail to pay these taxes. Although we are proud to be the host city of the United Nations, one thing we simply cannot afford is to be taken advantage of by our guests, especially considering our fiscal condition."

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