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Rediff News  All News  » Business » New York City sues India for 'unpaid property taxes'

New York City sues India for 'unpaid property taxes'

April 10, 2003 13:26 IST

New York City filed lawsuits against India, the Philippines, Turkey and Mongolia on Wednesday, alleging that the nations together owe over $100 million in unpaid real estate taxes.

The four lawsuits alleged that property taxes for some of the diplomatic offices have not been paid for almost thirty years. India, the lawsuit alleged, owes $16.4 million, of which back taxes total $4.9 million and interest amounts to $11.5 million.

Turkey owes $70 million, of which $62 million is interest; the Philippines owes $17.7, and Mongolia owes $2.1 million, according to the lawsuits.

Turkey and the Philippines, NYC claimed, have been using some of the buildings, including consulates, for commercial purposes -- like banks and restaurants -- and have thus violated their tax-exempt status.

The complaints against India and Mongolia said that people who were not diplomatic heads lived in the mission residences, which also amounts to violation of the tax exemption norms.

Foreign consulates are tax-exempt if they are used only for diplomatic purposes.

Filed in Manhattan State Supreme Court, the lawsuits come at a time when New York tries to manage its worst financial crisis sine the 1970s. Even if NYC recovers the full $100 million it seeks through its lawsuits, it will not be able to bridge a budget gap of about $3.5 billion.

"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 financial condition," NYC Mayor Michael Bloomberg said in a statement.

"Unfortunately, there are a handful of countries that consistently fail to pay these taxes--some for no reason at all, and some under a mistaken impression that their commercial and other non-exempt activities in the city are not taxable," the mayor said Wednesday.

Mayor Bloomberg has advocated a $1 billion commuter tax, sought more than $2 billion in aid from New York State and the United States government, and has asked municipal unions for savings including sharing medical insurance costs, longer work hours and more flexible work rules. Bloomberg recently said he would lay off 3,400 city workers in a month's time.

Representatives of the Turkish, Indian, and the Philippine consulates in New York, and the Mongolian mission to the United Nations did not have an immediate comment, a Bloomberg report said.