The U.S. Supreme Court has rejected New York City’s bid to collect more than USD50 million from Mongolia and India in a dispute over unpaid property taxes on those countries’ missions to the United Nations. The justices left intact a federal appeals court ruling that threw out judgments the city had won against the two countries. The appeals court pointed to a 2009 State Department notice that said UN missions were exempt from local property taxes.

The city sought to tax the parts of foreign diplomatic missions used to house employees and their families. Mongolia’s mission occupies five floors on East 77th Street, with two used for employee housing.

A federal trial judge had awarded New York USD4.4 million against Mongolia. The figure would have grown with additional interest. After the trial court ruling, the State Department issued its notice. The New York-based 2nd U.S. Circuit Court of Appeals then reversed the judge’s decision, rejecting the city’s contention that the State Department lacked authority to pre-empt local tax laws.

New York sued India, Mongolia, Turkey and the Philippines to collect claimed taxes in 2003. Turkey and the Philippines settled with the city, agreeing to pay a total of USD12 million.