NEW YORK, NY June 15, 2007 —The US Supreme Court has ruled that New York City can use local courts to sue foreign countries for back property taxes. WNYC’s Fred Mogul has more.

Foreign countries are generally immune to lawsuits. There are some exceptions but until today, tax liens were not among them. The city argued that portions of Manhattan buildings owned by India and Mongolia should be subject to property tax because they were housing staff and not official business, which is exempt. The Supreme Court did not rule on whether taxes are owed. But the 7-to-2 majority said this sort of property issue would best be handled by the local courts.

India and Mongolia argued that a lien is a different kind of property issue. The U.S. Government argued on their behalf saying such conflicts should be resolved diplomatically. Unless the two sides settle, the current dispute will go to District Court in New York City. For WNYC, I’m Fred Mogul.

Officials at the India and Mongolia consulates could not be reached for comment.