Clinton's NY policy reversal benefits India; leaves Mayor fuming

WASHINGTON: In a decision that would immediately save India about USD 40 million, US Secretary of State Hillary Clinton has reversed a housing policy exempting diplomatic residences in New York City from paying property tax.

The New York City, which last year had won a prolonged court battle against India and Mongolia in the US Supreme Court, was pressing these two countries to pay their property tax dues amounting to about USD 46 million.

However, with the June 23 order of the Secretary of State, India and Mongolia now need not have to pay property tax on the residences of its diplomats in the New York City; so do those of other countries as well.

The decision has left the New York City Mayor, Michael Bloomberg, fuming who termed Clinton's decision as "unfair".

"They won't be paying taxes, but if you or I have a building [in the city], we pay taxes ... It is totally unfair," he said.

A State Department official said such a decision has been taken in the best interest of the US tax payers and its foreign policy.

If such an order would not have had passed, several countries were planning to take reciprocal actions, which would have resulted in the United States paying hundreds of millions of dollars, the official said.