Mayor Bloomberg and Senator Schumer, big backers of the idea that the United Nations is good for New York, might set aside some time in April for the Supreme Court hearing in the case against the city the nine have just decided to review. The case is being brought by India and Mongolia over $18 million in taxes the city says it is owed in connection with non-tax-exempt uses to which their U.N. missions are being put. The two countries are asserting not simply that they don’t owe the city taxes but that no court has the jurisdiction to rule on any lawsuit that the city brings against them. Or, to put it more broadly, the People’s Republic of Mongolia is trying to jeopardize the authority of New York City to sue any foreign country over local taxes.

Now it is true that the properties used by foreign missions to the United Nations. are generally exempt from taxation. But the exemption lasts only so long as a property is being used for diplomatic purposes or to house an ambassador. According to the city’s tax assessors, Mongolia and India are using most of their buildings’ square footage for other purposes. According to the city, the top 20 floors of the 26-floor Indian Mission at East 43rd Street are home to 16 diplomatic employees and their families, including a driver and security guards. A similar arrangement can be found at the Mongolian Mission at East 77th Street.

The Supreme Court will not be deciding whether Mongolia and India must pay those taxes. It will be deciding whether local courts even have jurisdiction to hear such tax cases against foreign countries. Both Mongolia and India claim that they are protected against the city’s tax collectors. That argument didn’t find a receptive audience before the riders of the 2nd United States appeals circuit. The “guiding principle,” its three-judge panel decided, is that “when owning property here, a foreign state must follow the same rules as everyone else.”

If the Supreme Court were to agree with Mongolia and India, other diplomatic missions would have little incentive to use their buildings for only conducting diplomacy. Or to pay any taxes that the city assesses. The Supreme Court may have taken the case because a discrepancy existed in the lower courts. In a tax case involving Libyan property in Englewood, N.J., a federal court ruled that local governments lacked jurisdiction for a tax claim. Mongolia and India, which are being represented against our city by the New York office of Kaye Scholer LLP, summed up the significance of that split. It said ” … the side of the Hudson River on which a foreign state locates a diplomatic mission now determines whether that foreign state’s diplomatic mission is subject to local real estate tax litigation.” Maybe Messrs. Bloomberg and Schumer could get together with their pal Governor Corzine and agree to move the United Nations to Newark.