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The Supreme Court on Tuesday grappled with a case that sounds local but has the makings of an international incident: whether the city of New York can take the nations of India and Mongolia to federal court in a dispute over property taxes.

At stake in the case Permanent Mission of India to the United Nations v. The City of New York is more than $18 million in back taxes the city claims it is owed for the portions of the countries’ U.N. mission buildings that house employees. It is undisputed that the missions themselves are untaxable under international treaties, but the city claims that 20 residential floors of India’s 26-floor mission and the top half of Mongolia’s six-floor mission are subject to tax because they are used for staff housing, not diplomatic purposes.

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