In a 7-2 decision written by Justice Clarence Thomas, the high court said foreign governments can be taken to court over the taxes since "property ownership is not an inherently sovereign function."
The ruling came in a case brought by New York City against India's mission.
In another case Thursday, the court ruled unanimously that it is not a violation of the First Amendment for a state to bar a government employees' union from using the dues of non-union workers for political causes if those workers have not explicitly consented.
In a third case, the Supreme Court split 5-4 on whether federal appeals courts can consider an appeal after the time for filing a notice of appeal has expired.
Writing for the majority, Thomas said the courts do not have the authority to do so.