The California Court of Appeals has ruled that Angelina Mike, a Twenty-Nine Palms Band of Mission Indians member, is obligated to pay state income tax on more than $345,000 she received from gaming operations at Spotlight 29 Casino.

The Fourth District appellate court decision, affirming the ruling of San Diego County Superior Court Judge Richard Strauss, said Mike was living on another tribe's reservation in 2000 when she got the per-capita distribution.

Had Mike been living on the Twenty-Nine Palms' 240-acre section of land, California would have been barred from collecting taxes on income derived from the tribe's reservation, the court ruled.

Mike's attorney, Richard Freeman, said the March 5 decision will be appealed.

“I think they're absolutely wrong,'' Freeman said. “I think the Supreme Court is going to be the tribunal that is going to have to decide this issue.”

Freeman said the tax exemption should apply, as Mike, then 18, was living in “Indian Country,'' land that makes up the Agua Caliente Band of Cahuilla Indian reservation.

The Agua Caliente reservation takes up a significant portion of the Palm Springs area, and is a mid-point between the Twenty-Nine Palms reservation land parcels where Spotlight 29 Casino, its parking lot and sanitation plant sets, and an undeveloped stretch in the high desert that has no utilities.

Years ago, the high desert site was eyed for a second casino of the Twenty-Nine Palms Band.

“The law is if you live in Indian Country, and you're an Indian and you derive all the income from your tribe, on your tribe's land, you are supposed to be tax exempt,'' Freeman said.

The Franchise Tax Board contended that the exemption applies only when the taxpayer lives on the tribal lands of his or her own tribe.

The Court of Appeal, saying in the March 5 finding that the matter falls into a narrow space of “decisional law that has produced conflicting decisions by other courts, sided with the Franchise Tax Board.

It found that Mike could not be a “de facto” member of the Agua Caliente tribe to claim the income tax exemption.

It ruled there is a rational basis for treating Indians who have left their own tribe's reservation like all other taxpayers in California. For most practical purposes, those Indians are on the same footing as non-Indians who live on the reservation, the court decision said.

Cheryl Schmit, director of Stand Up for California, a grassroots group that favors increased government regulation of tribal gaming, said the case is germane because of the close proximity of tribal reservations in the Coachella Valley and close ties among tribes across Southern California.

It also carries across the land, as a tribe in Oklahoma who has lived on fee land not held in trust has tried to make an “Indian Country” claim for exemption of taxes, Schmit said. “I think this case is going to end up to be a strong issue for states to stand on,'' she said.