Mike

Plaintiff Angelina Mike is an American Indian and an enrolled member of the Twenty-Nine Palms Band of Mission Indians (the Tribe). She does not live on the Tribe’s reservation, but resides on the reservation of a different tribe. In 2000, Mike received a distribution from gaming operations conducted on the Tribe’s reservation (the income). The question is simply stated—may the State of California collect income taxes on the income? That question appears to be a matter of first impression in California, and requires us to navigate complex currents of decisional and statutory law.

Defendant Franchise Tax Board (FTB) concedes that, if Mike had lived within the boundaries of the Tribe’s reservation, the McClanahan exemption would bar California from collecting income taxes on the income derived from sources on the Tribe’s reservation. Conversely, Mike does not dispute that, if she resided in California outside the boundaries of any “Indian Country” (see fn. 5, post), there would be no bar to California taxing the income. This matter falls in an interstice of decisional law that has produced conflicting decisions by other courts: may a state impose income taxes on income…