Rincon wins tax suit

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SACRAMENTO, Calif. - A San Diego federal judge ruled in favor of the Rincon
Band of Mission Indians, which had filed a lawsuit in a tax dispute case
with San Diego County.

At issue was whether the county could tax a corporation, not affiliated
with the tribe, that operates on Indian land. The county had argued that it
was not trying to tax an Indian tribe but rather a taxable corporation, in
this case Nevada-based Harrah's Entertainment, Inc.

Essentially the lawsuit stops San Diego County Treasurer Dan McAllister,
whose office is in charge of tax collection, from collecting taxes on
Harrah's Rincon Resort and Casino.

Federal District Court Judge Marilyn Huff's ruling was not immediately
available because it was issued orally. She is expected to issue a written
ruling in the next few weeks.

John Fredericks III, a Colorado-based attorney specializing in federal
Indian law, dismissed press speculation that this was a precedent-setting
case.

"The judge issued a narrow ruling and the only place where it sets a
precedent is in San Diego County," said Fredericks, adding that the ruling
was tied to a local tax ordinance.

Though Rincon Chairman John Currier was not immediately available for
comment, he was quoted in a San Diego Union Tribune story as saying he was
"ecstatic" about the ruling and that it was a "waste of tribal funds" that
could have been directed elsewhere in Rincon tribal operations.

McAllister said that hotels in unincorporated areas of the county are
typically taxed per occupancy and when Harrah's opened their casino at
Rincon, he believed they were subject to the same tax.

"We said it was a commercial hotel on commercial property," said
McAllister.

McAllister said that tax notices he sent shortly after the casino and
hotel's opening in 2002 "went unheeded," and that after several months of
"very little communication" the tribe sued his office last summer.

Fredericks said that this tax case differed significantly from the Supreme
Court's recent City of Sherrill v. Oneida Indian Nation of N.Y. decision,
which also involved taxation of tribal properties. That dispute pitted the
Oneida Nation of New York, owners of Indian Country Today's parent company
Four Directions Media, against the neighboring city of Sherrill. In that
case, the court ruled that the city could tax the Oneidas on acquired
properties, whereas the enterprise in dispute at Rincon lies on federal
trust land.