From the New York Times:
Outsiders feeding their nicotine addiction: this is what keeps the Shinnecocks alive, said the owner, Lance Gumbs. He sat in the store explaining the history of the Shinnecock cigarette trade and how it is now being threatened by a federal lawsuit and by an expected push by a neighboring government, New York State, to end the longstanding practice of selling tax-free cigarettes to non-Indians on Indian reservations.[...]
Historically, New York State has not collected cigarette taxes from tribes within its borders because they are considered sovereign nations, so Indian-owned smoke shops have long sold cigarettes at far lower prices than non-Indian competitors.
Over the past 20 years, cigarette tax increases have drastically driven up retail prices, while reservation prices have remained relatively low. As a result, cigarette sales have become a booming business on the reservations, including those of the Shinnecocks on Eastern Long Island, and their neighbors, the Unkechaug nation.
Shinnecock and Unkechaug tribal leaders, who credit cigarette revenue with pulling their people out of a quicksand of unemployment, substance abuse and other ills, now fear losing their profitable niche as discount cigarette purveyors.
The article notes that New York State is going to attempt to collect sales tax from the wholesalers who sell to the nations. I can’t help but wonder if, given the money involved, the nations find a different supplier.
