Reservations are considered sovereign states. I think. Similar to the way military bases are treated in foreign countries. The US bases in Germany are essentially little slices of USA beholden only to federal law and the whims of the Department of Defense. Reservations are little slices of whatever Native American nation lives on them (choctaw, iroquois etc). Please check somewhere else first before believing that totatlly; may have my facts wrong
That said, I think taxes on cigarettes are ridiculous. They always hit hardest those who have the least to spare. Since the tax remains the same no matter the income level of the buyer, those with a lower income pay a higher percentage of that income in cigarette tax. And sales tax. And damn near every other tax except payroll.
I wish more states would get rid of sales tax completely and rely more on income tax since it is easier to make a graduated income tax.
Wish that rants like that would actually help. If they did, we might live in a perfect world by now. :P