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Because the state doesnt collect sales taxes on Indian land, cigarettes bought there can cost less than half of what they do in New York City, which has the nations highest tobacco taxes

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Over-the-road smuggling occurs when bulk cigarettes are purchased legally in low-tax states and shipped to higher-tax states, where the cigarettes may or may not receive counterfeit stamps and then sold in legal markets.[] Our empirical model controls only for over-the-road smuggling, as has been common in the literature, with the exception of Thursby and Thursby (2000)