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Taxation of tobacco is a widely-used strategy that prompts smoking cessation among adults and reduces cigarette consumption among continuing smokers. Registered Indian tobacco use prevalence is at least double that of the rest of Canadians and is in part due to the lower cost of tobacco products purchased on reserve by Registered Indians (RIs) as they are tax exempt. Although registered Indian communities have the ability to collect tax on tobacco products and direct the use of these revenues, this strategy is rarely utilized. Tobacco taxation could have substantial health and economic benefits to RI communities, but perhaps is not culturally-appropriate. In order to better support RI communities, governments and other organizations need to examine this policy instrument in the context of RI populations.