That may be correct, but it doesn't make the state's actions and the court's ruling in this case correct. In New York, the state sales tax is also assessed on the purchaser instead of the product -- which means that according to the letter of the law, a person who goes to New Jersey to purchase something and brings it back into New York must pay the New York sales tax on the product.
However, this does not mean that the state of New York has any authority to collect the tax in New Jersey. During New York City's last fiscal crisis they actually sent tax agents to the parking lots of New Jersey shopping malls to record license plates of customers from New York. The initiative came to a screeching halt when the New Jersey retailers ordered their security personnel to treat the New York tax authorities as criminals and have them arrested for trespassing, stalking, etc. -- because they had no legal authority to do this kind of thing outside the State of New York.
Good analysis. For the reasons you cite, NYS can't make the Oneida's, for example, collect taxes for the greedy, blood sucking pigs in Albany, on goods sold on the reservation, which is a sovereign nation under both Fed and State law, any more than NYS can force other states to collect sales tax on its behalf. (BTW, when the state requires me as a business owner to collect taxes on its behalf, isn't the state depriving me of a property interest -- my time and labor -- without just compensation?)