Function

• Land and property is taxed in order to raise money for counties, cities, towns and school districts. The money collected is dispersed in order to make sure that schools are adequately funded, as well as to pay for police and fire departments. In addition, property and land taxation money is used to keep roads repaired and to provide funding for other municipal services. Different states have different ideas of what constitutes land and property that can be taxed. New York, for example, does not tax personal property, while states such as Missouri collect taxes on personal properties, including manufactured homes and cars.
  
  

Determination

• The tax is usually determined by the county assessment of the value of the land or property and by the particular tax rate of whichever tax jurisdiction the parcel is located. A tax assessor puts a value on the land and then subtracts any particular property tax exemptions that can be used. Commercial land is assessed at a higher value than non-commercial land, since commercial land can bring in more revenue once developed.
  
  

Productivity Value

• Land and property are typically assessed based on the size of the property and what similar areas of land appraise at. In addition, places like South Dakota have put forth taxation rules on the "productivity value" of a property. This means that unused land is taxed at a portion of the rate of land that is being used productively.
  
  

Local Economics

• When an economy is going strong, land and property taxation can support the various avenues that require funding in a jurisdiction. When an economy is not strong, this can lead to property values going down. When those values go down, the amount of revenue raised through taxation also declines. When property values drop, this can lead to massive budget shortfalls in important areas, such as maintaining adequate fire and police departments. When that happens, counties will try alternative ways to bring more revenue into the system, such as instituting a "driveway tax" for church properties, which charges the church for the amount of vehicle traffic generated by church attendance.