In addition to the sales tax, many states also have a use tax. A use tax is very similar to a sales tax and is imposed for the storage, use, or purchase of personal property which is not covered by the sales tax. Usually, it is applied to lease or rental transactions, or to major items purchased outside of the state, such as automobiles. The revenue from property taxes usually goes towards financing public services, such as public schools, police protection, and sanitation. The amount of tax to be paid is figured on the total value of the property or on a certain percentage of the value.
People usually pay property tax to the county, school district, local government, or water district.
It is, however, the state that establishes the guidelines under which local government can impose property taxes. Each of the 50 states have different definitions of property that is to be taxed. Some states allow local communities to tax real property. Real property consists of land and items that are permanently attached to the land. Examples of real property are homes, factories, wharves, and condominiums.