What type of taxes do municipalities primarily rely on for revenue?

Municipalities primarily rely on property taxes as a significant source of revenue. Property taxes are levied on real estate and are a vital tool for local governments to fund essential services such as education, public safety, infrastructure maintenance, and other public services that directly benefit the community. This reliance stems from the fact that property taxes provide a stable and predictable revenue stream, as they are based on the assessed value of properties within the municipality.

While other options like sales and use taxes or income and estate taxes do contribute to government revenue, they are typically more prevalent at the state or federal levels rather than at the municipal level. Similarly, licensing and permit fees serve a purpose but do not generate the same consistent revenue as property taxes. Therefore, property taxes stand out as the predominant source of income for municipalities, ensuring they can sustain and support local needs effectively.