The main purpose of this research is to analyze the differences of the cross-strait local tax system in view of the political structure, economic development and the system of land ownership. The Local Taxation of PRC comes from industrial and commercial taxes including business tax, value added tax and income tax of business; while the local taxation of ROC comes from landing taxation including land value tax, land value increment tax and house tax. In 1992, the land value increment tax accounts for 71% because of the economic boom in ROC. This research uses the method of comparative economic systems to discuss the effect of Local taxation system with regard to the economical and non-economical factors from four aspects such as economic structure, tax policy , politics, and property right system. Before 1978, PRC paid much attention to state-owned enterprise¡]SOE¡^because of the planned economy. But the economic structure changes extremely after 1978 because of lifting restraint of labor force , permission of the foreign investment and export promotion. Therefore, PRC established the levied taxes system on foreigners in 1980 and substitution of tax payment for profit delivery of SOEs in 1983 and 1984. In order to fit the development of economy, PRC reformed the system of tax distribution in 1994. The system of tax distribution has classified the Central taxes and Local taxes and sharing taxes. There are 13 independent taxes and 8 sharing taxes of the current Local tax system . ROC has set Local tax system since 1951. According to the Law Governing the Allocation of Government Revenue and Expenditures as amended and promulgated in 1999, current taxes are classified National taxes and Local taxes. There were 4 taxes was repealled in the last decades, inculding household tax, slaughter tax, banquet tax, and business vehicles license tax and stopped imposing on agricultural land tax. Because of abridging the Taiwan-Province in 1999, the Law Governing the Allocation of Government Revenue and Expenditures has amended and the Local tax system has increased to 9 taxes. The business tax(vat) of Taiwan-Province has become National taxes, while vehicle license tax and stamp tax have become local taxes.