Governments collect taxes to pay for various expenses that they incur for the benefit of people. Both central government and state governments collect taxes. State governments collect taxes in various forms such as municipal tax, property tax, professional tax, road tax, and local sales tax. The central government or the federal government on the other hand collects taxes like excise duty, central sales tax, and income tax.
Summary:
Here is an intro to direct and indirect taxes and an example of how to calculate them.