The taxman is, for common people, the face and grasping fist of the government.
A tax office is never a welcome sight, and adds slightly to the repression of the region where it is found. It does, however, allow for more efficient tax collection and aids in the recruitment of military units. It is a necessary evil for government: no matter what the national constitution may be, or the political beliefs of the ruling class, no government can do anything unless it has money.
Taxation has always been the most resented part of government. Tax collectors often had quite draconian powers, and could call upon the services of the military to encourage people to pay. This was often necessary, as taxes did not fall fairly on every part of the community: the poor often paid far more in relative and absolute terms, than the wealthy. The worst case was probably found in Spain, where the nobility, the landed gentry and the wealthy simply never bothered to pay taxes at all. The Napoleonic period also saw income tax levied for the first time in Great Britain in 1798. It was abolished in 1802, but governments tend to remember good ways of getting money out of the people!
The Tax Office is the most basic level of administrative building, providing a small bonus to repression in a region and slightly increasing tax income there. In addition, building a tax office in a region allows the recruitment of militia.
Tax Offices, and the administrative line of buildings in general, are the best building branch for maximizing the money made from any given region in the short term. They are best built in regions safe from outside threats (which may be better served with army or ordnance buildings, instead).
Like all other administrative buildings, the Tax Office's increase to tax income does not have a negative impact on public order, but it does increase the penalty on town wealth growth. Unless it is exempted from tax entirely, a region with a Tax Office has a slower wealth growth than a region without one. A region without an administrative building, on the other hand, can't exploit its taxable income as fully. In some cases, it may be worth delaying building an administrative building in a region until its wealth has built up somewhat, to increase income in the long run.
Requires an empty slot in a region capital. Costs 750 gold and takes 3 turns to build. Alternatively, it can be converted from another region capital building for the same cost and build time. Upgrading a tax office creates the Magistrate, which provides a higher bonus to taxable income, furthers the civil branch of the technology tree, and provides higher repression to its region.