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This article studies the determinants of tax innovation in Spain's Common Regime Autonomous Communities (ACs) over the period 1986–2018, across the different types of taxes included in their "own taxes." Our central finding is that the introduction of taxes is motivated by politics: ACs governments introduce taxes when governed by left-wing parties or by a coalition government that included a regionalist party. Second, we find that parties in government follow a strategic calculus when introducing new taxes: an approaching election and a previously introduced tax decrease the chances of tax innovation. Third, we find that AC government also respond to functional pressures and introduce new taxes to shore-up their revenues when faced with a budget deficit. Two important negative results to come out of this analysis are that taxation innovation is not sensitive to geographical diffusion or to the availability of alternative source of revenue in the system of territorial financing. [ABSTRACT FROM AUTHOR]