(Luke 20:21-26)
The question that was asked of Jesus: "Is it right for us to pay taxes to Caesar or not?" was meant to entrap Him. However, Jesus took this opportunity to teach a powerful lesson: "As God's followers, we have legitimate obligations to both God and the government. But it is important to keep our priorities straight. When the two authorities conflict, our duty to God always must come before our duty to the government."
(Life Application Bible, Tyndale House Publishers, Inc. Wheaton, Illinois, and Zondervan Publishing House, Grand Rapids, Michigan, 1849.)

His questioner's thought that they had Jesus in a no-win situation because the poll tax that Rome had imposed was very unpopular amongst the Jews - in fact, accompanied by riots when it was imposed. (Acts 5:37). But if He openly opposed it, He would put Himself under suspicion of the Roman government and possibly be arrested as a rebel.

Once again, Jesus asked them a question: "Whose portrait and inscription is on it [the denarius]?" When they replied: "Caesar's," He told them to give to Caesar what is Caesar's and to God what is God's. They were unable to entrap Him and were astonished by his answer.
(Life Application Bible, Tyndale House Publishers, Inc. Wheaton, Illinois, and Zondervan Publishing House, Grand Rapids, Michigan, 1849.)

Hebrew Law and Custom

"From the very beginning of the Mosaic polity provision was made for the national income. Taxes, like all other things in that polity, had a religious origin and import." When the Jewish people were ruled by God alone (a theocracy), the only taxes paid were in the form of tithes and offerings.
(Unger, Merrill F. Unger's Bible Dictionary, Moody Press, Chicago, 1957, 1072.)

Economic factors

An enrollment in the public records of persons, together with their property and income, as the basis of a census, or valuation, was necessary to determine how much to tax each person. Two distinct registrations, or taxings, are mentioned in the book of Luke. The first was a result of the emperor Augustus, that "All the world should be taxed." The second, and more important, is associated with the revolt of Judas of Galilee.
(Unger, Merrill F. Unger's Bible Dictionary, Moody Press, Chicago, 1957, 1073.)

Digs and Documentary Evidence

"Nine hundred Roman coins in a glass urn were recently uncovered during salvage excavations in advance work on a highway junction between Caen and Bayeux in northern France. Made of a copper-silver alloy, the coins date to the third century AD."

Artifacts That Tie into the Scene

Denarius, plural denarii: The denarius is probably the most common Roman coin. It was first minted approximately 210 B.C. during the Second Punic War and continued to be minted into the 3rd century AD. The letter X was often imprinted on the denarii. The letter X stands for the Roman Numeral 10, in which case a denarius was equal to 10 "asses," but eventually it was changed to 16. At the beginning of the Roman Empire the denarius was more than 97 percent pure silver and weighed about 3.9g. By the end of the 3rd century AD the denarius was only 2-4 percent pure. The usual daily wage that a Roman soldier would receive was one denarius for a day's work.
(NIV Study Bible, Zondervan, Grand Rapids, 1985, notes on Matthew 20:2)

In New Testament times, on one side of the denarius was the portrait of the Emperor Tiberius and on the other an inscription in Latin: "Tiberius Caesar Augustus, son of the divine Augustus." The coin was issued by Caesar and was used for paying taxes to him.
(NIV Study Bible, Zondervan, Grand Rapids, 1985, notes on Matthew 22:19.)

Roman Rule

The Romans invaded Palestine under the leadership of Pompey in 63 B.C. Caius Julius Caesar Octavianus also known as Augustus ruled from 31 B.C. to 14 A.D., under whose leadership Jesus was born. Under Tiberius, the ruler after Augustus, occurred the ministry of John the Baptist and Jesus.
(Unger, Merrill F., Unger's Bible Dictionary, Moody Press, Chicago, 1957, 935-936.)

Caesar

A name taken by or given to all Roman Emperors after Julius Caesar. It was a title, comparable to Pharaoh, and usually applied to the emperors in the New Testament times.
(Unger, Merrill F., Unger's Bible Dictionary, Moody Press, Chicago, 1957, 160.)

Augustus

The imperial title assumed by Octavius, successor of Julius Caesar. He was born 63 B.C. Augustus ruled Palestine from 31 BC to 14 A.D.
(Unger, Merrill F., Unger's Bible Dictionary, Moody Press, Chicago, 1957, 108, 935.)

Tiberius

Tiberius ruled as emperor of Palestine from AD 14-37, during the ministry of John the Baptist and Jesus.
(Unger, Merrill F., Unger's Bible Dictionary, Moody Press, Chicago, 1957, 1094.)