We argue that historical reforms to the fiscal state can have a lasting impact on voluntary tax compliance and fiscal capacity development.  We substantiate our argument by examining the effect of historical Habsburg imperial rule on the current propensity to avoid taxation in contemporary northern Italy.  Our study employs several behavioral measures of tax avoidance -- at the individual and the municipal level.  We use spatial regression discontinuity designs to demonstrate that tax avoidance is lower among respondents from the formerly Habsburg side of the long-gone imperial border.  Investigating the channels that drive tax compliance, we provide evidence that beliefs about tax enforcement are no different, but proxies for tax morale are significantly higher on the Habsburg side of the historical border discontinuity.  We propose theoretical mechanisms for the historical persistence, which we also empirically examine.  Our study demonstrates that historically fostered tax morale has a long-run impact on tax compliance and fiscal capacity.