9.29. Fight those who believe not in God nor the Last Day, nor hold that forbidden which hath been forbidden by God and His Messenger, nor acknowledge the religion of Truth, (even if they are) of the People of the Book, until they pay the Jizya with willing submission, and feel themselves subdued.
Commentators disagree on the definition and derivation of the word jizya:
Yusuf Ali states "The derived meaning, which became the technical meaning, was a poll-tax levied from those who did not accept Islam, but were willing to live under the protection of Islam, and were thus tacitly willing to submit to the laws enforced by the Muslim State."
Monqiz As-Saqqar attributes the word jizya to the root word jaza meaning "compensate" and defines it as "a sum of money given in return for protection".
Ibn Al-Mutaraz derives the word from 'idjză, meaning "substitute" or "sufficiency" because "it suffices as a substitute for the dhimmi's embracement of Islam."
Yusuf al-Qaradawi says the word jizya is derived from the jazaa', meaning "reward", "return", or "compensation", and defines it as "a payment by the non-Muslim according to an agreement signed with the Muslim state".
Edward William Lane, in An Arabic-English Lexicon defines jizya as a "tax that is taken from the free non-Muslim subjects of a Muslim government whereby they ratify the compact that assures them protection.
Ibn Rushd explains that jizya is in fact a broader concept than just a head-tax. It also includes monies exacted in times of war – what is normally understood in English by the word ‘tribute’ – as well as levies (‘ushr) on non-mulsim merchants who are trading in the Dar al-Harb.
So here we see Jizya means compensation or reward. Its hard to see how tax fit into this. Plus there is no evidence from the Quran that Jizya is monetary. It simply means a compensation or a reward for something. Jizya linguistically could mean reward, compensation or substitute. So what do the Sects claim about Jizya?
Jizya is mentioned a number of times in the hadith. Common themes across multiple hadith (and often multiple collections of hadith) include Muhammad ordering his military commanders to fight non-Muslims until they accepted Islam or paid the jizya, Muhammad and a number of caliphs imposing jizya on various peoples, and the eventual abolition of jizya by Jesus' Second Coming.
 Sahih BukhariSahih Bukhari Volume 2, Book 23, Number 475 states 'Umar's concern for the well-being of dhimmis on his deathbed (after he was stabbed by a dhimmi). 'Umar commanded his would-be successor to "abide by the rules and regulations concerning the Dhimmis (protectees) of Allah and His Apostle, to fulfill their contracts completely and fight for them and not to tax (overburden) them beyond their capabilities".
Volume 2, Book 24, Number 559 states that the King of Aila wrote to Muhammad that his people agreed to pay the jizya tax in return for being allowed to stay in their place.
Volume 3, Book 34, Number 425 states that Jesus will abolish the jizya, as does Volume 4, Book 55, Number 657.
Volume 4, Book 53, Number 384 states that Umar did not take the jizya from the "Magian infidels" (Zoroastrians) until he heard testimony that Muhammad had taken the jizya from the Magians of Hajar.
Volume 4, Book 53, Number 385 states that Muhammad collected jizya from the people of Bahrain, as do Volume 5, Book 59, Number 351 and Volume 8, Book 76, Number 433.
Volume 4, Book 53, Number 386 states that Muhammad commanded Al-Mughira and his army to fight non-Muslims until they worshiped Allah alone or gave jizya.
Volume 4, Book 53, Number 404 has Muhammad stating that one day Allah will make the dhimmis "so daring that they will refuse to pay the Jizya they will be supposed to pay".
Volume 9, Book 83, Number 49 reports that Muhammad said: "Whoever killed a Mu'ahid (a person who is granted the pledge of protection by the Muslims) shall not smell the fragrance of Paradise though its fragrance can be smelt at a distance of forty years (of traveling)",
 Sahih MuslimSahih Muslim Book 1, Numbers 287 and 289 state that the "son of Mary" will "descend as a just judge" and, among other things, abolish the jizya.
Book 19, Number 4294 states that Muhammad commanded his military leaders to demand jizya from non-Muslims if they refused to accept Islam, and to fight them if they refused to pay.
Book 32, Number 6328 states that Hisham b. Hakim b. Hizam passed by Syrian farmers who had been detained for jizya and made to stand in the sun, and Number 6330 states that he came by some Nabateans who had been detained "in connection with the dues of jizya". In both cases his response was to quote Muhammad as saying "Allah would torment those persons who torment people in the world."
Book 42, Number 7065 states that that Muhammad collected jizya from the people of Bahrain. http://en.wikipedia.org/wiki/Jizya
Jizya is not about non Muslims. Many verses of the Quran came down in Medina where many Jews were and there are many conversations in the Quran regarding that. Jizya however came down only regarding the entering of Mecca. I believe it is a compensation for loss of property and business suffered by some of Muhammad's followers when they were forced to exile from mecca thereby losing their home. Some Quranist have said it could mean ransom for prisoners held by Muhammad and his followers, also regarding Meccan pagan and Meccan Jews.As for such who do not fight you on account of faith, or drive you forth from your homelands, God does not forbid you to show them kindness and to deal with them with equity, for God loves those who act equitably. God only forbids you to turn in friendship towards such as fight against you because of faith and drive you forth from your homelands or aid in driving you forth.
As for those from among you who turn towards them for alliance, it is they who are wrongdoers. 60:8-9
It also says:Permission (to fight) is given to those against whom war is being wrongfully waged
, and verily, God has indeed the power to aid them. Those who have been driven from their homelands in defiance of right
for no other reason than their saying, ‘Our Lord is God.’ 22:39-40
Some have said Jizya could mean some prisoner ransom of some sort such as regarding this verse of the Koran:
33,26. And those of the People of the Book who aided them - Allah did take them down from their strongholds and cast terror into their hearts. (So that) some ye slew, and some ye made prisoners
33.27. And He made you heirs of their lands, their houses, and their goods, and of a land which ye had not frequented (before). And Allah has power over all things
Its talking about those who aided the pagan Meccans. It has nothing to do with anybody else except the fighting parties. Jizya could mean some form of agrrement but only between parties who were at war.
9.13. Will ye not fight people who violated their oaths, plotted to expel the Messenger, and took the aggressive by being the first (to assault) you?
Do ye fear them? Nay, it is Allah Whom ye should more justly fear, if ye believe
The Koran forbade prophets for seeking any monetary rewards from the people unless its charity. Plus you can not conquer and then impose a tax claiming to defend and protect them. They never asked for you to conquer them in the first place. Conquering in the name of Islam by force is against the Koran anyways.