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In 1754, the British fought the French for the final of four wars in what we know as the French and Indian War. It was a fight to see who would rule in North America, and it was eventually won by the British. Despite their victory, the British were forced into debt, and their solution to get out of it involved one thing: taxing the colonies. This led to the formation of the Grenville Taxes. Two of these, the Quartering Act and the Stamp Tax, brought uproar from the colonists. The Quartering Act forced the colonists to house and feed British Soldiers with no additional money given to them. Many of the colonists didn't have the money to feed the soldiers, so it caused them to go into debt, which affected the financial side of the communities because the people were becoming so poor. After the Quartering Act, the British brought on the Stamp Tax. This was the first direct tax on the colonists, and it got them all riled up. A group known as the Sons of Liberty was formed and they led a boycott against the British taxing claiming that there should be "no taxation without representation". The tax changed the economics of the colonies, causing them to lose money rapidly, but the boycott came back in retaliation against the British. Because the British were no longer getting money from the colonists to pay off their debt, their finances were suffering, triggering the repeal of the tax.
The Sons of Liberty appealed to the king about the Stamp Tax, so the king repealed the tax using the Declaratory Act. This act still allowed the king to tax the colonies, and he made full use of that fact.
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