License plates came into existence in the early 1900s in Massachusetts when they needed a way to tax people to repair and maintain their roadways, and vehicle registration was the way they decided to accomplish it. It was also proposed as a way of linking drivers with actions, as there was a rapid increase in the number of roadway accidents about that time.
The French had them long before that (in fact they had them before the automobile). But I suspect you are right: it was tax to maintain the roads that required each automobile to be numbered and registered.
http://www.mass.gov/rmv/history/