Hotels have taxes on rates, which do not get calculated on an award night because there is no rate paid. HOWEVER, some jurisidictions have occupancy surcharges or fees (particularly in environmentally sensitive areas). Sometimes they are called a "tourist tax". And are separate. And usually get charged. MOREOVER, a resort will sometimes have a daily resort fee. Which does not always get waived on an award stay.

But the hotel booking has to state in the rate details which taxes may be applicable.