Originally Posted by
sethb
There are cities where hotel taxes are something like 10% + $1.25/night. You'll pay the $1.25, because that's a fixed amount. 10% of the cash portion of an all-point stay is $0.
This is accurate, but I would say the HGP response was incomplete and confusing.
The taxes one would primarily be concerned about are a VAT or sales tax, calculated as a percentage of the room rate, and those are not assessed on award stays.
Some cities also have a fixed hotel tax, and that may get passed through. I was assessed one in Budapest, for example. It was a trivial amount.