Taxes may certainly be payable on reward bookings if the city or country levies a tourist tax on hotel guests. It happens often in Europe, but some hotels absorb the tax themselves from the money they get from IHG, and some charge it to the guest.

I posted about this before but the Holiday Inn Berlin West made me pay €3 on reward nights based on a 5% tax rate and nominal €60 value of a reward night. No other Berlin hotels made me pay anything on reward nights. I did a chargeback and Amex may have just given me the money without charging the hotel.