European properties are actually tax inclusive since the VAT is always included in the price displayed. I believe this is also the case in Australia with their GST. However, where the tax is actually added after the base price, as in Mexico, New Zealand and Canada among other countries, there will be a visible tax charged, and thus the reason this boilerplate line appears on res bookings. However, in all these cases -- inclusive tax or tacked on -- awards are not generally subject to it, or at least the reward recipient.

(There are always going to be certain exceptions, and India can always be relied upon to present such exceptions. But even there, I think the Tax issue only applies on paid stays when you've been upgraded and the tax must be calculated on the rack rate, not what you originally paid. If you are upgraded on an award there, it will be ICH/PC that pays the additional tax. This is somewhat like upgrading a flight to the UK where some airlines do charge the higher rate of entry tax that the UK charges based on class of service when using points or certs from a coach fare, while others don't.)