Advice in Italy

How often would you make a single purchase of more than 999euro??

I have 5 tours lines up and already paid for. Thanks for the reminder to check before leaving, will put on my calendar. OP probably wanted to pay for his hotels in cash I imagine.

The 999 Euro limit just means that you pay hotels with your credit card vs. cash. We had the same limit in Switzerland last year. When I asked at our hotel (where I saw the sign) if they needed to be paid in cash, they were surprised and said credit cards were the norm. In other words, places of business do not want a large quantity of paper money handed to them.

If a hotel prefers or requires cash, they will tell you so in advance, and so will hotel listings in Rick's guidebooks. Otherwise, I usually do default to using my credit card for larger payments. We don't recommend exchanging a lot of euros before you leave home, since ATMs and credit cards give you a better average exchange rate as you go. In those cases where a hotel does require cash, it can mean planning ahead to visit the cash machine on more than one day, depending on the daily withdrawal limit that your bank allows. (You can request to have this limit raised before you leave home.) See also http://www.ricksteves.com/travel-tips/money.

Yes that limit is imposed by tax laws, but I have never made a payment of that magnitude in cash in Italy (at least not related to travel). Credit cards are widely accepted everywhere. Italians don't use them as much for small purchases under 50€ but 1,000€ is way above the norm for a cash payment, unless tax avoidance is the objective.

We stayed for 7 nights in Florence, and no, I have never seen that exclusion mentioned before. We had attempted to allocate sufficient euros since many of the places Rick suggests prefer and even discount cash payment. We had just assumed that was accepted practice, and in no way had any idea or attempt at tax avoidance. Apparently many have not, as we, stayed at one location a sufficient time for that to be an issue in our 3 previous trips to Italy.

Well this makes me a bit confused. The Agriturismo where we will be staying for the week requires payment in cash and the total bill will be 1600 Euros.

Yeah, me, too ksb 1949. Our total hotel bill in Venice will be in that same neighborhood. I agree; it is very confusing. I had no idea about the Italian tax laws. So I guess we pay daily? Like your bill, our lump sum is definitely going to be over the limit

If you pay the hotel in cash over 1000 euro, that is against the law. The law is article 49 of Legislative Decree 231/2007.

It is also against the law if you artificially break up the payment of over 1000 euro into 2 separate cash payments that together amount to over 1000 euro.
So if you pay 1,500 euro with two payments, one for 800 euro one day and 700 euro the next day, since they refer to the same transaction, you are still in violation of the law.
This circumstance was clarified by Ministerial Circular no. 4154 of 16 January 2012 from the Ministry of Finance and was previously upheld by the Supreme Court of Cassation in the decision no. 15103 of 22 June 2010.

You can break up the payment between a cash payment under Euro 999.99 and a traceable payment for the remainder. Traceable payment could be via bank transfer, credit card, debit card, check, etc.

EDIT:

There is an exception to the law. Art. 3, comma 1 of Legislative Decree no. 16/2012 set forth that is if the person making a payment is a non EU citizen residing outside of the EU the cash payment can be over 1,000 Euro (up to 15,000 euro).
However in that case they need to make a photocopy of your passport and you need to sign an affidavit that you are not a resident of the EU. They also need to make photocopy of the invoice/receipt. All of the above must be given to the bank where they deposit your money, and the money must be deposited within one business day.

They made this change at the request of the hotel lobby, they say to accommodate the Russian tourists, who apparently like to pay with large wads of cash. So the most 'tax' honest people on Earth, Italians and Russians, working together for the good of tourism.

I would also suggest if you haven't book air tickets yet I would fly to Milan instead of Rome. I feel Rome is a complete mess right now since the fire.

We flew into Rome the week after the fire. We were shuttled into the area for passport control. The guy didn't even bother to look at our passports, he just waved us through. So we really didn't have any issues due to the fire.