A Sardinian tax regime which has left millionaires and yacht-owners groaning fell foul of the government on Friday.
The centre-left administration contested the so-called 'luxury taxes' levied on affluent visitors to the island, saying it had filed a suit with the Constitutional Court.
The government argued that the charges on super-yachts, holiday homes and private planes were "constitutionally illegitimate" because they conflicted with norms regulating central and regional tax systems and unfairly discriminated against some citizens - in this case, wealthy ones.
The controversial taxes are the brainchild of Sardinia's left-wing regional government chief Renato Soru, himself a billionaire.
Soru vowed on Friday to keep the taxes in place.
"I won't be backpedalling. These taxes are a modest contribution to help preserve and improve the environment of the island, particularly its coastal areas," said Soru, who made his money creating Italian internet service company Tiscali.
First introduced in 2006, the levies were greeted with dismay and indignation by a host of VIPs and glitterati for whom Sardinia is a summer playground.
Under the tax system, owners of yachts between 14m and 16m are required to pay 1,000 euros for mooring at any of the island's ports with a maximum of 15,000 euros levied on boats over 60m.
Boat owners are required to pay the tax in full, even for a one-day visit, within 24 hours of arriving on the island.
Taxes are also levied on all homes owned by non-residents built within three kilometres of the sea. The tax starts at 900 euros per year and rises in accordance with the size of the property.
Former premier and billionaire media magnate Silvio Berlusconi has had to fork out an estimated 54,000 euros in extra taxes for his 27-room luxury villa on the island's famed Emerald Coast.
Soru, who was elected in 2004, argues that the taxes will help conserve Sardinia's natural resources and will boost the flagging local economy.
"We want to preserve and protect the rare environmental and natural resources of our island's coastline. I think it's fair to ask those who benefit from these resources to contribute to their maintenance," Soru said when the taxes were first introduced.
But flamboyant millionaire playboy Flavio Briatore, one of the taxes' fiercest critics, says the extra charges are driving well-heeled tourists away from Sardinia.
The Renault Formula One team chief took out advertisements last year in several Italian dailies saying that rich people generated income for the island and it was wrong to target them.
"Wealth is not a crime... The luxury taxes will bring money and development to France, Greece, Spain and Croatia but definitely not to Sardinia," he said.
However, Briatore's analysis left the island's millionaire population divided.
Tom Barrack, a billionaire Californian real estate investor who owns a string of Emerald Coast resorts, agreed with Soru that affluent tourists were being asked to "pay a small price to enjoy and help preserve this island's unique beauty".
