Noem’s hotel tax veto survives attempted legislative override

Measure sought to allow Business Improvement Districts to collect $4 on room rentals

(Kevin Angels / Unsplash.com)

PIERRE — Gov. Kristi Noem’s veto of a measure that would have allowed local hotel taxes to be hiked will stand.

Lawmakers backing the passage of House Bill 1109, which sought to raise the cap on a surcharge that Business Improvement Districts (BIDs) can collect from hotel room rentals, failed to get the two-thirds votes needed to override the governor’s veto in the House of Representatives Tuesday.

“No mater how you slice this … it’s still a tax,” said Rep. Mary Fitzgerald, a Lawrence County Republican, an ally of the governor and the state GOP vice-chairwoman. “This tax increase benefits private business. This tax increase does not benefit South Dakotans.”

NEWS: Sales tax cut last surviving relief option in South Dakota Legislature

State law allows municipalities to establish BIDs, which have additional taxing authority. For hotels, current law allows BIDs to charge up to $2 per night – a fee that can be used to promote tourism within the district.