Whether it's a fee or tax, hotel increase not veto proof

Senate approves increase for hotel rooms; backers say state should leverage tourist dollars

Get ready to pay more for a hotel room in much of South Dakota.

The state Senate has narrowly approved a measure that would allow business improvement districts in the state to more than double the per-room fee that the districts, known as BIDs, can charge.

State law allows municipalities to establish BIDs within defined areas. 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.

House Bill 1109 allows BIDs to increase that charge to $4 a night. Or, in the alternative, it offers districts the ability to charge 4 percent of a rented room charge. A $200 a night room would include an $8 BID charge, as well as other taxes, for districts that chose the 4 percent option.

The proposal divided the Senate Thursday, and it passed by a slim 19-16 majority. The opposition to the bill could prove significant if Gov. Kristi Noem vetoes the measure. Overriding the governor would require a two-thirds majority.

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