Gov. Kristi Noem has vetoed a bill allowing local governments to increase the hotel occupancy tax.
House Bill 1109 increased the maximum tax on hotel rooms in business improvement districts from $2 per room to $4 per room, or four percent of the rented room charge.
Noem said she vetoed it because it “significantly raises taxes.”
"The occupation tax is not just paid by out-of-state travelers. This legislation would raise taxes on South Dakotans," Noem said in her veto letter. "South Dakota residents are traveling every day for businesses, medical visits, youth activities, weddings - the list goes on. South Dakotans vacation in South Dakota as well."
Proponents said the bill helped communities that have few options to raise money, and that the funds raised by the tax could pay for community and business development projects.
The bill passed by only three votes in the Senate, well short of the two-thirds majority needed to override the veto.
It’s Noem’s first veto of the 2023 legislative session.
