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.”

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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.