South Dakota Gov. Noem vetoes hotel tax increase

HB-1109 would double amount Business Improvement Districts could collect

Gov. Kristi Noem used a modified branding iron to stamp House Bill 1109 with her veto Thursday. (Photo courtesy of Governor’s Office)

Gov. Kristi Noem will not put her signature on legislation that would increases a tourism tax on some hotel stays in South Dakota.

The governor’s office announced Thursday that House Bill 1109 has been vetoed. The measure would have doubled the amount local jurisdictions can collect from hotel stays.

Backers of the bill say the increased tourism tax — also described as a fee — is necessary for South Dakota’s visitors industry to keep up in a competitive marketing environment.

But Noem is not convinced.

“Proponents also made the argument that cities in other states are charging these higher taxes. That shouldn’t dictate what we do in South Dakota,” the governor wrote in a formal letter alerting the Legislature of her veto. “When South Dakota competes on tax rates, we should compete to be lower — not higher.”

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