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Senate sustains veto against Deadwood hotel tax

Associated Press Updated: March 12, 2014 at 4:31 pm 0

PIERRE, S.D. (AP) — The South Dakota Senate has voted to uphold the governor's veto against an increase to Deadwood's hotel tax on Wednesday.

Senators voted 16-19 to support the bill. But the bill's sponsor needed a two thirds vote from both chambers to override Gov. Dennis Daugaard's decision.

The bill would have allowed municipalities to tax $3 per night. The current rate is $2.

In a statement Tuesday, Daugaard said it would be a mistake to make it easier for local governments to raise taxes. The bill's sponsor, Sen. Bob Ewing, said the revenue would allow cities to promote tourism and benefit the whole state.

"It has the dirty little word of 'tax' in it," the Spearfish Republican said, asking for support in spite of that fact.

He said the tax increase came from the hotel and motel operators in Deadwood and it could bring in an additional $240,000 a year for marketing and promotions.

"Any help that we can give Deadwood at this time will greatly benefit it," Ewing said.

In his statement, the governor said that even though South Dakota has recovered from the recession it is not a good time to raise taxes.

"The property tax opt-out already allows local officials to raise additional tax revenues," said the statement.

The measure cannot be revived.

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