The big banks are threatening High Court action over SA’s proposed bank tax.

The South Australian Government is attempting to impose a bank tax to raise $370 million over four years.

The tax plan has passed State Parliament's Lower House, but faces a big challenge in the Upper House, where several crossbenchers have indicated they will oppose it.

Australian Bankers' Association chief executive Anna Bligh said that if it passes, the banks will take the matter to the High Court.

“The major banks affected ... are deeply concerned about what this means for the South Australian economy, and they also have an obligation to look after the interests of their customers and shareholders,” she said.

“After speaking with legal advisors, the major banks have now resolved that should this pass the South Australian Parliament and be implemented, then it will be subject to a constitutional challenge in the High Court of Australia.

“[The major banks] will also make similar challenges, should other states or territories go down this path.”

Ms Bligh would not say what the legal basis of a High Court challenge would be, but insisted there were “sufficient grounds”.

“At this stage, the banks won't be showing their hand on specific parts of their legal advice,” she said.

“But they do understand there are sufficient grounds on which to mount a constitutional challenge and they've resolved that that is what they will do.”

South Australian Treasurer Tom Koutsantonis is confident the bank tax is legally sound.

“The reason they're puffing up their chest now is that they're worried about this tax being introduced in other jurisdictions,” he said.

“They're trying to frighten the other states into thinking this is unconstitutional.

“Our advice is that it is, our advice is that we're on very solid ground, our advice is that this legislation is valid and we hope it passes.

“The idea that a government wouldn't be allowed to pass its budget is ridiculous — of course it will pass.

“The Upper House will make its initial views known then I think they'll see the Government's view.”