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For the SMS Auto-reply to work in the Workflow Builder do the Business SMS permissions need to remain enabled in the role for the user? I want to stop the users from being able to use SMS and send out auto-replies instead.

My apologies in the delay in responding. Yes, for a user’s automation to send SMS, the user you are sending on behalf of must have SMS sending abilities. 

There is a feature we are planning on in the future when new SMS APIs are made available that would allow an admin to send on behalf of any user in the organization. There is no set date for this update however.