South Carolina Business Licensing Officials Association JOINT ANNUAL ACADEMY Hilton Head Marriot October 13-16, 2015 Breakout Session Topic: Liens, Assessments, and Summonses: How to Use Them Presented by: Barbara Wooster, ABL, Revenue Collector, Town of Hilton Head Island (843) 341-4611 What are some issues facing License Inspectors and what tools are available? Operating without a Business License Delinquent Penalties Delinquent Taxes Uniform Ordinance Summons • Audits • Assessments • October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 1
Verify your Town Ordinance before implementing enforcement options ! Business License Ordinance Sections: • Sec. 10-1-10. License required: Every person engaged or intending to engage in any calling, business, occupation or profession in whole or in part, within the limits of the town (Ord. No. 83-5, 9- 26-83) • Sec. 10-1-20. Definitions: (1) Business: ..…an individual shall be deemed to be in “business” if that individual owns and rents more than one (1) residential unit within the Town. This applies to both short-term and long-term rentals October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 2
Sec. 10-1-120. - Delinquent license fees. For nonpayment of all or any part of the correct license fee, the license inspector shall levy and collect a late penalty of five (5) percent of the unpaid fee for each month or portion thereof after the due date until paid. If any license fee shall remain unpaid for sixty (60) days after its due date, the license inspector shall issue an execution which shall constitute a lien upon the property of the licensee for the tax, penalties and costs of collection , and he shall proceed to collect in the same manner as prescribed by law for the collection of other taxes . (Ord. No. 83-5, 9-26-83; Ord. No. 94-28, § 8, 10-18-94; Ord. No. 04-19, § 1, 4-20-04) Types of Enforcement • Field Inspections • Notice of Violations • Town Municipal Summonses • Administrative • Audits • Assessments • Liens Depending on personnel, municipalities offer varying types of enforcement supported by the guidelines offered within the business license handbook and your municipality’s business license ordinance. We must afford equal protection for all businesses. Notice of Violation October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 3
Uniform Ordinance Summons Issuance of Town Summonses Results in court date Owner must go before the Municipal Judge Burden of Proof is on Municipality Once a case is presented before Municipal Court, there is a permanent record Civil Penalties State Law does not specifically mention civil penalties for unpaid license taxes, but it is generally accepted that penalties may be imposed. Delinquent fees are a form of civil penalty which are widely used. Civil penalties that accrue monthly for unpaid business license taxes provide a strong incentive for prompt payment . October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 4
Criminal Penalties Ordinance Summons: A municipality may adopt an ordinance which authorizes either law enforcement OR a code enforcement officer to issue a uniform ordinance summons for violation of the business license ordinance. The summons allows a magistrate or judge to determine the disposition or outcome of the case. Step 1- Formal Audit Request What are our options if no response? October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 5
Remember to be sure your Town Ordinance is broadened to give you authority to assess license fees and penalties and to execute liens-Be sure there are procedures in place for Appeal of Assessment in case an appeal is heard When is an assessment appropriate? • When no license is obtained or renewed • When audit is requested but information not provided by business • Information is insufficient or unavailable See Section 11 of the 2014 MASC Model Ordinance EXAMPLES OF TOOLS TO CALCULATE ASSESSMENT • State sales tax report • Comparable business/property in area • Websites: – Sales Fuel – Manta – Defense Spending.org – VRBO Listings – Homeaway October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 6
Step 2-Notice of Assessment Be sure to keep all documentation October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 7
ASSESSMENT FORMS SAMPLE APPEAL OF October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 8
Items to remember per Section 11 of the 2014 MASC Model Ordinance: Be sure to send the ‘Notice of Assessment’ by certified mail or personal service An application for adjustment of the assessment may be made to the License Official within (5) days after the notice is mailed or personally served or the assessment will become final. Final assessment may be appealed to the Council only by payment in FULL within (5) days and the filing of written notice of appeal within (10) days after payment pursuant to the provisions of this ordinance relating to appeals to Council NOW WHAT CAN WE DO? LIENS • Though this is NOT SPECIFICALLY GRANTED BY STATE STATUTE, some municipalities may find this useful. • Be sure to exhaust all other collection tools prior to considering placing liens. October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 9
What does the Business License Handbook say about Liens ? Part 5-Enforcement: ‘A right to place a lien on property for collecting a business license tax and penalties is not specifically granted by statute. This provision is sometimes included on the generally accepted theory that the power to levy a tax carries with it the power to collect in the normal manner, but enforcement by a court is doubtful. The Municipal Association of SC Model Business License Ordinance does not provide for a lien.’ THE MASC MODEL BUSINESS LICENSE ORDINANCE DOES NOT SPECIFICALLY PROVIDE FOR A LIEN Where to find the property information required for lien? October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 10
STEP 3 SAMPLE LIEN REQUEST October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 11
Final Lien Payoff Calculations SAMPLE LIEN SATISFACTION October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 12
October 16, 2015 SC BLOA JOINT ACADEMY-Breakout Session Barbara Wooster, Revenue Collector Town of Hilton Head Island 13
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