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Committee weighs business-license verification, sampling and short-term rental reporting
Summary
Staff proposed a revenue-assurance plan that would require businesses to supply documentation (P&L, tax returns, 1099s, sales tax returns or CPA letters) and perform sample testing on a subset of businesses; members discussed timing, staffing and limitations of tax forms for verification.
Staff member (S5) presented a multi-part approach to business-license revenue assurance that includes benchmarking with other municipalities, a menu of acceptable verification documents and sample testing. S5 said a comparable municipality sampled about 22 businesses and recommended documents such as profit-and-loss statements, federal or state returns, 1099s, accounting reports, South Carolina sales-tax returns, notarized CPA letters and rental platform reports for short-term rentals.
Committee members discussed implementing the verification prospectively for new applicants once council approves, while conducting discrete audits or sample testing for existing licensees. Committee member (S2) cautioned that state tax returns are derived from federal taxable income and may not reflect gross receipts; members agreed sales-tax returns can be a useful benchmark for retail businesses but have limits for service providers and rentals. Staff will prepare a structured list of acceptable documents, a timeline for implementation, and an estimated staffing/cost impact for the next meeting and Ways and Means.
