It’s Your Money: Company uncovers $140K in unpaid business license fees

It's Your Money: NMB Undercover Businesses

MYRTLE BEACH, SC (WMBF) - One year after North Myrtle Beach contracted with Nustrat, an analytic consulting company, the city said it gained an additional $100,000 from business license fees.

North Myrtle Beach signed a contract with the company last February to help identify businesses and people operating without a business license.

The nationwide company markets its abilities to “identify new revenue sources and facilitate compliance without hiring additional staff.”

City spokesperson Pat Dowling explained this service goes beyond locating a specific storefront but instead helps uncover different layers involved with a business.

“There’s also different levels of LLCs where somebody leases some land to company A and they lease it to company B who leases it to a new retail store,” Dowling explained. “The retail store generally comes right in and gets their business license and all the people who are doing the leasing and subleasing very rarely come in.”

He said Nustrat is particularly helpful in identifying short-term rentals, suppliers and subleases who are operating without a license and may not know they need one.

“We’re not after these companies in terms of taking them to court or anything,” Dowling said, “We’re just after them to notify them that they really do need a business license in the city of North Myrtle Beach.”

The contract doesn’t cost taxpayers anything because Nustrat is awarded 38% of all the fees, penalties and taxes associated with businesses license violators it locates, according to the city’s contract.

Dowling said Nustrat uncovered $140,000 in the last year. The city kept $100,000 and the company kept the rest.

“Next year when we renew all the licenses, all the $140,000 will come to us,” Dowling explained.

Dowling said the city has always known these sub-levels of business operate without licenses but didn’t have the staff or expertise to track them all down.

“Rather than spending five years learning ourselves and using taxpayer money to pay for new employees this is the better way to do it,” Dowling said of the city’s partnership with Nustrat.

The city also has three business license inspectors on staff.

North Myrtle Beach estimates it will generate $7.6 million from business license fees in the upcoming year. According to the city budget, business license fees generated $6.7 million in 2018 and $7.3 million last fiscal year.

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