In order to effectively collect past-due license fees, it’s important that you follow the assessment process laid out by South Carolina State Law. This article lays out the process and provides a worksheet to make it easy to track if you have to track it by hand.
In a rush and just need a copy of the tracking worksheet?
What’s an Assessment?
The assessment Process is laid out in Act 176, the South Carolina business License Standardization Act. Before a municipality can take legal action to levy or close down a business for failing to renew their license, the assessment process must be followed.
An Assessment is the municipality’s best guess about how much revenue the business brought in and the resulting fee that should be paid. For example, if a business has been open for five years, and normally makes $35,000 each year, you could send them an assessment that stated they owe the municipality for license plus late fees on $35,000.
When Can I Start Sending Assessments?
While some municipalities continue to send delinquency letters first as a courtesy, assessments may be mailed instead as soon as the deadline of April 30th has passed.
How Do I Know What To Charge?
The state law doesn’t give guidance on how to assess the businesses, but it’s important that you provide a standard set of rules so businesses are treated equally. In GovPossible, we allow settings for:
- Minimum Assessment: If someone declared $100 on last year’s assessment or only paid for a partial year, the amount may not fairly reflect what they likely paid this year, so you can set a minimum amount for the assessment.
- Percent Uplift: Since we can reasonable assume that most businesses are trying to make more revenue than the prior year, the assessment could reflect an increase from the previous year’s revenue number.
We also automatically look back into prior years and charge on the highest previously declared revenue amount. These are all examples of ways you can set the assessment amount that either your software may allow for, or you can calculate by exporting your data into Excel. Each municipality should set criteria that best reflect their own community as long as they’re consistent.
What Should the Assessment Look Like?
The Act does not specify a format. However, it is important that the recipient understand their rights and what comes next. The Municipal Association of South Carolina has a sample assessment they recommend. At GovPossible, we’ve incorporated that with a letter that includes the municipalities letterhead and answers some Frequently Asked Questions.
What are The Steps In An Assessment?
Assuming the business is insistent on appealing, there are a series of phases in the assessment process:
- Assessment Delivery & Initial Appeal: Once the assessment is sent, an appeal by the business must be made within 30 days.
- Informal Meeting: If an initial appeal is received in time, the municipality must schedule an informal meeting with the business within 15 days.
- Final Assessment & Appeal: After the informal meeting, the organization must deliver a final assessment to the business within five days. The business then has thirty days to appeal that assessment. Along with the appeal, they must pay 80% of the license fee resulting from the assessment.
- Appeals Hearing: If a final appeal is received, a formal hearing with either Council or its appointed appeals body within 30 days.
- Hearing Decision: The decision resulting from the hearing must be filed with the business licensing office and delivered to the business. There is not a required time frame for the delivery of the decision. If the business wishes to appeal that decision, they must request a contested case decision with the Administrative Court within thirty days of the postmark or delivery of the decision.
How Do I Keep Track of An Assessment?
If you have GovPossible, good news! Business licensing software includes the ability to track the assessment process, assign tasks throughout the process to staff members, and attach the documentation and notes to the assessment as the process moves forward.
If you don’t have GovPossible, we’re still here to help! We’ve created a tracking worksheet you can download.
The worksheet provides a simple way to create and track the dates you need to stay compliant with the sales process. If you have any suggestions for improving it, we’d love to hear from you!