Myrtle Beach changing business license rates

The cost of doing business in the city of Myrtle Beach will jump for almost 3,000 businesses next year if a new business license ordinance is passed.

The Myrtle Beach City Council gave initial approval to a re-structuring of the business license law this week with some major changes in store.

For some businesses in the city, the cost of a business license may take a slight dip. But for almost 2,800 companies and individuals who have offices outside the city, their license fees will go up.

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Currently, any company or individual doing business in Myrtle Beach but has an office elsewhere pays 1.5 times the rate that a resident company pays.

With this new ordinance, the outside company will pay twice as much. This affects the minimum charge on the first $2,000 of gross revenue as well as the rate per additional $1,000 in revenue.

Assistant Finance Director Mary McDowell said the new ordinance brings the city’s business license structure in line with IRS guidelines.

The businesses are divided into eight major classifications with a company receiving a 1 through 8 tier. The higher the number, the more a business license costs.

McDowell said most companies will actually fall a number or two in tier ranking, but the savings to the business would be minimal.

At their budget retreat, the City Council was told that a drop in the number of new and renewed business licenses is one of the major factors causing the city’s current financial crunch.

City spokesperson Mark Kruea said it’s hard to get a snapshot of just how many business licenses are issued each year because some are for just one-time projects.

Last business year, which runs from June through May, the city sent out 9,096 renewal letters. Of those, 458 replied that they were no longer doing business in the city.

Of the 8,638 remaining license renewal possibilities, 4,701 in-city licenses and 2,354 out-of-city licenses were issued.

On Tuesday, Budget Director Mike Shelton said that before the council gives final approval to the new rates, his department may also recommend a 2.5 increase in all of the tiered rates.

This new model will also remove the business license exemption for nonprofits or charities that engage in business activities the IRS deems taxable.

It will also remove the blanket exemption for vendors participating in events at city festivals or city venues.

This does not apply to vendors at events at the Myrtle Beach Convention Center.

City Manager Tom Leath said groups using the convention center are already paying a hefty fee to use the facilities.

Also, any vendor participating in a private event inside a hotel or convention space is exempt from needing a business license.

As of now, anyone who has one rental property used for long-term rentals has been exempt from needing a business license. The revised law would remove this exemption.

In the original revised proposal, car dealerships would have lost an exemption for trade-in allowances when reporting their annual gross revenue.

Several council members balked at this during the budget retreat and the exemption was left in the new version.

The council heard from developers who are planning a new shopping district at the intersection of Farrow Parkway and Bypass 17.

Called Centre Pointe, the planned unit development will be anchored by a grocery store with other retail stores located beside it and on outparcels along the highway.

Future plans call for residential units to be added at the rear of the development.

It’s the residential part that caused concern among some residents nearby.

Jim Condrey said word had gotten out that the residential area would be devoted to low income, Section 8 housing. He said he and his neighbors were worried what that would do to their property values.

Condrey was assured by council member Wayne Gray and Mayor John Rhodes that such a scenario is highly unlikely.

Gray said there is no requirement for that part of the former Air Force base to be used for low income housing.

“The dirt there is going to be too expensive for a developer to put up subsidized housing,” Gray said.

Rhodes said the nearby neighborhoods had nothing to worry about concerning future residential units going up at Centre Pointe.

“Knowing the developers, I don’t think they’re that stupid,” Rhodes said.

Tom O’Dare • 488-7261