Penny Tax Control Group Operating Illegally Since 2014

May 18, 2016

Investigative Reports

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By RON AIKEN

Business.License

Penny Tax Development Team LLC never got city, county business licenses

The Richland County penny tax team has been operating without required business licenses in the county and city for nearly two years, The Nerve has learned. That oversight could could trigger fees in excess of tens of thousands of dollars dating back to 2014 from both the county and city separately, each of which would have been deprived of the revenue.

Calls to the Richland County and City of Columbia business license offices Monday afternoon confirmed no business license had ever been applied for or renewed for the county’s Program Development Team (PDT) of M.B. Kahn, Brownstone and ICA, collectively doing business as Richland PDT, LLC.

Since the PDT is located within the city limits, it requires a city license. Since it does work in unincorporated Richland County, it requires a Richland County license as well. Checking by both business name (Richland PDT, LLC) and address (201 Arbor Lake Drive), the most recent business to have a license at that location was a 2010 license for Ometric Corporation, which Secretary of State records show was dissolved in 2011.

The South Carolina Secretary of State lists Richland PDT, LLC as having been established in October 2014. The agent of record is M.B. Kahn, meaning that group is responsible for requesting a license for the business.

Richland County director of transportation Rob Perry declined to answer questions about business licenses and referred the questions to PDT program director David Beaty of ICA. Multiple messages left with Beaty were not returned.

Pam Davis, director of the Richland County Business Service Center that oversees business licenses, declined to discuss the situation with The Nerve Tuesday morning and referred a reporter to public information director Beverly Harris.

A source inside Richland County government who did not wish to be identified said the PDT definitely requires a business license.

“The PDT is a separate entity from the individual business involved,” the source wrote The Nerve. “Since the (county) check is made out to their LLC, they had to file for a federal tax number and register for a Richland County vendor number.

“ANY (author’s emphasis) vendor or contractor, whether out of state, out of town or out of the county, who performs any work in the unincorporated areas of Richland County HAS to get a license.”

Both Richland County and the City of Columbia require business licenses to conduct business of any kind. Additionally, the city requires clearance forms before a license can be approved that may involve one or more approvals from the zoning, building inspection, fire marshal, DHEC and engineering departments. Richland County has similar approval requirements. Licenses also may be denied.

The cost of a business license for the city and county varies by income. Both the city and county have penalties in place for failure to apply for a license. For Richland County, a penalty of 5 percent a month for the license fee is assessed for the first year, according to revenue inspector Zach Cavanaugh. For businesses receiving millions in revenue, the fees could add up to $1,000 per million in income.

On its website, the penny tax program claims total revenues collected in excess of $124 million, meaning it’s possible that business license penalties could be in the tens of thousands.

The PDT team awards all penny tax contracts and approves payments to subcontractors. County council approves the contracts recommended by the PDT. As part of the program management agreement the PDT signed with the county  effective Nov. 3, 2014, the PDT received an initial “mobilization” outlay of $560,878 to set up its Arbor Lake office and a flat fee of $400,000 for “project management.” Since then, the PDT team receives a flat fee of $501,666 per month for program development.

When reached Monday evening, Richland County Council chairman Torrey Rush was stunned to learn the group never bothered to get a business license.

“I was not aware of that,” Rush said. “I tell you what, when it rains, it pours.

“I wasn’t aware of that, and I’m speechless, to be honest with you. How do you forget something that essential?”

Chances are it won’t be forgotten for long.

County and city officials each told The Nerve  they would be looking into the situation, with Cavanauugh saying he intended to visit the business sometime this week. Businesses found to be operating without a license are allowed to repay back fees and fines, provided they comply. If they don’t, by law the county investigators are empowered to initiate an audit, including being able to access all books and records of a business to determine fees and penalties.

“Most businesses comply,” he said.

Reach Aiken at (803) 254-4411 or email him at ron@thenerve.org. Follow him on Twitter @RonAiken and @TheNerveSC and like us on Facebook.

  • truthbetole

    “the PDT team receives a flat fee of $501,666 per MONTH for program development.”

    Incredible.

  • Cola_GCock

    It just gets worse and worse.

    This all started with the rigged election in 2012 when voting machines were shorted at selected precincts and machines were modified to record “NO” votes as “YES” for the penny sales tax.

    The citizens of Richland County should be outraged and demand a full investigation. Where is the FBI?

  • truthbetole

    Looks like the selection process for the “PDT” may have been a little tricky to begin with.

    Who is ICA anyway? Hmmm….let me guess. If I was a bettin’ man, I’d say they have a significant number of “Project Managers” who were former SCDOT Engineers.

    No wait, could Sen. Leatherman have some ownership interest in ICA….no, that would be a conflict of interest. Nevermind.

    http://www.wsmv.com/story/24684264/firm-to-re-file-despite-negative-protest

  • Helen Ann Davis

    Umm, I think I’m ready to move to NC….freaking crazy ……WE WANT THE FBI INVOLVED, NIKKI HALEY!!

  • SCMike1

    Don’t act surprised when the PDT will be permitted to repay back fees, for which it will be reimbursed.

    Nuttin’ to see here folks, just move along…

    • Susan Quinn

      No, don’t be surprised when WE TAXPAYERS are expected to repay those back fees for PDT.

  • Sarah Toenin

    Ahhh.. Richland County, the precious gift of cultural enrichment and vibrant diversity – brought to you by corrupt graduates of DINDU U.

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