As many as 20,000 businesses in Jackson could lack business licenses.
Horne LLP is handling a project to improve the city’s business license database, which has been plagued by software failures and has become unreliable for issuing renewals and validating accuracy.
As part of its work, Horne will sort through a list of 20,000 businesses that may be unlicensed.
“It is expected that many of the 20,000 businesses may be false positives, but we do expect to identify a large portion of businesses that do require licenses,” wrote Jordan Hillman, director of planning and development for the city of Jackson, in a May 11, 2022 memo to Jackson Mayor Chokwe Antar Lumumba.
The upgraded database is expected to produce multiple long-term benefits, Hillman wrote, that will include:
-“Immediate revenue collections for uncollected debt up to $425,000. (If we collect even 50% of potential revenue, we have covered the costs of implementing this project).
- “The migration of clean data into the stable system will allow the City to collect the full amount in future years and increase annual revenue.
- “Detailed data categorizing businesses correctly by NAICS (North American Industry Classification System) Codes will allow additional efforts to be automated from the business license process. The city did not have a way to manage implementation of specific requirements by business type. We can now develop new ordinances targeting ongoing challenges and have them automated into our license issuance and renewal process. This could include public safety initiatives around camera requirements, lighting, hotel, gas stations, clubs, waste tires, etc.
- “Detailed data collection during the migration will allow us to have a better understanding of our minority business community and to have reporting that allows more targeted outreach for doing business with the city.”
Anyone who conducts business in the city of Jackson is required to obtain and renew annually a business license, except for businesses that are specifically exempted by state or federal statute. Also known as a privilege license, a business license is a permit to do business for a profit.
The fee for a business license varies, with most determined by either the number of employees or the amount of the inventory.
The first renewals with the new system are expected to go out in September and then it will continue month by month, Hillman told council members in May.
Horne will provide training so the city can manage the system. “We will become more and more independent with each month the way we have structured it,” Hillman said.
Hillman said in May that she expects to have a good handle on the amount of additional revenue the new database is generating in about a year.
“This time next year, I should be in a good position to say, ‘Hey, we are actually showing $200,000 more revenue. Let’s talk about how we re-apply that.”‘
Steve Baker, property manager at Canton Mart Square, can easily point to the business license for Briarwood Enterprises, which is the holding company for the shopping center. The license is thumbtacked to a bulletin board in the center’s office.
“That way we know we have it,” said Baker, property manager for Canton Mart Square. “When we send in a check for renewal, I make a copy of the bill we received and check we sent in and put it in a file.”
About 10 years ago, Baker was surprised to discover Briarwood Enterprise, which had been in business about 50 years at that time, lacked an up-to-date business license.
“Someone from the city of Jackson came into our office to be sure we had a permit for our signage,” he said, “and we had it. The guy said, ‘Mr. Baker, you’ve got a bigger problem. You’re not licensed to do business in the city of Jackson.
“Somehow it had fallen through the cracks. We weren’t getting a renewal notice and we failed to notice it. I went downtown that day and took care of it. I think we have a handle on it now.”
Baker provides business license information as well as sign permit information to anyone who ask sabout leasing space at the shopping center.
“I tell them, ‘These are the people you’re going to need to contact,’” he said. “So many times, they don’t know. You do have to jump through some hoops to start a business.”
Virgi Lindsay, who represents Ward 7 on the Jackson City Council, said she was happy to vote in favor of hiring professionals to modernize the business license database and provide help with identifying unbilled revenue due to system errors.
“The city has done the best it could with antiquated software and it’s likely a business could have slipped through the cracks,” she said. “That’s probable.”
The city needs to reclaim any business license revenue it may be due, Lindsay said. That revenue, as she understands it, will go back into the Planning and Development Department budget.
The council voted to pay Horne up to $181,000 to expand the scope of its work with the database, which initially included migration of data from the old software, correcting invalid data points, identification of missing and failed renewals, identification of uncollected revenue and enrichment with external data from agencies such as the Secretary of State’s Office.
Plans call for integrating the improved database into the digital service platform, Open Gov Citizen Services by the close of the project, which is Sept. 30, 2023.
Hillman explained the need for additional help from Horne, writing that the launch of a new system, regular renewal processing, processing of new licenses and collections of missed revenue would be challenging at the current level of staffing and referenced $425,000 that could be claimed from neglected business licenses.
“This parallel approach would place city staff attempting to collect up to $425,000 in uncollected revenue while trying to manage the digital record claim process for over 5,000 renewals at one time,” she wrote.” Staff would also still be processing monthly renewals (500-600 renewals per month). With current staff levels this is an impossible math problem.”
