OIG No. 24-15 Business Tax Receipt and Resort Tax Inspection Report-Joseph M. Centorino, Inspector General
TO: Honorable Mayor and Members of the City Commission
FROM: Joseph M. Centorino, Inspector General
DATE: July 24, 2024
PROJECT: Business Tax Receipt and Resort Tax Inspection Report
OIG No.: 24-15
PERIOD: 2016/17 fiscal year through 2023/24 fiscal year (October 1, 2016 – September 30, 2024)
The City of Miami Beach Office of the Inspector General (OIG) used data analytics to examine the
population of Business Tax Receipts (BTRs) entered into the EnerGov system, the City licensing and
permitting system. Testing focused primarily on determining whether any businesses had not timely
obtained its BTR for the 2023/24 fiscal year as of March 30, 2024 and then the number of prior fiscal years
for which it was not compliant. It is important to emphasize that the results of the OIG’s analysis are only
as accurate as the data inputted by City staff into the EnerGov system.
BUSINESS TAX RECEIPTS SUMMARY
In accordance with Florida State Statute 205.042, the City has the authority to impose a business tax
through a resolution or ordinance for the privilege of conducting or overseeing any business, profession,
or occupation within its jurisdiction. As a result, the City has implemented a business tax (previously
referred to as an occupational license), which has remained mostly unchanged over the years, with the
exception of fees.
As described in Section 102 of the Miami Beach City Code, the City Commission levies a business tax for
the privilege of engaging in or managing any business, profession, or occupation within the City’s
jurisdiction. Each business tax receipt is valid for one year, from October 1 through September 30 of the
following year, and it must be posted in or about the place of business where it may be seen upon
inspection by any official of the City. City Code Section 102-379 lists the tax schedules for various
businesses, occupations, and professions. The City attempts to notify all receipt holders that their receipts
are due for renewal; however, they are responsible for renewing the receipt prior to October 1, even if a
renewal notification from the City has not been received.
There are penalties for failing to display the receipt, operating without the business tax receipt, or failing
to timely renew the receipt. Enforcement and collection procedures may consist of prosecution before
the Special Master, suspension/revocation proceedings, suit for injunctive relief to enjoin the operation
of the business, imposition of a special assessment lien, or imprisonment and imposition of a fine.
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The City Finance Department (Finance) is responsible for the issuance, administration, and collection of
BTRs. The Code Compliance Department (CCD) oversees enforcement, monitoring residential
and commercial districts for potential violations of the City Code.
Other City departments may also become involved in the process depending on the business type and
its location. For example, the Building Department will check if there is a valid certificate of
occupancy (a change in the classification of the business establishment or use of the space) for the
building and if there is a change of occupancy based on the Building Code for the proposed use.
Similarly, staff in the Fire Department Plan Review Section will check if there is a change of occupancy
based on the Fire Code for the proposed use. The Planning Department will ensure that the type of
business proposed is permissible in the chosen location. The Transportation and Mobility
Department will check to determine if the proposed project will increase the site’s demand for roads,
water, drainage, sewers, parks, and other city services and facilities. The Office of Asset Management
must be involved if the business is a beachfront concession.
BACKGROUND
In February 2024, during an ongoing OIG audit, the assigned auditor discovered several
businesses operating on City-owned property without a valid BTR, some for multiple fiscal years.
The auditor contacted the CCD to investigate this non-compliance. As a result, CCD staff issued
several Notices of Violations, and some businesses were shut down, having to pay more than $97,000
in total to obtain the BTRs needed to reopen. This situation raised questions about the City’s
monitoring of compliance with BTR requirements.
ANALYSIS PERFORMED AND INITIAL RESULTS
A data analysis process was conducted using information extracted from the EnerGov database to
create a color-coded pivot table (Matrix) to display the timeline of all permits in the system. Finally, a
formula in column Test flags all permits that were not active in the fiscal year 2024 or not labeled as
Closed, resulting in approximately 3,500 permits being marked for possible non-compliance and
further testing. An example of the Matrix’s displayed information is shown below:
LICENSE
NUMBER BUSINESS NAME 2018 2019 2020 2021 2022 2023 2024 Test
BTR000001 Business A Not Issue Look Over
BTR000002 Business B Expired Expired Expired Closed
BTR000003 Business C Expired Expired Expired Not Issue Look Over
BTR000004 Business D Expired Expired Expired Expired Expired Pending Active
BTR000005 Business E Expired Expired Expired Pending Active
BTR000006 Business F Expired Expired Expired Expired Expired Expired Active
BTR000007 Business G Expired Expired Expired Expired Expired Pending Look Over
BTR000008 Business H Pending Look Over
BTR000009 Business I Expired Not Issue Look Over
The list yielded approximately 13,700 different types of permits. It should be noted that some of the
permits included in the list might belong to businesses or individuals no longer in a commercial
relationship with the City.
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There may be multiple reasons and different root causes to explain why more than 3,500
identified businesses were not issued BTRs. For example, some businesses may have ceased
operations without providing notice to the City, and/or the City was notified but failed to take the
appropriate action(s); some businesses may never have been licensed due to ignorance of BTR
requirements, while others may have intentionally evaded the requirements.
ANALYSIS RESULTS
After a brief review of the list, the OIG noticed that several entities actively doing business in the
City, such as restaurants, banks, and retail merchants, had been working without the required BTR for
several years.
The OIG sent the Matrix to and discussed the information with both Finance and CCD throughout March
2024. During these conversations, the OIG was informed that Finance sends a list of businesses that may
be operating without BTRs to the CCD every month, but the list dates back only one year.
The OIG requested this list and confirmed the information by doing a sample comparison between
the Matrix and the list from the Finance Department. It was found that sampled businesses that had
been non-compliant for over a year were not included in the non-compliant list provided by Finance.
This could explain the existence of numerous businesses operating without BTR for multiple years since,
after one year of non-compliance, the business will no longer appear on the list and most likely will go
undetected.
ENFORCEMENT REVIEW
To determine and monitor compliance outcomes, the OIG conducted a second data analysis involving
the previously created Matrix and the CCD Notice of Violation (NOV) database to determine how
many businesses in the Matrix list received an NOV. This analysis compared the addresses in the
Matrix’s list with the addresses of NOVs issued between March 29, 2024, the date the permit list was
shared with CCD, and June 30, 2024. Business details in both lists were also compared to improve
the accuracy of the matches. The following list includes the number of businesses, segregated by
business types, that were found to be non-compliant by the CCD and issued either an NOV or a Courtesy
Notice.
Business Type # Businesses
Apartment Buildings (Rental) 11
Apartment Rooms 4
Automobile/Truck: Body Shop, Garage, Storage 1
Beauty Parlors, Hairdressing, Facial Massage, Manicuring 4
Building & Loan, Financial Institutions 1
Condominium 6
Dog Grooming, Animal Clinic 2
Gallery, Art 1
Hotels 2
Institutions 1
Laundry Dry Cleaners 1
Merchants Sales 8
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Merchants Sales-From $100,000 4
Office 1
Parking Lot 1
Property Management – Shell BTR 1
Restaurants 6
Storage Yard 1
Transient Short-Term Rental – Residential 9
Undetermined* 3
Grand Total 62
*The Business Type data for those businesses was not stated.
It is important to note that the 62 businesses listed represent only those that the CCD has identified and
issued NOVs or Courtesy Notices to during the specified three-month period and do not encompass all
businesses requiring review. Also, the CCD officers might have visited more businesses listed in the Matrix
than the ones that received NOVs, but either no violation was issued on those businesses, or they may no
longer exist.
Also, during the analysis, the OIG noticed that the information in EnerGov is not consistently updated or
accurate. Many businesses that were actually closed did not appear as such in the system. While it is the
responsibility of the companies to inform the City when they close or are sold, this often does not happen,
resulting in the information in the City databases becoming outdated.
RESORT TAX NON-COMPLIANCE
During the process of looking for data in EnerGov system to perform its BTR analysis, a file report titled
ResortTaxAccountWithMissingReturns was noticed. This report lists businesses not complying with
section 102-311 of the City Code by not sending monthly tax returns with corresponding payments to the
City. The spreadsheet shows, as of March 2024 a detailed record of 878 non-compliant businesses,
including information such as the total number of missing returns for each business, which ranged by
March 2014 from 1 to 84, as well as account numbers, the names and addresses of the businesses, and
contact information. From the 878 non-compliant businesses, 444 accounts had 1 or 2 missing monthly
returns, while 434 had 3 or more missing returns. This list was relayed and discussed with Finance and
CCD during the meetings held related to the BTR Matrix analysis performed.
CONCLUSION
Data analytics, which utilizes various tools, technologies, and processes to identify trends in raw data in
order to more rapidly formulate strategies and arrive at conclusions, has become a favored method in
OIG work nationally and will be increasingly relied upon by the Miami Beach OIG . The analysis conducted
by the Office of the Inspector General has identified gaps in the enforcement of Business Tax Receipts.
These early results show that numerous businesses have operated without the required BTRs for several
years. This highlights a need for enhanced coordination between the Finance Department and Code
Compliance Department to ensure timely issuance and enforcement. Moving forward, the use of data
analytics as a tool and maintaining clear, updated information within the system should be prioritized to
improve compliance and fair tax contribution.
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If requested, the OIG is willing to perform similar BTR and Resort Tax analyses so that City management
can more quickly identify scofflaws or inaccurate EnerGov system data so that the appropriate
corrective action can be initiated.
We appreciate the collaboration of the Code Compliance and Finance Departments throughout
this analysis. The OIG will continue its review of available BTR data with appropriate follow-up
discussions with both departments.
Respectfully submitted,
_____________________________ __________________
Joseph Centorino, Inspector General Date
_____________________________ __________________
Mark Coolidge, Chief Auditor Date
_____________________________ __________________
Norman Blaiotta, Deputy Chief Auditor Date
cc: Eric Carpenter, City Manager
Jason Greene, Chief Financial Officer
Mark Taxis, Assistant City Manager
Hernan Cardeno, Esquire, Code Compliance Department Director
OFFICE OF THE INSPECTOR GENERAL, City of Miami Beach
1130 Washington Avenue, 6th Floor, Miami Beach, FL 33139
Tel: 305.673.7020 • Hotline: 786.897.1111
Email: CityofMiamiBeachOIG@miamibeachfl.gov
Website: www.mbinspectorgeneral.com
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