Legal Decisions and Orders Issued December 2, 2022

21-15850, 21-15851, & 21-18244 Wildt D and O

21-15914 Gianella D and O

21-15940 Hunn D and O

21-16025 Listenberger D and O

21-16909 Chai D and O

21-16967 Rea D and O

21-18219 Hagedorn D and O

21-18406 Purnell D and O

21-18458 Whitener D and O

22-51000 Richardson D and O

Justin Clark v. Jake Zimmerman, Assessor, St. Louis County, Missouri

STATE TAX COMMISSION OF MISSOURI

JUSTIN CLARK, ) Appeal No. 21-10011
) Parcel/locator No: 27N230313
)
Complainant(s), )
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
Respondent. )

DECISION AND ORDER

 Justin Clark (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $648,500. Complainant claims the property is overvalued and proposes a value of $612,100.  Complainant did not produce substantial and persuasive evidence establishing overvaluation. The BOE’s decision is affirmed.[1]

The evidentiary hearing was conducted on May 25, 2022, via WebEx.  Complainant appeared pro se. Respondent was represented by counsel, Tim Bowe.

FINDINGS OF FACT

  1. Subject Property. The subject property is located 9500 Fringe Ct., in St. Louis, Missouri. The parcel/locator number is 27N230313.

The subject property is located in the Tapawingo on the Green subdivision and consists of a .53 acre lot and a residential single family home built in 2010.  The home is a one and half story home and has 4,004 square feet of living space, including four bedrooms and three and half bathrooms.  Complainant purchased the land in 2008 for $105,000.  Complainant has not made any improvements to the property in the last three years.

  1. Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $658,500. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2021, was $648,500.
  2. Complainant’s Evidence. Complainant submitted Exhibits A through H which are described as follows:
Exhibit Description Status
A Summary of Complainant’s basis for the appeal, correspondence concerning the subject property, and photographs of the subject property Admitted
B Change of Assessment Notice for the subject property for 2021 Admitted
C Complainant’s BOE Appeal Information Admitted
D St. Louis County Real Estate Information for the subject property (Ownership, Legal and Assessments) Admitted
E St. Louis County Real Estate Information for the subject property (Property and Sales) Admitted
F Aerial view of the subject property Admitted
G Photograph of retaining wall in back yard of subject property Admitted
H Photograph of garage door and part of driveway of subject property Admitted

 

Complainant testified that his opinion of value for the subject property as of January 1, 2021 is $612,100.  Complainant testified that Exhibit A lays out the basis of his appeal to the STC.  Complainant’s main point of contention is that he believes the land value assigned by Respondent for the subject property is overvalued.  Using his exhibits for support, Complainant testified that 38% of the land is unusable because of a limestone retaining wall in the back yard which reaches 15 feet high.  The wall has an uphill wooded area behind it.  Complainant stated that these features make a large part of the land inaccessible and thus unusable.  Complainant asserted that Respondent improperly compared the subject property with others in the area that have fully accessible land which is usable, nearly flat, and overlook a golf course.  Despite these differences, Complainant argued that the land values for these properties is only slightly higher than that of the subject.  For the most part, Complainant accepts Respondent’s value as to the improvements on the property.

To reach his proposed total value of $612,100, Complainant took Respondent’s land value for the subject ($108,900) and multiplied by 62% (signifying the usable portion of the land).  Then Complainant added Respondent’s value for the improvements ($544,600), but subtracted $5,000 due to the fact that the subject only has a two-car garage as opposed to a three-car garage.  Complainant essentially made all of these arguments to the BOE at that hearing.  Complainant is not a licensed appraiser in the state of Missouri.

  1. Respondent’s Evidence. Respondent submitted Exhibit 1, the BOE Decision letter dated October 29, 2021, stating the BOE appraised value of $648,500 as of January 1, 2021 for the subject property.  Exhibit 1 was admitted without objection.
  2. Value. The TVM of the subject property on January 1, 2021, was $648,500.

CONCLUSIONS OF LAW

  1. Assessment and Valuation

Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.  Article X, Sections 4(a) and 4(b), Mo. Const. of 1945.  Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year.  Section 137.115.5(1)(a).  “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).   Determining the TVM is a factual issue for the STC.  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346.  The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).

The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.”  Snider, 156 S.W.3d at 348.  For this reason, the comparable sales approach is typically used to value residential property.  “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Id. at 347-48 (internal quotation omitted).  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. at 348.

  1. Evidence

The hearing officer is the finder of fact and determines the credibility and weight of the evidence.   Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  The finder of fact in an administrative hearing determines the credibility and weight of expert testimony.  Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012).  “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020).   The hearing officer “may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property.”  Section 138.430.2. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Id.

  1. Complainant’s Burden of Proof

The BOE’s valuation is presumptively correct.  Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020).  To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.”  Snider, 156 S.W.3d at 346.  The taxpayer’s evidence must be both “substantial and persuasive.”  Id.  “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage, 722 S.W.2d at 77 (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “in the nebulous twilight of speculation, conjecture and surmise.”  See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).

  1. Complainant Did Not Prove Overvaluation.

Complainant did not establish that the BOE valuation was erroneous, nor that TVM of the subject property as of January 1, 2021, was $612,100.  Complainant did not produce substantial and persuasive evidence rebutting the presumptively correct BOE value.

Neither Complainant’s exhibits nor his testimony utilized the comparable sales approach, income approach, or cost approach to support his proposed value.  No comparable sales were cited or analyzed by Complainant, nor did he offer an appraisal of the property as evidence of the TVM of the property as of January 1, 2021.  Complainant testified that the land value for the subject property is overvalued due to the lack of accessibility to 38% of the property based on his measurements.  However, Complainant offered no evidence substantiating the alleged diminished value caused by the retaining wall and inaccessible portion of the property.  Complainant claims that the land value as of January 1, 2021, was $67,500.[2]  However, Complainant purchased the land in 2008 for $105,000.  Complainant does not provide evidence substantiating how the land has been devalued almost $40,000 in over a decade.

The lack of evidence relating to a recognized valuation method renders Complainant’s proposed value speculative and unpersuasive.  See Cohen, 251 S.W.3d at 349 (holding an opinion of value loses probative value when based on an improper foundation).  Complainant did not produce substantial and persuasive evidence showing the BOE overvalued the subject property and “the value that should have been placed on the property.”  Tibbs, 599 S.W.3d at 7.

CONCLUSION AND ORDER

The BOE decision is affirmed.  The TVM of the subject property as of January 1, 2021, was $648,500, with an assessed value of $123,215.

Application for Review

A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person listed below in the certificate of service.

Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.

Disputed Taxes

The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an application for review, unless said taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED November 4, 2022.

STATE TAX COMMISSION OF MISSOURI

Benjamin C. Slawson

Senior Hearing Officer

State Tax Commission

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Noah Shepard
Legal Coordinator

[1] Complainant timely filed a complaint for review of assessment.  The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.   Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

[2] Exhibit A, p. 1.

Michael E. Mullen v. Jake Zimmerman, Assessor, St. Louis County, Missouri

STATE TAX COMMISSION OF MISSOURI

MICHAEL E. MULLEN ) Appeal No. 21-16910
) Parcel/locator No: 24S340373
Complainant(s), )
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

DECISION AND ORDER SETTING ASIDE HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

HOLDING

On September 23, 2022, Senior Hearing Officer Benjamin Slawson (Hearing Officer) entered a Decision and Order (Decision) affirming the St. Louis County Board of Equalization’s (BOE) assessment of the subject property as of January 1, 2021.  Michael E. Mullen (Complainant) and Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) subsequently filed a Joint Application for Review of the Decision and Order of the Hearing Officer along with their stipulation.

The Hearing Officer’s Decision is SET ASIDE for the sole purpose of allowing Complainant and Respondent to submit their agreed-upon stipulation as to the value of the subject property as of January 1, 2021, to be placed on an agenda for a Meeting of the State Tax Commission as an item for a vote of the Commission.

FINDINGS OF FACT AND PROCEDURAL HISTORY

The subject property is identified by parcel/locator number 24S340373.  It is further identified as 534 Ries Road, Ballwin, St. Louis County, Missouri.  The subject property is classified as residential real property.    

Respondent valued the subject property at $358,600, as of January 1, 2021.  Complainant appealed to the BOE.  The BOE valued the subject property at $358,600, as of January 1, 2021.  Complainant timely filed an appeal with the STC, and a hearing officer was assigned.  The appeal proceeded to an evidentiary hearing.

The Hearing Officer subsequently issued his Decision with findings of fact and conclusions of law affirming the BOE’s valuation and finding that Complainant had failed to appear for the hearing and, therefore, had failed to present substantial and persuasive evidence to rebut the presumption of correctness of the BOE’s decision.

 Complainant and Respondent subsequently filed their joint application for review.  Section 138.432.  In their joint Application for Review, the parties stated that the reason for filing the joint Application for Review was to request the Commission to set aside the Hearing Officer’s Decision because the parties had reached a mutual agreement and stipulation regarding the value of the subject property in Appeal No. 21-16910 prior to the Hearing Officer’s Decision becoming final.  The parties’ joint Application for Review was taken under submission.

CONCLUSIONS OF LAW

Point on Review

In their single point on review, Complainant and Respondent together request the Commission to set aside the Hearing Officer’s Decision for the sole purpose of allowing Complainant and Respondent to submit their agreed-upon stipulation as to the value of the subject property as of January 1, 2022, to be placed on an agenda for a Meeting of the State Tax Commission as an item for a vote of the Commission.

Standard of Review

A party subject to a Decision and Order of a hearing officer of the STC may file an application requesting the case be reviewed by the STC.  Section 138.432[1].  The STC may then summarily allow or deny the request.  Section 138.432.  The STC may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the STC.  Section 138.432.    

Commission’s Ruling

For the reasons that follow, the Commission finds the parties’ argument to be persuasive.  After reviewing the whole record and having considered the Hearing Officer’s Decision and the Application for Review of the parties, the Commission sets aside the Hearing Officer’s decision for the sole purpose of allowing the parties to submit their agreed-upon stipulation to be placed on an agenda for a Meeting of the State Tax Commission as an item for a vote of the Commission.

Contested cases before an administrative agency may be resolved by stipulations or agreements among the parties.  See Section 536.060.  Here, along with their Application for Review, the parties filed their agreed-upon stipulation, which specifically provided that the parties “reached an agreed settlement by stipulation” for Appeal No. 21-16910 such that the proper assessed valuation for the appeal for tax years 2021 and 2022 should be as follows:

APPEAL NO CURRENT ASSESSED VALUE STIPULATED ASSESSED VALUE STIPULATED MARKET VALUE
21-16910 $68,130 $56,720 $298,500

ORDER

The Hearing Officer’s Decision is SET ASIDE for the sole purpose of allowing Complainant and Respondent to submit their agreed-upon stipulation as to the value of the subject property as of January 1, 2021, to be placed on an agenda for a Meeting of the State Tax Commission as an item for a vote of the Commission.  Segments of the Hearing Officer’s Decision, including the findings of fact and conclusions of law therein, may have been incorporated without reference in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140 within 30 days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8.

If no judicial review is made within 30 days or if the Commission enters its order approving the parties’ stipulation, this decision and order is deemed final, and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

SO ORDERED November 4, 2022.

STATE TAX COMMISSION OF MISSOURI

Gary Romine, Chairman

Victor Callahan, Commissioner

Debbi McGinnis, Commissioner

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to:

Counsel for Complainant,

Counsel for Respondent

Collector

Clerk

Noah Shepard

Legal Coordinator

[1] All statutory citations are to RSMo. 2000, as amended, unless indicated otherwise.

STATE TAX COMMISSION OF MISSOURI

MICHAEL E. MULLEN ) Appeal No. 21-16910
) Parcel/locator No: 24S340373
Complainant(s), )
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

DECISION AND ORDER

 Michael E. Mullen (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject residential property on January 1, 2021, was $358,600.  Complainant alleges overvaluation and argued that the TVM as of that date was $185,500.  Complainant did not produce substantial and persuasive evidence to support the asserted claim of overvaluation. The assessment of the BOE is affirmed.[1]

Facts

The evidentiary hearing was scheduled for September 14, 2022, at 3:00 P.M. via Webex.  Respondent timely appeared at the evidentiary hearing and through counsel Steve Robson.  Complainant did not appear.  Complainant did not seek a continuance or otherwise communicate any intent to proceed with the appeal.

Complainant Did Not Prove Overvaluation

The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  Complainant did not appear at the evidentiary hearing and produced no evidence admitted into the record to support the overvaluation claim.  Complainant’s failure to appear and to present any evidence necessarily means Complainant fails to meet Complainant’s burden of proof. [2]

CONCLUSION AND ORDER

The assessment made by the BOE is affirmed.  The TVM of the subject property as of January 1, 2021, is $358,600, classified as residential property.

Application for Review

A party may file with the STC an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person listed below in the certificate of service.

Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.

Disputed Taxes

The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an application for review, unless said taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED September 23, 2022.

STATE TAX COMMISSION OF MISSOURI

Benjamin C. Slawson

Senior Hearing Officer

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on September 23, 2022.

Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Noah Shepard

Legal Coordinator

[1]Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.  Mo. Const. art. X, sec. 14; Section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

[2] For over 150 years, Missouri law has recognized the self-evident proposition that “if there be no evidence sufficient in law to make a prima facie case on this issue, plaintiff cannot be entitled to recover.” Callahan v. Warne, 40 Mo. 131, 135 (Mo. 1867).

 

Benjamin Scott Roberts v. Jake Zimmerman, Assessor, St. Louis County, Missouri

STATE TAX COMMISSION OF MISSOURI

BENJAMIN SCOTT ROBERTS, ) Appeal No. 21-10194
) Parcel No. 30K640892
Complainant, )
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

DECISION AND ORDER

Benjamin Scott Roberts (Complainant) appeals the St. Louis County Board of Equalization’s decision valuing the subject residential property at $307,500 as of January 1, 2021.  Complainant alleges overvaluation and asserts the true value in money (TVM) of the subject property as $287,700 as of January 1, 2021.  The BOE decision is affirmed.[1]

The evidentiary hearing was held on June 9, 2022, via Webex.  Complainant appeared pro se.  Respondent was represented by counsel, Tim Bowe.  The appeal was heard and decided by Senior Hearing Officer Benjamin C. Slawson.

FINDINGS OF FACT

  1. The Subject Property.  The subject residential property consists of a 0.22 acre lot improved with a single family home located at 3337 Walworth Way Drive in St. Louis, Missouri.  The subject property is located in the Kingsborough subdivision in South County St. Louis.  The subdivision contains approximately 48 homes.  The house has 2,414 square feet of living space and contains a total of nine rooms, including four bedrooms and two and half bathrooms.  Complainant is the original owner and purchased the house in 2003.  Complainant moved in to house in 2004 after construction was complete.  Complainant has not made any significant improvements in the last three years.
  2. Assessment and Valuation. Respondent determined that the subject property’s value as of January 1, 2021, was $307,500. The BOE determined the subject property’s appraised value as of January 1, 2021, was $307,500.
  3. Complainant’s Evidence. Complainant introduced Exhibit A, a chart compiled by Complainant that includes data regarding the subject property, five comparable properties found by Complainant using St. Louis County’s information, and Complainant’s calculations and proposed value based on this data.  Exhibit A was admitted without objection.

Complainant, using Exhibit A to illustrate his arguments, testified that the rate of increase of assessment for the subject property from 2019 to 2021 was 14.87%, which is more than double the average rate of increase for three of the five comparable properties he found.  Complainant calculated the average rate of increase in assessment for the five properties to be 7.78%.  Complainant explained that he arrived at his proposed value of $287,700 by taking the 2020 appraised value of $267,000 and increasing it by this 7.78% average.

Complainant believes this methodology to determine the TVM of the subject property is reasonable based on the fact that his proposed value of $287,700 is still more than his calculated average of all five comparable property’s sales prices, $285,024, and only slightly less than his calculated average of Respondent’s 2021 appraised values for these comparables, $288,808.

Complainant also argued that if you look at the data from a price per square foot basis, his property is overvalued.  Using Respondent’s appraised value for 2021, the subject property’s price per square foot is $128.62 compared to the average $118.07 price per square foot of the five comparable properties.  Complainant stressed that the three comparable sales in his subdivision were larger homes than the subject, yet had a lower price per square foot than the subject.  Complainant did not present Exhibit A or these overvaluation arguments to the BOE.  Complainant testified that he is not a licensed appraiser in the State of Missouri.

  1. Respondent’s Evidence.  Respondent introduced Exhibit 1, consisting of the BOE decision letter for the subject property.  Exhibit 1 shows the BOE valued the subject property at $307,500.  Exhibit 1 was admitted without objection.
  2. Value. The TVM of the subject property as of January 1, 2021, was $307,500.

CONCLUSIONS OF LAW

  1. Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Sections 137.115.1; 137.115.5(1)(a).  The TVM is “the fair market value of the property on the valuation date[.]”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”  Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).  “True value in money is defined in terms of value in exchange not value in use.”  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted).  The TVM “is a function of [the property’s] highest and best use[.]” Snider, 156 S.W.3d at 346.  “Determining the true value in money is an issue of fact for the STC.”  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).

The TVM of a property is typically determined by the sales comparison approach, the income approach, or the cost approach.  Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d at 346-48.

  1. Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence.  Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.”  Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
  2. Complainant’s Burden of Proof.  The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property is overvalued.  Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  The BOE’s valuation is presumptively correct.  Tibbs, 599 S.W.3d at 7.  The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted).  The taxpayer also must prove “the value that should have been placed on the property.”  Id.  “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).

Property owners are competent to testify to the reasonable fair market value of their property.  Cohen, 251 S.W.3d at 348.  However, if owner’s testimony is based on “improper elements or an improper foundation[,]” it is not substantial and persuasive evidence rebutting the presumptively correct BOE value.  Id. at 349.

  1. Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.

 Complainant proposes a value of $287,700, an amount which he testified he obtained by taking the previous appraised value of the subject determined by Respondent in 2020, $267,000, and increasing it by his calculated average increase of assessment for his five comparables, 7.78%.

Complainant did not produce substantial and persuasive evidence rebutting the presumptively correct BOE value.  Complainant did not produce evidence supporting a comparable sales approach, income approach, or cost approach to value.  Complainant did offer comparable sale data for consideration.  However, Complainant’s method of averaging comparable sale appraised value percentage increases from 2019 to 2021, and then multiplying that percentage with the 2019 appraised value for the subject to determine its value in 2021, is not an approach to value that is used in Missouri to determine the TVM of a subject property.  Similarly, comparing properties simply on a price per square foot basis is also not an acceptable appraisal method to determine fair market value of a subject. Further, Complainant’s comparable sales were not analyzed using accepted appraisal methods, for example making appropriate market adjustments to determine value of the subject.  Finally, Complainant did not offer testimony of an appraiser, nor an appraisal of the property as evidence of the TVM of the property as of January 1, 2021.

The lack of evidence relating to a recognized valuation method renders Complainant’s proposed value speculative and unpersuasive.  See Cohen, 251 S.W.3d at 349 (holding an opinion of value loses probative value when based on an improper foundation).  Complainant did not produce substantial and persuasive evidence showing the BOE overvalued the subject property and “the value that should have been placed on the property.”  Tibbs, 599 S.W.3d at 7.

CONCLUSION AND ORDER

Complainant did not produce substantial and persuasive evidence of overvaluation.  The BOE decision is affirmed.  The TVM of the subject property as of January 1, 2021, was $307,500, with an assessed value of $58,425.

Application for Review

A party may file an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision.  The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person listed below in the certificate of service.  Failure to state specific facts or law upon which the application for review is based will result in summary denial.  Section 138.432.

Disputed Taxes

The Collector of St. Louis County, and the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an application for review, unless the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED November 4, 2022.

Benjamin C. Slawson

Senior Hearing Officer
State Tax Commission

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Noah Shepard
Legal Coordinator

[1] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.  Mo. Const. art. X, sec. 14; Section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

Imre Tuba v. Jake Zimmerman, Assessor, St. Louis County, Missouri

STATE TAX COMMISSION OF MISSOURI

IMRE TUBA, )
)
Complainant, )
) Appeal No. 21-18285
v. ) Parcel No. 16Q210451
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS COUNTY, MISSOURI, )
)
Respondent. )

DECISION AND ORDER

Imre Tuba (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision valuing the subject residential property at $291,200 as of January 1, 2021.  Complainant alleges overvaluation and asserts the true value in money (TVM) of the subject property as $218,400 as of January 1, 2021.  The BOE decision is set aside.  The TVM of the subject property as of January 1, 2021 is $258,500.[1]

The evidentiary hearing was held on April 14, 2022, via Webex.  Complainant appeared pro se.  Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, was represented by counsel, Tim Bowe.  The case was heard and decided by Senior Hearing Officer Benjamin C. Slawson.

FINDINGS OF FACT

  1. The Subject Property. The subject residential property consists of a 0.3 acre lot improved with a single-family ranch-style home consisting of 2,037 square feet of living space.  The house has four bedrooms and two bathrooms and is located at 80 Spring Valley Dr. in Chesterfield, Missouri.  Complainant bought the property in 2014 with the intent of living there.  The purchase price in 2014 was $170,000 and was sold in an “as is” condition.  Complainant testified that at the time of purchase the house was structurally sound, but he and his wife also realized that it was in need of several repairs.  Complainant ended up moving to Minnesota due to his wife getting another job there.  Complainant comes back to the subject property to intermediately make repairs and upgrades when able.  Complainant has not listed the property for sale in the last three years.        
  2. Assessment and Valuation. Respondent determined the subject property’s appraised value was $ $291,200 as of January 1, 2021.  The BOE independently determined the subject’s appraised value as of January 1, 2021, was $ $291,200.
  3. Complainant’s Evidence. Complainant introduced Exhibit A which was admitted without objection.  Exhibit A contains 63 pages and includes Complainant’s proposed value and a short description of the property, pictures of the subject property with descriptions of various condition issues, a copy of the 2015 decision of a State Tax Commission Hearing Officer for the 2014 TVM of the subject property, property details of comparable sales found by Complainant, property details of comparable sales used by Respondent, and House Price Index information from the St. Louis Metropolitan area from the federal government.

Complainant testified his opinion of value for the subject property is $218,400.  Complainant said that he is basing this value on starting with the previous appraised value by Respondent in 2019 of $198,000.  Complainant asserted that there has been little change in the property in the last two years, but agrees that real estate values have appreciated in the subject property’s area.  Complainant believes that a percentage of increase for 2021 should be consistent with the House Price Index (HPI) that is published by the U.S. Federal Housing Finance Agency (FHFA) for the St. Louis Metropolitan area, an average of 10.31%.  Increasing the 2019 value of $198,000 by 10.31% results in Complainant’s proposed value of 218,400.[2]

Complainant took issue with the comparable properties used by Respondent for the assessment.  Complainant argued that the comparables used, all selling for more than $300,000 and detailed in Exhibit A, are in far better condition than the subject property.  Complainant posited that the methodology of making market-based adjustments to these comparables is flawed because of these vast differences in condition.  Complainant found three comparable sales, also listed in Exhibit A, and concluded that these sales had a net average price per square foot less than the appraised value per square foot for his property, despite being in better condition than the subject.  After examining these comparables, Complainant proposed that a price per square foot of $107.21 is more reasonable for the subject.

Complainant also testified as to the many condition issues and outdated features that the house suffers from that he believes devalue the subject property.  These are detailed in Complainant’s Exhibit A and summarized as follows:

  1. Old-style décor throughout the house
  2. Entryway has old vinyl floor removed, bare subfloor exposed
  3. Hardwood floor in family room in poor condition and needs new finish
  4. Old carpet in living room that needs to be replaced, window trim needs to be installed
  5. Outdated galley-style kitchen, upper cabinets and lower cabinet doors removed for painting
  6. Appliances that are dysfunctional in kitchen, sink is old and needs to be replaced
  7. Carpet removed in hallway and some bedrooms including the master bedroom, bare floor exposed
  8. Trim around the house and closet shelves currently removed for painting/refinishing purposes
  9. Outdated and stained carpet in bedroom
  10. Broken window latches and cracks in window glass in bedroom
  11. Vintage bathtub in hall bathroom, vintage tile in bathrooms, sink and cabinet currently removed in master bathroom
  12. Basement with old, outdated vinyl tile transitioning to old, outdated orange carpet
  13. Walls and ceiling tiles in basement rec room in need of repair, vinyl floor outdated, rec room bar in process of being dismantled
  14. Old but functional water heater, HVAC system, washer and dryer
  15. Utility room in basement has old vinyl floor and wood paneling
  16. Water damage in sunroom ceiling
  17. Poor condition of wooden deck boards and railing, entire deck needs repair or replacement
  18. Garage door in older condition, rust present, frame is quite rickety
  19. Garage wall vertical studs pushed off horizontal studs

On cross examination, Complainant admitted that he is not a licensed appraiser in the state of Missouri, nor does not have classroom or professional training or experience in making market based adjustments in determining the TVM of a subject property.

  1. Respondent’s Evidence. Respondent introduced Exhibit 1, consisting of the October 29, 2021, BOE decision letter for the subject property.  Exhibit 1 shows the BOE valued the subject property at $291,200.

Steven Zahner, a Senior Residential Appraiser for the St. Louis County Assessor’s Office with over 40 years of total appraisal experience, testified on behalf of Respondent.  Mr. Zahner possesses a B.S. in Finance in with an emphasis in real estate.  Mr. Zahner has also been a certified appraiser in Missouri for over thirty years.  As of the date of the hearing, Mr. Zahner had worked for the County for a little under five years.  Mr. Zahner’s job responsibilities include valuing residential property for ad valorem tax purposes.

Mr. Zahner examined the evidence provided by Complainant and studied the comparables submitted by Complainant. Mr. Zahner testified that in his professional opinion, he would not have used most of them for determining the TVM for the subject.  Mr. Zahner noted that based on his research of the proposed comparables on MARIS, 164 Saddleford Dr. was a rental property and was sold “as is.”  He said that “as is” sales are usually made to investors and are not market sales.  However, Mr. Zahner admitted on cross examination that the sale was on Multi-Listing Service (MLS) and that there was nothing to indicate that it was not a market sale.  Mr. Zahner also mentioned that the photos on the MLS for 164 Saddleford Dr. show that property to be outdated and not in good condition.

Mr. Zahner would not have used 305 Ridge Trail Dr. as a comparable because it is in a different market being a frame ranch, as opposed to brick like the subject.  He added that it is also not a good comparable because it is constructed on a concrete slab and thus does not have a basement like the subject.  Mr. Zahner noted that the last comparable, 627 Stablestone Dr., is a two-story home, not a ranch like the subject.  Mr. Zahner noted that two-story homes tend to sell at a lower price per square foot than ranch homes.  With a large selection of ranch home sales during the assessment period in question, Mr. Zahner would not have used this sale.

Mr. Zahner also testified that in comparing properties to determine the TVM of a subject property for appraisal purposes, the price per square foot is not the sole indicator of value to be used.  Instead, other factors such as the lot size, the condition of the property, the number of bedrooms and bathrooms, basement finish, and garage space also need to be considered by the appraiser.

Mr. Zahner reviewed all the information in Respondent’s file regarding the subject property.  In his opinion, the BOE value of $291,200 was a little high given that Complainant’s condition evidence was not provided at the time of the BOE hearing.  Based on his experience and training, Mr. Zahner would make an adjustment for the condition issues discussed by Complainant and value the subject property at $258,500 as of January 1, 2021.  Mr. Zahner explained that in his professional opinion this is a reasonable estimate given the living condition of Complainant’s house, and would be between $50,000 and $115,000 less than the sales prices of the five comparables used by Respondent.  He testified this is about how much value would be needed to add to the subject to reach the condition of those comparable sales.

At hearing during his closing statement, Counsel for Respondent indicated that Respondent agreed that the BOE value of $291,200 was too high and that Respondent was seeking a value consistent with Mr. Zahner’s analysis and conclusions.

  1. Value. The BOE decision is set aside.  The TVM of the subject property as of January 1, 2021 is $258,500, with an assessed value of $49,115.

CONCLUSIONS OF LAW

  1. Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Sections 137.115.1; 137.115.5(1)(a).  The TVM is “the fair market value of the property on the valuation date[.]”  Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted).  The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.”   Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993).  “True value in money is defined in terms of value in exchange not value in use.”  Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020) (internal quotation omitted).  The TVM “is a function of [the property’s] highest and best use[.]” Snider, 156 S.W.3d at 346.  “Determining the true value in money is an issue of fact for the STC.”  Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).

“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.”  Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach.  Id. at 346-48.  The STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.”  Id., at 348.

The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.”  Snider, 156 S.W.3d at 348.  For this reason, the comparable sales approach is typically used to value residential property.  “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.”  Id. at 347-48 (internal quotation omitted).  “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.”  Id. at 348.

  1. The hearing officer is the finder of fact and determines the credibility and weight of the evidence.  Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015).  “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.”  Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
  2. Complainant’s Burden of Proof.  The taxpayer bears the burden of proof and must show by a preponderance of the evidence the property is overvalued.  Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003).  The BOE’s valuation is presumptively correct.  Tibbs, 599 S.W.3d at 7.  The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.”  (internal quotation omitted).  The taxpayer also must prove “the value that should have been placed on the property.”  Id.  “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.”  Savage v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (internal quotation omitted).  Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.”  Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).

Property owners are competent to testify to the reasonable fair market value of their property.  Cohen, 251 S.W.3d at 348.  However, if owner’s testimony is based on “improper elements or an improper foundation[,]” it is not substantial and persuasive evidence rebutting the presumptively correct BOE value.  Id. at 349.

  1. Complainant Did Not Produce Substantial and Persuasive Evidence of Overvaluation.

Complainant did not produce substantial and persuasive evidence establishing a TVM of $218,400.  Neither Complainant’s exhibits nor his testimony utilized the comparable sales approach, income approach, or cost approach to support his proposed value, nor did he offer an appraisal of the property as evidence of the TVM of the property as of January 1, 2021.  While Complainant asserted that the FHFA HPI estimate is not in line with Respondent’s assessment, the FHFA HPI estimate is not an approach to value that is used in Missouri to determine the TVM of a subject property.

Complainant submitted a copy of another Senior Hearing Officer’s decision regarding the value of the subject as of 2014 as evidence of overvaluation here.  However, past STC decisions and orders provide “guidance,” not precedent. Administrative agency decisions “are not from courts of law and are not precedential.” Cent. Hardware Co. v. Dir. of Revenue, 887 S.W.2d 593, 596 (Mo. banc 1994). Therefore, an administrative agency “is not bound by its previous decisions, so long as its current decision is not otherwise unreasonable or unlawful.” Laclede Gas Co.’s Verified Application to Re-Establish & Extend the Fin. Auth. Previously Approved By the Comm’n v. Mo. Pub. Serv. Comm’n, 526 S.W.3d 245, 252 (Mo. App. W.D. 2017).  In other words, STC decisions and orders are non-binding, persuasive authority aiding the consistent disposition of factually analogous cases.  Further, this appeal is distinguished from the current appeal as there is no recent purchase of the subject property in the current appeal.  The 2014 decision in setting aside the BOE value was based on the fact that Complainant had recently purchased the subject property, and thus there was evidence of an actual sales price of property to establish value:

Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.  The actual sale price is a method that may be considered for estimating true value.  The actual sales price, between a willing seller, who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property.   St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).

Imre Tuba & Jenmei Xhao v. Jake Zimmerman, Assessor, St. Louis County, 2015 WL 4099465 (Mo.St.Tax.Com.), STC Appeal No. 14-10848, p. 5.

While Complainant offered a list of comparable sales which he believes are more determinative of the value of the subject property than those used by Respondent, these sales are not persuasive evidence.  These sales are not persuasive evidence as no adjustments are made using appraisal methods to account for differences between the subject property and these other properties.  Further, Complainant’s calculation of an average sale price of the comparables per square foot to determine the fair market value of the subject property is not a generally accepted approach to value property.

However, while Complainant did not prove his proposed value of $218,400, Complainant did persuasively show that the subject property is not in “move in” condition to any potential buyer.  With his testimony and the several pictures and descriptions of the subject property in Exhibit A, Complainant established that the living condition of the home is subpar compared to the comparables used by Respondent.  But because Complainant is not an appraiser, Complainant could not establish a dollar amount adjustment for these condition issues.

Although not required given the burden of proof, Respondent presented testimony of Mr. Steven Zahner, a certified appraiser with a plethora of experience in residential appraisal, which persuasively supports setting aside the BOE valuation and setting $258,500 as the TVM of the subject property as of January 1, 2021.  Given Mr. Zahner’s experience in appraisal of residential real property, this opinion of value is credible and persuasive.  Because the BOE did not consider this ample evidence of condition issues, Mr. Zahner did agree that the BOE valuation of $291,200 was too high.  Mr. Zahner reviewed the complete file for the subject property and examined Complainant’s condition evidence as described in Exhibit A and displayed in the pictures found in Exhibit A.  In his professional opinion, Mr. Zahner estimated that between $50,000 and $115,000 of repairs and renovations would need to be made to the subject to bring it up to the sales price values of Respondent’s comparables, taking into account adjustments that need to be made to those sales prices to determine the TVM of the subject.  Mr. Zahner’s testimony persuasively supports setting aside the BOE valuation and setting $258,500 as the TVM of the subject property as of January 1, 2021.

CONCLUSION AND ORDER

The BOE decision is set aside.  The TVM of the subject property as of January 1, 2021 is $258,500, with an assessed value of $49,115.

Application for Review

A party may file an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision.  The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.”  Section 138.432.  The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov.  A copy of the application must be sent to each person listed below in the certificate of service.  Failure to state specific facts or law upon which the application for review is based will result in summary denial.  Section 138.432.

Disputed Taxes

The Collector of St. Louis County, and the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an application for review, unless the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.

SO ORDERED November 4, 2022.

Benjamin C. Slawson

Senior Hearing Officer
State Tax Commission

Certificate of Service

I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on November 4, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.

Noah Shepard
Legal Coordinator

[1] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal.  Mo. Const. art. X, sec. 14; Section 138.430.1, RSMo 2000.  All statutory citations are to RSMo 2000, as amended.

[2] Rounded to the nearest hundred.