State Tax Commission of Missouri

WALTER & LOIS SCHULTZ,)

)

Complainants,)

)

v.)Appeal Number 09-57019

)

TOM COPELAND, ASSESSOR,)

FRANKLIN COUNTY, MISSOURI,)

)

Respondent.)

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On December 22, 2009, Senior Hearing Officer W. B. Tichenor entered his Decision and Order affirming the assessment by the Franklin County Board of Equalization.

Complainants filed their Application for Review of the Decision.

CONCLUSIONS OF LAW

Standard Upon Review

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[1]

The Hearing Officer as the trier of fact may consider the testimony of an expert witness or owner and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts or owners who testify on the issue of reasonable value, but may believe all or none of the expert’s or owner’s testimony and accept it in part or reject it in part.[2]

The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[3]

DECISION

Complainants’ Points on Review

Complainants raise the following points in their application for review:

1.Assessor’s estimate not comparable and does not constitute proper foundation.

2.Sustaining of objection to comparison to house at 242 St. Andrews Dr.

– Exhibit B.

3.Information from local realtors on market value of subject property did not

support value established by Assessor’s appraisal.

Points Raised Not Sufficient To Overturn Decision

Comparability of Assessor’s Appraisal

Complainants assert that there were many anomalies in the Assessor’s assessment including the use of a sale from July 2007.It is asserted that this property would have sold on January 1, 2009, for $75,000 less than its July 2007 sale.The critical flaw in this position is that no evidence was provided by Complainants at hearing to substantiate this position.More importantly, the Hearing Officer’s Decision neither adopted, nor rejected the appraisal tendered on behalf of the Respondent at hearing.The case was properly decided on the basis of Complainant’s failing to meet their burden of proof.The Hearing Officer properly found that the methodology developed by Complainants did not constitute an appropriate appraisal technique and therefore, no probative weight could be given to the conclusion of value.[4]

As the Hearing Officer correctly determined, the presumption of correct assessment by the Board of Equalization was not rebutted.[5]In accordance with the controlling case law, when the taxpayer fails to rebut the presumption of correct assessment by the presentation of substantial and persuasive evidence to establish the true value in money, the Board’s value must be sustained.

Ruling on Objection to Exhibit B

Complainants’ offering of Exhibit B was timely objected to by Respondent’s Counsel.The Hearing Officer had an obligation to rule on the objection.The Commission finds no error in the Hearing Officer sustaining the objection and excluding Exhibit B.The Hearing Officer’s discussion on this point sufficiently addressed the matter.[6]

Local Realtor Information

No realtor appeared to testify on behalf of Complainants at the evidentiary hearing.The Hearing Officer did not err on this point.Any discussion Complainants may have had with realtors concerning the value of their home on January 1, 2009, either prior to or after the evidentiary hearing, would be plain hearsay.

Conclusion

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer that Complainants failed to meet their burden of proof and therefore the presumption of correct assessment was not rebutted.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[7]

The Hearing Officer did not err in his determinations as challenged by Complainants.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.

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, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of Franklin 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 February 11, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

DECISION AND ORDER

 

HOLDING

Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2009 and 2010 is set at $833,000, residential assessed value of $158,270.Complainant, Walter Schultz appeared pro se.Respondent appeared in person and by County Counselor, Mark S. Vincent

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.

SUMMARY

Complainants appeal, on the ground of overvaluation, the decision of the Franklin County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $860,000, assessed value of $163,487, as residential property.The Board reduced the value to $833,000, assessed value of $158,270.Complainants proposed a value of $700,000, assessed value of $133,000.A hearing was conducted on December 3, 2009, at the Franklin County Government Building, Union, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Franklin County Board of Equalization.

2.Subject Property.The subject property is located at 255 St. Andrews Drive, St. Albans, Missouri.The property is identified by map parcel number 57-8-1-2-3-39.The property consists of a .87 of an acre home site.The lot is improved by a one-story, brick, single-family structure of good quality construction.The house was built in 1995 and appears to be in normal condition for its age.The residence has a total of nine rooms, which includes four bedrooms, four full and one half baths, and contains 3,048 square feet of living area.There is a full basement, which has 1982 square feet of finished living area.The home has an attached three-car garage.[8]

3.No New Construction and Improvements.There was no evidence of new construction and improvement from January 1, 2009, to the date of hearing.Complainants have no plans for any new construction and improvements prior to January 1, 2010.Therefore, in the absence of new construction and improvements during 2009, the value set for tax year 2009 must remain the value for tax year 2010.[9]

4.Complainants’ Evidence.Mr. Schultz testified as to his opinion of value.Mr. Schultz’s opinion of value was based upon his calculations reflected in Exhibit A.Relying on the comparable sales utilized by Respondent’s appraiser, the Complainant calculated the adjusted price per square foot of living area for each of the three comparables and the average.He then calculated that if the value of his property was $700,000, the per square foot price would be $139.17.If the value was calculated to be $750,000 the per square foot price would be $149.11.If the value was calculated to be $800,000 the per square foot price would be $159.05.Exhibit a was received into evidence.

Complainant also offered into evidence Exhibit B – MultiList Listing on property at 242 St. Andrews Drive.Objection was made on the grounds of lack of foundation and hearsay.Objection was sustained.The exhibit is maintained in the Commission file, but is not part of the evidentiary record.

5.Evidence Not Substantial and Persuasive.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $700,000, as proposed.

6.Respondent’s Evidence.Respondent presented the Appraisal Report – Exhibit 1 – and testimony of Lori Ruby, State Certified Residential Real Estate Appraiser for Franklin County.The appraisal determined a value of $833,000, relying on the sales comparison approach to value.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[10]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[11]The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[12]Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment.

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[13]True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

3.A reasonable time is allowed for exposure in the open market.

4.Payment is made in cash or its equivalent.

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[16]

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[17]Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[18] Complainants did not present an opinion of fair market value derived from a recognized appraisal methodology.

Complainants’ Burden of Proof

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[19]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[20]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[22]

The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]Complainants failed to present evidence to establish that their opinion of value was based upon proper elements and a proper foundation.The method developed by Mr. Schultz of averaging adjusted per square foot values is not recognized as an appropriate appraisal technique for ad valorem tax valuations.Therefore, it can be given no probative weight.

MLS sale and listing sheets are not accepted as an appraisal of any property.The information contained in such documents may be relied upon by experts in performing an appraisal.However, the documents themselves do not have a proper foundation to establish value for other properties, and they constitute rank hearsay.Accordingly, they are not generally admissible, unless as part of a properly prepared appraisal report.

ORDER

The assessed valuation for the subject property as determined by the Board of Equalization for Franklin County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2009 and 2010 is set at $158,270.

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [25]

The Collector of Franklin 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.If no Application for Review is filed, the Collector, as well as the collectors of all affected political subdivisions, shall disburse the taxes in accord with the decision on the underlying assessment in this appeal.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

W. B. Tichenor

Senior Hearing Officer

 

CREDE & CARLA EDENS,)

)

Complainant,)

)

v.) Appeal No.09-57016

)

TOM COPELAND, ASSESSOR,)

FRANKLIN COUNTY, MISSOURI,)

)

Respondent.)

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Franklin County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $96,000, residential assessed value of $18,240.Complainants appeared pro se. Respondent appeared in person and by County Counselor, Mark S. Vincent

Case heard and decided by Senior Hearing Officer W. B. Tichenor.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.

SUMMARY

Complainants appeal, on the ground of overvaluation, the decision of the Franklin County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $97,230, assessed value of $18,473, as residential property.Complainants proposed a value of $82,000, assessed value of $15,580.A hearing was conducted on December 3, 2009, at the Franklin County Government Building, Union, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Franklin County Board of Equalization.

2.Subject Property.The subject property is located at 3168 South Service Road, Union, Missouri.The property is identified by map parcel number 21-2-4.2-6.The property consists of a 2.96 acre home site.The lot is improved by a one-story, mobile home, single-family structure of fair quality construction.The house was built in 1996 and appears to be in below normal condition.The residence has a total of six rooms, which includes three bedrooms, two baths, and contains 1,232 square feet of living area.There is no basement and a detached two-car garage.The home is in below normal condition because of interior damage from wheel chair use.[1]

3.No New Construction and Improvements.There was no evidence of new construction and improvement from January 1, 2009, to the date of hearing.Complainants have no plans for any new construction and improvements prior to January 1, 2010.Therefore, in the absence of new construction and improvements during 2009, the value set for tax year 2009 must remain the value for tax year 2010.[2]

4.Complainants’ Evidence.Complainants testified as to their opinion of value.It was the opinion of Complainants that the subject property’s fair market value as of January 1, 2009 was $82,000.The basis for this opinion was issues of deferred maintenance on the interior of the home due to damage from use of a wheel chair and the mobile homes don’t appreciate in value, but depreciate.Complainants offered into evidence the following exhibits:

 

Exhibits D, E and F are maintained in the Commission file, but were excluded from evidence.

5.Evidence Not Substantial and Persuasive.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $82,000, as proposed.

6.Respondent’s Evidence.Respondent presented the Appraisal Report – Exhibit 1 – and testimony of Carl L. Sohn, appraiser for Franklin County.The appraisal determined a value of $98,000.Upon review of Exhibit G, Mr. Sohn modified his adjustment for condition from a -$2,000 to a -$4,000 adjustment.This resulted in an opinion of value of $96,000 for the subject property.Respondent’s evidence was substantial and persuasive to rebut the presumption of correct assessment and establish true value in money of $96,000 as of January 1, 2009.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[3]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[4]The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[5]Complainants failed to present substantial and persuasive evidence to rebut the presumption of correct assessment.Respondent’s appraisal report constituted substantial and persuasive evidence to rebut the presumption and establish value.

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[6]True value in money is defined in terms of value in exchange and not value in use.[7]It is the fair market value of the subject property on the valuation date.[8]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.

 

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

3.A reasonable time is allowed for exposure in the open market.

 

4.Payment is made in cash or its equivalent.

 

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[9]

 

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[10]Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[11] Complainants did not present an opinion of fair market value derived from a recognized appraisal methodology.The conclusion of value presented by Mr. Sohn was based upon the sales comparison approach to value.This approach is recognized as most appropriate for the valuation of owner occupied residential properties.

Complainants’ Burden of Proof

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[12]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[13]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[14]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[15]

The owner of property is generally held competent to testify to its reasonable market value.[16]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[17]Complainants failed to present evidence to establish that their opinion of value was based upon proper elements and a proper foundation.

Exhibit A provides no market data to establish a value of $82,000 for the subject property.Exhibit B only establishes an appraiser’s opinion of value for 2007 of $94,000.This does not establish a value for 2009.Exhibit C provides an opinion of value as of January 1, 2009 of $105,000.This does not support the owner’s opinion of value.

Exhibit D – Realtors Comp Sheet – was objected to on the grounds of lack of foundation and hearsay.The objection was sustained.The realtor who prepared the document was not present to testify and be cross-examined.The document does not provide an opinion of the fair market value of the property under appeal as of January 1, 2009.Furthermore, such a comparison sheet does not constitute an appraisal of the subject property under any recognized appraisal methodology. Accordingly, the relevancy of the document was not established to support a value of $82,000 for the Complainants’ property.

Exhibit E was a copy of pages from Exhibit C and therefore was excluded as being duplicative.Exhibit F was objected to on the grounds of lack of foundation and hearsay.Objection was sustained.The document was offered on the point of the gross living area of the subject home.No foundation was laid as to the maker of the document or the basis for the reported square footage of living area in the document.Irrespective, the exhibit has no probative value to establish the value offered by Mr. and Mrs. Edens.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Franklin County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $18,240.

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [18]

The Collector of Franklin 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.If no Application for Review is filed, the Collector, as well as the collectors of all affected political subdivisions, shall disburse the taxes in accord with the decision on the underlying assessment in this appeal.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

W. B. Tichenor

Senior Hearing Officer

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22^ndday of December, 2009, to:Crede Edens, 3168 South Service Road, Union, MO 63084, Complainant; Mark Vincent, Franklin County Counselor, P.O. Box 439, Union, MO 63084, Attorney for Respondent; Tom Copeland, Assessor, 400 E. Locust, Suite 105A, Union, MO 63084; Debbie Door, Clerk, Franklin County Courthouse, 400 E. Locust, Suite 201, Union, MO 63084; Linda Emmons, Collector; Franklin County Courthouse, 400 E. Locust, Suite 103, Union, MO 63084.

 

 

___________________________

Barbara Heller

Legal Coordinator

 

 

 

MARVIN W. JEFFERS,)

)

Complainant,)

)

v.) Appeal No.09-34035

)

RANDY HOLMAN, ASSESSOR,)

JEFFERSON COUNTY, MISSOURI,)

)

Respondent.)

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Jefferson County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Hearing Officer finds Complainant did not rebut the presumption of correct assessment by the Board. True value in money for the subject property for tax years 2009 and 2010 is set at $222,800, residential assessed value of $42,300.

Evidentiary hearing was held on December 1, 2009, at the Jefferson County Government Center, Hillsboro, Missouri.

Complainant appeared pro se.

Respondent appeared by counsel, David Senkel.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009, and whether there was an intentional plan of the assessing officials

to assess the property at a value greater than 19% of fair market value or at a greater percentage than the average residential assessment in Jefferson County.

SUMMARY

Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Jefferson County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $222,800 (assessed value of $42,300, as residential property).Complainant proposed a value of $200,000 (assessed value of $38,000).A hearing was conducted on December 1, 2009, at the Jefferson County Government Center, Hillsboro, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

FINDINGS OF FACT

1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Jefferson County Board of Equalization.

2.Subject Property.The subject property is located at 605 Alsace, Pevely, Missouri.The property is identified by parcel number 1.0-3.0-07.0-183.The property consists of 13,800 square foot lot improved by a one-story brick and siding, ranch, single-family structure of average quality construction.The house was built in 2008 and appears to be in average condition.The residence has a total of 6 rooms, which includes 3 bedrooms, 2 baths, and contains 1,840 square feet of living area.There is a full, unfinished basement and an attached three-car garage. The property was purchased by the Complainant in April, 2008 for $235,000. There was no evidence of new construction and improvement since January 1, 2009.

3.Complainant’s Evidence.Complainant testified on his own behalf and presented the following exhibits:

 

Complainant testified regarding Exhibit A.Exhibit A is a list of 18 properties.The properties are located in the subdivision next to the subject parcel’s subdivision.He testified that the subdivision is older than his subdivision and offered different amenities.The chart lists the true value of the property as determined by the Assessor’s Office for the 2009 assessment cycle and the sale price of the property.The Complainant subtracted the sale price from the Assessor’s true value for 2009.The Complainant determined the percentage of Assessor’s true value to sale price.He listed the square footage of the property, the price per square foot, and the size of the lot.No other comparisons or adjustments were made.In Exhibit B, the Complainant listed eight properties with the information provided by the Assessor’s Office.The information includes the Assessor’s true value for the 2009 assessment cycle, the square footage of each property and the price per square foot.The price per square footage for the listed properties ranged from $107.59 to $118.91 per square foot.The Complainant’s price per square foot based upon the value determined by the Assessor for the 2009 assessment cycle of $123.21.Complainant testified that the 18 properties from Exhibit A and the 8 properties from Exhibit B show discrimination by the Assessor’s Office.

4.Respondent’s Evidence.The Respondent presented the testimony of Joseph Berezowski, Certified Residential Appraiser, and Exhibit 1, his appraisal report on the subject property.The properties relied upon by Respondent’s appraiser in performing his appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property. The properties were located within 1 mile of the subject; the properties were in the same development and were within 13 lots of each other.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.

The comparables were described as follows:

Comparable 1 sold in October, 2008 for $280,300.It is located next door to the subject property.This property consists of a 17,424 square foot lot improved by a one-story brick single-family structure of average quality construction.The house was built in 2008 and appears to be in average condition.The residence has a total of 6 rooms, which includes 3 bedrooms, 2 baths, and contains 1,895 square feet of living area.There is a full basement and a three car attached garage.

Comparable 2 sold in December, 2008 for $265,000.It is three lots from the subject property. This property consists of a 13,939 square foot lot improved by a one-story brick single-family structure of average quality construction.The house was built in 2008 and appears to be in average condition.The residence has a total of 6 rooms, which includes 3 bedrooms, 2 baths, and contains 1,842 square feet of living area.There is a full basement and an attached three car garage.

Comparable 3 sold in August, 2008 for $228,000.This property consists of a 13,068 square foot lot improved by a one-story brick single-family structure of average quality construction.The house was built in 2008 and appears to be in average condition.The residence

has a total of 6 rooms, which includes 3 bedrooms, 2 baths, and contains 1,858 square feet of living area.There is a full basement and an attached three car garage.

The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.The appraiser made adjustments for time of sale, age, and fireplaces.All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.

The net adjustments for Comparable 1 amounted to -$2,900 or -1.04% of the sales price.The net adjustments for Comparable 2 amounted to -$2,300 or -.87% of the sales price.The net adjustments for Comparable 3 amounted to -$2,300 or -1.01% of the sales price.

The adjusted sales prices for the comparables calculated to $277,400, $262,700, and $225,700, respectively.The appraiser concluded on a $255,000 value which calculated to a value per square foot of $138.59 compared with the sales prices per square foot of living area for the comparables of $147.92, $143.87 and $122.71. The comparison of the value per square foot provides a validation check for the appraisal, to demonstrate that the indicated value is consistent with the market for properties such as the subject.

Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.

5.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $200,000, as proposed.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[1]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[2]

Courts will take judicial notice of their own records in the same cases.[3]In addition, courts may take judicial notice of records in earlier cases when justice requires[4] or when it is necessary for a full understanding of the instant appeal.[5] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[6]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[7]

The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and

persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[8]

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[9]True value in money is defined in terms of value in exchange and not value in use.[10]It is the fair market value of the subject property on the valuation date.[11]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.

 

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

3.A reasonable time is allowed for exposure in the open market.

 

4.Payment is made in cash or its equivalent.

 

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[12]

 

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[13]

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[14]

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[15]

Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[16]

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[17]

Complainants’ Burden of Proof

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[18]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[19]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[20]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[21]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[22]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[23]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[24]

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[25]

Sale of Subject

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.[26]

Discrimination

In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property on January 1, 2009; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[27]Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[28]The difference in the assessment ratio of the subject property and the average assessment ratio in the subject county must be shown to be grossly excessive.[29]No other methodology is sufficient to establish discrimination.[30]

Complainant Fails To Prove Discrimination

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainants have the burden to prove the level of assessment for the subject property in 2009. Complainants must prove the average level of assessment for residential property in Jefferson County for 2009.This is done by (a) independently determining the market value of a representative sample of residential properties in Jefferson County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.

The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in Jefferson County must demonstrate a disparity that is grossly excessive.[31]

Complainant’s discrimination claim fails because they have not demonstrated that a statistically significant number of other residential properties within Jefferson County are being assessed at a lower ratio of market value than their property.Complainants’ claim of discrimination is based upon 26 properties and their valuation as determined by the Assessor.The Complainant did not provide the independently determined market value for the 26 properties.The Complainant did not compare the independently determined market value with the Assessor’s value.The Complainant’s use of sale price is not sufficient as the sales were not verified, the date of sale is unknown, and adjustments for times based upon market data were not made.

Because Complainant did not establish the market value of their property was $200,000 and has failed to establish that he is being assessed at a higher percentage of market value than a statistically significant number of other properties in Jefferson County, he has failed to establish either overvaluation or discrimination.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Jefferson County for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax year 2009 is set at $42,300.

A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision.The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [32]

The Collector of Jefferson 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 139.031.8, RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

Maureen Monaghan

Hearing Officer

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22^ndday of December, 2009, to:Marvin Jeffers, 605 Alsace, Pevely, MO 63070, Complainant; David Senkel, One Thurman Court, P.O. Box 800, Hillsboro, MO 63050, Attorney for Respondent; Randy Holman, Assessor; Wes Wagner, Clerk; Beth Mahn, Collector, Jefferson County Courthouse, Hillsboro, MO 63050.

 

 

 

___________________________

Barbara Heller

Legal Coordinator

 

 

 

 

State Tax Commission of Missouri

ROBERT & DONNA BATEMAN,)

)

Complainants,)

)

v.)Appeal Nos.09-32010 & 09-32011

)

CATHY RINEHART, ASSESSOR,)

CLAY COUNTY, MISSOURI,)

)

Respondent.)

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

On December 22, 2009, Senior Hearing Officer Luann Johnson entered her Decision and Order (Decision) setting aside the assessments by the Clay County Board of Equalization.[1]

Complainants timely filed their Application for Review of the Decision.Respondent timely filed her Response.

CONCLUSIONS OF LAW

Standard Upon Review

The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[2]The Hearing Officer as the trier of fact may consider the testimony of witnesses and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the testimony of witnesses but may believe all or none of their testimony and accept it in part or reject it in part.[3]The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[4]

DECISION

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[5]

The Decision sets out all relevant factors regarding the subject tracts of vacant and unused land.The Hearing Officer reviewed each of the elements for the classification of vacant and unused land under Section 137.016.5, RSMo.The arguments presented by Complainants against a commercial classification are unpersuasive.The fact of the marketing of the property by Complainants for commercial development is their admission that the highest and best use of the two properties would not be for residential development, but would be for a commercial use.

In like manner, the most suitable immediate economic use under the statutory elements as a commercial property is supported by Complainants’ commercial marketing of the property.The zoning of the properties under appeal is neither conclusive, nor persuasive on the point of its most suitable economic use.[6]The fact that a proposed change in zoning in the past for a specific commercial use was rejected provides no basis to conclude that the property would not be used for some other commercial use.It is obvious by the property being marketed for commercial development that any prospective purchaser would understand that a rezoning would be required.Furthermore, it is equally obvious that Complainants fully understood that also by the fact the property was marketed for commercial development.

Zoning is but one factor to be considered in the analysis required when dealing with vacant and unused land.When all other factors are considered, as was done by the Hearing Officer, and it is determined that the existing zoning does not reflect the immediate most suitable economic use, then it is not controlling.Such is the case in the present appeal.The highest economic return to the owner upon selling the property is for future commercial development as demonstrated and verified by Complainants’ marketing of same.

The Hearing Officer did not err in her determinations as challenged by Complainant.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, 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, RSMo within thirty 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, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of Clay 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 April 13, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

DECISION AND ORDER

 

HOLDING

Decision of the Clay Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.The Hearing Officer finds that the subject parcels were incorrectly classified as agricultural property and assessed at 12% of value.The proper classification of the subject parcels is commercial.The proper assessment ratio on commercial properties is 32%.

The Hearing Officer finds Complainants did not rebut the presumption of correct valuation by the Board.

True value in money for the subject property in Appeal Number 09-32010 is $160,300 as determined by the Assessor and approved by the Board of Equalization.The corrected assessed value for Appeal Number 09-32010, for tax years 2009 and 2010, is $51,300.

True value in money for the subject property in Appeal Number 09-32011 is $161,800 as determined by the Assessor and approved by the Board of Equalization.The corrected assessed value for Appeal Number 09-32011, for tax years 2009 and 2010, is $51,780.

Complainant, Robert Bateman, appeared pro se.

Respondent appeared by Counsel, Patricia Hughes.

Case heard and decided by Senior Hearing Officer Luann Johnson.

ISSUE

The Commission takes this appeal to determine the true value in money and classification for the subject properties on January 1, 2009, and January 1, 2010.

SUMMARY

Complainants appeal, on the ground of overvaluation and classification, the decision of the Clay County Board of Equalization, which sustained the valuation and classification of the subject property.

In Appeal Number 09-32010, the Assessor determined an appraised value of $160,300 (assessed value of $19,240, as agricultural property).Complainants proposed a value of $15,900 (assessed value of $3,020, as residential property).

In Appeal Number 09-32011, the Assessor determined an appraised value of $161,800 (assessed value of $19,420, as agricultural property).Complainants proposed a value of $5,200 (assessed value of $990, as residential property).

A hearing was conducted on November 17, 2009, at the Clay County Administration Building, Courthouse Square, Liberty, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

Complainants entered a statement, Complainants’ Exhibit A, arguing that the most suitable economic use of the subject parcels was for residential purposes.Complainants further argued that the parcels should be valued at some prior residential value.No market evidence was presented which tended to support any opinion of value.Likewise, Complainant, Robert Bateman, testified at hearing that he wasn’t stating an opinion of value.

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Gary E. Maurer, appraiser for Clay County.The appraiser testified as to his appraisal of the subject properties.The Appraisal Report, Exhibit 1, was received into evidence to support the value originally determined by the Assessor and approved by the Board of Equalization.Mr. Maurer arrived at an opinion of value for the subject property in Appeal Number 09-32010 of $183,600, based upon a sales comparison approach to value.Mr. Maurer arrived at an opinion of value for the subject property in Appeal Number 09-32011 of $161,800, based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of properties deemed comparable to the subject properties.

FINDINGS OF FACT

1.Jurisdiction over these appeals is proper.Complainants timely appealed to the State Tax Commission from the decision of the Clay County Board of Equalization.

2.The subject properties are contiguous parcels located at the Southeast Corner of Northeast 68^th Street and North Oak in Gladstone, Missouri.Together they contain 1.22 acres.

3.The property in Appeal Number 09-32010 is identified as parcel number 13-618-00-03-023-00.The parcel contains 28,247 square feet and is unimproved.Complainants listed this property for sale up until shortly before the hearing date, along with the property in Appeal Number 09-32011, for $450,000 for commercial development.Complainants purchased the property sometime around 2001 for $120,000.At the time of purchase, the property was improved with an older home in poor condition.The home was subsequently demolished.This parcel fronts on North Oak Trafficway, a major thoroughfare.

4.The property in Appeal Number 09-32011 is identified as parcel number 13-618-00-03-021-00.The parcel contains 24,896 square feet and is unimproved.Complainants listed this property for sale up until shortly before the hearing date, along with the property in Appeal Number 09-32010, for $450,000 for commercial development.Complainants purchased the property sometime around 2001 for $35,000.This parcel does not have direct access to North Oak Trafficway but, rather, lies behind the parcel in Appeal Number 09-32010.

5.The subject parcels are adjacent lots in Block 7, BOLLING HEIGHTS, a subdivision of land in the City of Gladstone, Clay County, Missouri.(Resp. Ex. 1, pg. 14)As discussed below, the most suitable economic use of the subject properties is as an assemblage for commercial development.The fact that these properties are currently listed as separate parcels in the tax books requires that value be apportioned but does not limit the assessor’s ability to consider the parcels jointly for the purpose of classification.For purposes of discussion, “subject property” shall denote both parcels unless a single parcel is identified.

By law[7] “the assessor shall consolidate all lands owned by one person in a section, and all town lots owned by one person in a square or block, into one tract, lot or call, when practicable….”The assessor is encouraged to consolidate these parcels in the future.

6.Property which is not in use on the tax day, or which has no clear use on the tax day, is classified according to its most suitable economic use.[8]Most suitable economic use looks at:

(1) Immediate prior use, if any, of such property;

The subject properties are vacant and unused.The most recent use of Lot 9 was for residential purposes but said use ended in 2001.There is no record of any use of Lot 10.According to Mr. Maurer, no agricultural or horticultural use had been made of the property since before 1953.According to Mr. Maurer and the taxpayers, the property has been marketed in 2008 and 2009 as an assemblage for commercial development.The property had also been considered for commercial development as an assemblage in 2000.(Resp. Ex. 1, pg. 17).

Black’s Law Dictionary[9] defines “immediate” as “Occurring without delay [or] not separated by other persons or things [or] having a direct impact.”In this case, prior use of the property was separated from the present by a long period of dormancy.Therefore, we cannot find that the immediate prior use of the property was for residential development.The law, itself, contemplates that a period of dormancy will nullify this requirement.The law requires that we look to “immediate prior use, if any.”If we were required to go back to the last prior use, the requirement would not contain this qualifier.The law does not require that we examine periods of use that occurred prior to significant periods of vacancy.

(2)Location of such property;

The subject property is located at Northeast 68^th Street and North Oak Trafficway.The only residential property around the subject property lies to the southeast.All other surrounding properties are commercial. (Resp. Ex. 1, p. 17).The subject property lies directly on North Oak Trafficway, a major five lane thoroughfare in the City of Gladstone.

(3)Zoning classification of such property; except that, such zoning classification shall not be considered conclusive if, upon consideration of all factors, it is determined that such zoning classification does not reflect the immediate most suitable economic use of the property;

Current zoning is R1 (residential).Prior to 2001, prior owners had attempted to get the zoning changed to C3, which request for change was denied.Respondent suggests that a less intensive commercial zoning would have been acceptable.(Resp. Ex. 1, pg. 17-18).

(4)Other legal restrictions on the use of such property;

No evidence was presented of other legal restrictions on the use of the subject property.Northeast 68^th Street to the north is a private, vacated right-of-way.A private development agreement would have to be negotiated for access for ingress and egress on the north side of the property.However, the property has access to North Oak Trafficway through the contiguous parcel. (Resp. Ex. 1, pg. 32).

(5)Availability of water, electricity, gas, sewers, street lighting, and other public services for such property;

 

The property is improved with a sidewalk, curb, and curb cut with a gravel pad.All utilities are available.(Resp. Ex. 1, pg. 16).Improvements are suitable for either commercial or residential development.

(6)Size of such property; Property size makes it useful for either residential or commercial development.

(7)Access of such property to public thoroughfares; and

The property has access to North Oak Trafficway, a major five lane thoroughfare in the City of Gladstone.

(8)Any other factors relevant to a determination of the immediate most suitable economic use of such property.

7.There is no evidence that the parcels are being used for agricultural purposes or that the most suitable economic use of the property would be for agricultural purposes.Given all the above, it seems evident that the property should not be assessed as agricultural property.Mr. Maurer’s assertions that commercial property can be assessed at an agricultural rate is simply erroneous.Section 137.017.4, RSMo allows vacant and unused agricultural property to be assessed at 12%.There is no similar provision in law for vacant and unused commercial property.

8.There is very little evidence that the immediate most suitable economic use of the properties would be for residential improvement, as Complainant urges.Although some time at least 9 years ago, one lot had been used for residential purposes, there was no evidence of current residential use or any plans for residential development.The only residential property around the subject properties lies to the southeast.All other surrounding properties are commercial.In fact, Complainant, Robert Bateman, testified that as recently as a month prior to hearing he was marketing the properties as an assemblage for commercial development.Complainant’s own actions suggest that his current assertion of a most suitable economic use as residential is without credibility.

9.The subject property is in an area of primarily commercial development; good access is available to major thoroughfares; utilities are available; the assemblage size allows for commercial development; lower intensity commercial zoning is probable.There are no other legal restrictions on the use of the property for commercial development.The most suitable economic use of the subject property is commercial.

10.There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010.

11.Respondent’s appraiser presented eight sales of small acreages in support of the Board’s value.Those sales indicated adjusted square foot values of $7.54; $7.53; $7.54; $5.64; $5.23; $5.39; $9.53 and $3.64.All sales occurred prior to the tax day.Zonings were a mix of commercial and residential.Mr. Maurer estimated a value of $6.50 per square foot for the subject properties indicating a value for parcel 13-618-00-03-021.00 (Appeal Number 09-32011) of $161,800and a value for parcel number 13-618-00-03-023.00 (Appeal Number 09-32010) of $183,600.(Resp. Ex. 1, pgs. 37-42)Mr. Maurer introduced the evidence for the purpose of supporting the lower values proposed by the Board of Equalization.Mr. Maurer also presented sales occurring after the tax day which tend to indicate that values are going up rather than down.One one-acre tract at the 10200 block of North Oak Trafficway sold in March of 2009 for $570,000.(Resp. Ex. 1, pg. 38).

12.Complainant presented no evidence of market value and testified at hearing that he was not stating an opinion of value.He asked that the property be assessed at some past value calculation.No support for such value was entered into evidence.

13.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct value and assessment by the Board.However, this Hearing Officer notes that the County has inappropriately assessed the subject property by assigning a 12% assessment ratio to a property which must be assessed at 32%.Therefore, the Board’s market value is adopted but the assessed value is corrected to conform to statute.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[10]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[11]

Courts will take judicial notice of their own records in the same cases.[12]In addition, courts may take judicial notice of records in earlier cases when justice requires[13] or when it is necessary for a full understanding of the instant appeal.[14] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[15]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[16]

The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[17]

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[18]It is the fair market value of the subject property on the valuation date.[19]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

3.A reasonable time is allowed for exposure in the open market.

4.Payment is made in cash or its equivalent.

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[20]

 

Duty to Investigate

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[21]

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[22]

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[23]

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[24]

Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[25]

Assessment Levels

Section 137.115.5, RSMo 2000 provides:All subclasses of real property, as such subclasses are established in section 4(b) of article X of the Missouri Constitution and defined in section 137.016, shall be assessed at the following percentages of true value:

(1)For real property in subclass (1) [residential], nineteen percent,

(2)For real property in subclass (2), [agricultural and horticultural] twelve percent; and

(3)For real property in subclass (3), [utility, industrial, commercial, railroad, and other real property] thirty-two percent.

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[26]

Complainants’ Burden of Proof

There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[27]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[28]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[29]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[30]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[31]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[32]

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[33]

Complainants Failed to Prove Misclassification

In order to prevail, Complainants needed to demonstrate that the immediate most suitable economic use of this vacant and unused property was more properly residential rather than commercial.Complainants argue that the zoning, access and utilities were not suitable for commercial development; and that the prior use of the property had been residential; and therefore, the immediate most suitable economic use for the property was for residential development.The very fact that Complainants were actively marketing the property for commercial development would suggest that their arguments against commercial development as the immediate most suitable economic use, are flawed.Nor is the Hearing Officer persuaded that the rejection of the C-3 zoning change requested in 2000 is conclusive on the issue of whether or not the subject properties can be rezoned for a lower intensity commercial use.Clearly, the City does not object to commercial development along this stretch of North Oak Trafficway.Properties on the North, South and West are all zoned C-1 and CP1 for local business districts. (Resp. Ex. 1, pg. 17).In light of all the evidence, it appears more likely than not that the immediate most suitable economic use of the subject properties is as an assemblage for commercial development.Complainants have failed to rebut the presumption in favor of the Board of Equalization.

Respondent Proves Value

Respondent presented substantial and persuasive evidence in support of the value initially determined by the Assessor and approved by the Board of Equalization.

Respondent Erred in Applying Assessment Ratio

Respondent valued the subject parcels using comparable sales of commercial properties.But, for some reason, concluded that it was appropriate to apply a 12% assessment ratio to a commercial property.

When questioned by the Hearing Officer, the appraiser stated:“The State, in 1985, 1986, through a couple of House Bills, said that the assessor’s office could value property at its highest and best use at fair market value, and give it a 12% assessment and it was basically set for the developers because in the state of Missouri all commercial property has a surtax and they didn’t feel the developers should be penalized for having vacant ground that is just sitting there doing absolutely nothing.They said to give them a 12% assessment rather than a 19% or 32%”.

The appraiser needs to review the law.Real property in subclass 3 is assessed at 32% of market value.[34]

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Clay County for the subject tax day is SET ASIDE.

The Board’s market value for the subject property in Appeal Number 09-32010, for tax years 2009 and 2010 is affirmed at $160,300.The Clerk is ORDERED to place an assessed value of $51,300 on the books for tax years 2009 and 2010.

The Board’s market value for the subject property in Appeal Number 09-32011, for tax years 2009 and 2010 is affirmed at $161,800.The Clerk is ORDERED to place an assessed value of $51,780 on the books for tax years 2009 and 2010.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [35]

The Collector of Clay County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

Luann Johnson

Senior Hearing Officer

State Tax Commission of Missouri

 

ROBERT & DONNA BATEMAN,)

)

Complainants,)

)

v.)Appeal Nos.09-32008 & 09-32009

)

CATHY RINEHART, ASSESSOR,)

CLAY COUNTY, MISSOURI,)

)

Respondent.)

 

 

ORDER

AFFIRMING HEARING OFFICER DECISION

UPON APPLICATION FOR REVIEW

 

On December 22, 2009, Senior Hearing Officer Luann Johnson entered her Decision and Order (Decision) setting aside the assessments by the Clay County Board of Equalization.[1]

Respondent filed her Application for Review of the Decision.Complainants filed their Response.Respondent filed her Reply.

CONCLUSIONS OF LAW

Standard Upon Review

The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[2]The Hearing Officer as the trier of fact may consider the testimony of witnesses and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the testimony of witnesses but may believe all or none of their testimony and accept it in part or reject it in part.[3]The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[4]

DECISION

A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[5]

Respondent asserts that the only issue in the case is whether the subject property[6] is “vacant and unused land” within the meaning of Section 137.017.4, RSMo, or is “used for agricultural purposes” within the meaning of Section 137.016 RSMo.The Decision provides the simple answer to the issue.The evidence established that the subject parcels had been used for hay production in 2007, 2008 and 2009.A fact not disputed by Respondent.

Respondent’s argument essentially rests upon claim that agricultural use is not permitted in the commercial zoning on the property.That was not a fact established at the evidentiary hearing.No copy of any applicable zoning ordinances were introduced into evidence at the hearing to establish what were or were not permitted uses and activities on the two parcels by the respective municipalities.Respondent’s Reply for the first time by way of two Affidavits dated more than four months after the close of the evidentiary hearing raises this issue.

The Hearing Officer could not have erred on this point, as she had no evidence in the record to establish what, if any, impact the zoning of the subject parcels might have on the harvesting of hay.Nor does the Commission have any evidence from the record on this point.The best evidence on this issue is not the interpretation of city ordinances by two city employees. The best evidence would have been a complete copy of the existing zoning ordinances applicable to the properties under appeal as of the applicable times when hay was harvested and submitted at the evidentiary hearing.The two affidavits tendered after the close of the evidentiary record as exhibits to Respondent’s Reply are not now permitted to come into the evidentiary record.The Commission’s review of the Decision must be based upon the evidence in the record, not additional evidence that one party seeks to present without benefit of objection or cross-examination by the opposing party.

Whatever the actual zoning ordinance may mandate, it does not alter the fact that hay has been harvested from the subject properties during 2007, 2008 and 2009.The plain language of the controlling statute[7] mandates for assessment purposes real property “…devoted primarily to the raising and harvesting of crops; …” is to be classified as agricultural property.Cutting of hay constitutes the raising and harvesting of a crop.Even if the use of the properties in 2007, 2008 and 2009 was contradictory to a municipal ordinance, there is no provision in the assessment statutes which establishes that classification is to be denied based upon an allegation of ordinance violation by a taxpayer.

Respondent’s argument as to an agricultural activity versus an agricultural use is not well taken.Because the subject property meets the statutory definition of agricultural property, it

must be assigned to the appropriate agricultural grade.[8]The parties did not dispute that agricultural land productive grade 7 was the proper valuation for the subject tract.[9]

Respondent’s reliance on the Decision in Giddens v. Kessinger[10] is misplaced for two reasons.There was no argument advanced in Giddens that the property should not be valued at its commercial fair market value, as opposed to being placed in the proper agricultural land productive grade.Complainant in Giddens conceded to the market value of the property for commercial development but sought the 12% assessment.Such is not the case in the present appeals.In the second place, the Hearing Officer in Giddens should have sua sponte investigated[11] as to the proper agricultural land grade and applied it in order to properly assess the property.

Finally, the argument under the heading – BROAD IMPLICATIONS OF THIS DECISION presents nothing of substance in this case.A hearing officer is required to apply the appropriate law to the facts in the record.That is what was correctly done in this instance.The undisputed and controlling fact is that on the assessment date of January 1, 2009, the subject property had been in use for two years harvesting a hay crop and that use continued in 2009.Based upon that fact, the subject tracts must be valued under the agricultural land productive value and not at a commercial market value.

The Hearing Officer did not err in her determinations as challenged by Respondent.The subject tracts meet the statutory requirements to be valued at the agricultural land productive value and assessed at 12% of that value.

ORDER

The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, 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, RSMo within thirty 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, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of Clay 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 April 13, 2010.

STATE TAX COMMISSION OF MISSOURI

Bruce E. Davis, Chairman

Jennifer Tidwell, Commissioner

 

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Clay County Board of Equalization sustaining the assessment made by the Assessor in Appeal Number 09-32008 is SET ASIDE.Hearing Officer finds Complainants did rebut the presumption of correct assessment by the Board. The correct classification of the subject parcel on January 1, 2009, was agricultural.The correct agricultural grade is 7.The correct productive use value is $75 per acre.Productive use value for Appeal Number 09-32008for tax years 2009 and 2010 is set at $150, agricultural (2 acres at $75/acre) assessed value of $20.

Decision of the Clay County Board of Equalization sustaining the assessment made by the Assessor in Appeal Number 09-32009 is SET ASIDE.Hearing Officer finds Complainants did rebut the presumption of correct assessment by the Board. The correct classification of the subject parcel on January 1, 2009 was agricultural.The correct agricultural grade is 7.The correct productive use value is $75 per acre.Productive use value for Appeal Number 09-32009for tax years 2009 and 2010 is set at $97, agricultural (1.3 acres at $75/acre) assessed value of $10.

Complainant appeared pro se.

Respondent appeared by Counsel, Patricia Hughes.

Case heard and decided by Senior Hearing Officer Luann Johnson.

ISSUE

The Commission takes these appeals to determine the true value in money for the subject properties on January 1, 2009, and January 1, 2010.

SUMMARY

These two parcels are contiguous and are only treated as separate parcels because they are separated by municipal boundary lines.The parcel in Appeal Number 09-32008 is located in the City of Kansas City while the parcel in Appeal Number 09-32009 is located in the City of Gladstone.For the purposes of hearing and decision, these two parcels will be subject to the same findings of fact and conclusions of law.

Complainants appeal the decision of the Clay County Board of Equalization, which sustained the valuation of the subject properties.The Assessor determined an appraised value of $233,000 (assessed value of $27,960) on Appeal Number 09-32008.The Assessor determined an appraised value of $141,500 (assessed value of $16,980) on Appeal Number 09-32009.At hearing Respondent’s appraiser asserted an appraised value of $575,000.Complainants propose a value of $200.A hearing was conducted on November 17, 2009, at the Clay County Administration Building, Courthouse Square, Liberty, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainants’ Evidence

 

Respondent’s Evidence

Respondent placed into evidence the testimony of Mr. Gary E. Maurer, appraiser for Clay County.The appraiser testified as to his appraisal of the subject property.The Appraisal Report, Exhibit A, of Mr. Maurer was received into evidence.Mr. Maurer arrived at an opinion of value for the subject property of $575,000 based upon a sales comparison approach to value.In performing his sales comparison analysis, the appraiser relied upon the sales of properties deemed comparable to the subject properties.

FINDINGS OF FACT

1.Jurisdiction over these appeals is proper.Complainants timely appealed to the State Tax Commission from the decisions of the Clay County Board of Equalization.

2.The subject properties are located at Northwest 68^th Street and North Broadway Avenue.Appeal Number 09-32008 is located in Kansas City, Missouri.The property is identified by parcel number 13-516-00-04-006.00.The property consists of an unimproved two acre tract.Appeal Number 09-32009 is located in Gladstone, Missouri.The property is identified by parcel number 13-516-00-04-005.00.The property consists of an unimproved 1.3 acre tract.

3.Complainants presented evidence which established that the subject parcels had been used for hay production in 2007, 2008 and 2009. (Complainants’ Exhibits 2, 3, 4).Complainants’ evidence is substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish agricultural use of the property.

4.Complainants and Respondent agree that the proper grade for this property is grade 7.(Complainants’ Exhibit 1, Respondent’s Exhibit A, page 32).Grade 7 carries a productive use value of $75.(Respondent’s Exhibit A, page 32, 12 CSR 30-4.010).

5.Correct true value for AppealNumber 09-32008 is $150.(2 acres at $75/acre.)

6.Correct true value for AppealNumber 09-32009 is $97.(1.3 acres at $75/acre.)

7.Respondent’s evidence is not substantial and persuasive.Respondent’s appraiser testified that he was prohibited from assigning agricultural grades to the properties because of a Tax Commission directive prohibiting the use of productive use valuations on parcels smaller than 5 acres which do not adjoin agricultural parcels or which have a grade of 6 or higher.(Respondent’s Exhibit A, page 32, pages 68-71).To the best of this Hearing Officer’s knowledge, based upon nearly 20 years of service with the State Tax Commission, these “Logic Tables” were not created by the State Tax Commission.Nor are these “Logic Tables” anywhere identified, on their faces, as creations of the State Tax Commission.(Respondent’s Exhibit A, pages 68-71).Further, these “Logic Tables” are nowhere supported by statute or case law.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[12]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[13]

Courts will take judicial notice of their own records in the same cases.[14]In addition, courts may take judicial notice of records in earlier cases when justice requires[15] or when it is necessary for a full understanding of the instant appeal.[16] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[17]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[18]

The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[19]

Agricultural Land

Under Missouri statutory law, property shall be classified as agricultural and horticultural property when “real property [is] used for agricultural purposes and devoted primarily to the raising and harvesting of crops . . .”Section 137.016.1(2), RSMo.The classification is determined by the actual use put to the property.[20]Cutting hay is an agricultural activity and such activity is sufficient to cause real property to be classified as “agricultural property”.[21]

Standard for Valuation

Section 137.017.1, RSMo provides “For general property assessment purposes, the true value in money of land which is in use as agricultural and horticultural property, as defined in Section 137.016, shall be that value which such land has for agricultural or horticultural use. . .”

Land Grades

Section 137.021.1, RSMo provides “ . . . .the state tax commission shall promulgate by regulation and publish a value based on productive capability for each of the several grades of agricultural and horticultural land. . . .”

Most Suitable Economic Use

The eight point analysis to determine the “most suitable economic use” [under Section 137.016.5, RSMo] is only appropriate for property “for which a determination as to its classification cannot be made under the definitions set out in subsection 1.”In cases where the actual use of the property ­­– raising and harvesting hay – dictates the classification, there is no need to resort to a subsection 5 analysis.[22]

Duty to Investigate

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[23]

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[24]

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[25]

Complainants’ Burden of Proof

In order to prevail, Complainants must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[26]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[27]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[28]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[29]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[30]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[31]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[32]

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[33]

Decision

Complainants have met their burden of proof.They established that the subject parcels had been used for hay production since at least 2007 up to and including the tax day.Once agricultural use is established, the only remaining issue is the appropriate land grade.In this instance, both parties agree that the appropriate grade for the subject property is grade 7.Grade 7 land is valued at $75 per acre.

Respondent’s evidence fails because Respondent’s appraiser read more into the law than actually exists.By using “Logic Tables,” Respondent’s appraiser excludes small acreages from agricultural classification if they are not adjacent to other agricultural parcels or if they are at grade 6 or higher.However, nothing in the statutes allows for exclusion of small acreages.

We frequently hear it said that property should be valued “in exchange” rather than “in use.”However, our statutes require that classification be based upon actual use, if that use if readily ascertainable.Thus Section 137.016.1(1) provides that property being used for residential living should be classified as residential.Section 137.016.1(2) provides that property used for agricultural purposes should be classified as agricultural.Section 137.016.1(3) provides that property used for commercial, industrial, manufacturing, and so forth, should be classified as commercial.Only when a determination as to classification cannot be made under the definitions in the above subsections, is the assessor authorized to conduct a Section 137.016.5 “most suitable economic use” analysis.

ORDER

The assessed valuations for the subject parcels as determined by the Assessor and sustained by the Board of Equalization for Clay County for the subject tax day is SET ASIDE.

The assessed value for the subject property in Appeal Number 09-32008 for tax years 2009 and 2010 is set at $20.The assessed value for the subject property in Appeal Number 09-32009 for tax years 2009 and 2010 is set at $10.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [34]

The Collector of Clay County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

Luann Johnson

Senior Hearing Officer

 

 

 

 

 

 

 

ADELAIDA GERHARDT,)

)

Complainant,)

)

v.) Appeal Number 09-32000

)

CATHY RINEHART,ASSESSOR,)

CLAY COUNTY, MISSOURI,)

)

Respondent.)

 

 

DECISION AND ORDER

 

HOLDING

 

Decision of the Clay County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Hearing Officer finds Complainant did not rebut the presumption of correct assessment by the Board, but Respondent did rebut that presumption. True value in money for the subject property for tax years 2009 and 2010 is set at $224,000, residential assessed value of $42,560.

Complainant appeared by counsel, Caroline L. Boyd.

Respondent appeared by Counsel, Patricia Hughes, Associate County Counselor.

Case heard and decided by Senior Hearing Officer Luann Johnson.

ISSUE

The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009, and January 1, 2010.

SUMMARY

Complainant appeals, on the ground of overvaluation, the decision of the Clay County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $230,000 (assessed value of $43,790, as residential property).Complainant proposed a value of $192,000 (assessed value of $36,480).A hearing was conducted on November 17, 2009, at the Clay County Administration Building, Liberty, Missouri.

The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.

Complainant’s Evidence

Complainant placed into evidence the testimony of Ms. Janet E. Pryor, a residential appraiser.Ms. Pryor testified as to her appraisal of the subject property.The Appraisal Report, Exhibit 1, was received into evidence.Ms. Pryor arrived at an opinion of value for the subject property of around $194,000.Ms. Pryor had failed to make her appraisal report effective as of January 1, 2009, and, thus, had to attempt some last minute adjustments during the hearing.Ms. Pryor’s opinion of value was based primarily upon the sales comparison approach to value.In performing her sales comparison approach, Ms. Pryor relied upon the sale of three properties which she deemed to be comparable to the subject property.

Complainant also entered the following Exhibits:

 

Respondent’s Evidence

Respondent placed into evidence the testimony of Ms. Sherri Deiss, appraiser for Clay County.The appraiser testified as to her appraisal of the subject property.The Appraisal Report, Exhibit A, was received into evidence.Ms. Deiss arrived at an opinion of value for the subject property of $224,000 based upon a sales comparison approach to value.In performing her sales comparison analysis, the appraiser relied upon the sales of four properties and the listing of one property deemed comparable to the subject property.

Respondent also entered the following Exhibits:

 

FINDINGS OF FACT

1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Clay County Board of Equalization.

2.The subject property is located at 4902 NE 60^th Terrace, Kansas City, Missouri.The property is identified by parcel number 14-707-00-06-004.00.The property consists of a 14,744 square foot lot improved by a one-story brick faced, ranch, single-family structure of good quality construction.The house is 14 years old and appears to be in good condition.The residence has a total of 7 rooms, which includes 3 bedrooms,2.5 baths, and contains 2,368 square feet of living area.There is a full unfinished basement with an attached two-car garage, and a two-car basement garage. There was no listing or sale of the property noted within three years prior to the tax date of January 1, 2009.

3.There was evidence of property improvement between January 1, 2009, and January 1, 2010; the exact amount of which was not ascertainable.The improvements included interior and exterior painting and replacement and repair of the French door to the deck.The improvements are not significant enough to warrant a change in value for tax year 2010.

4.Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, to be $194,000, as proposed.Complainant’s appraiser failed to utilize the correct valuation date and had to make corrections to her appraisal report to account for the changes in market conditions, at the hearing.But, more significantly, Complainant’s appraiser utilized proposed comparable sales that did not represent the best comparable sales available in the market.Complainant’s comparable sales required gross adjustments of 37.2%, 33.7% and 39.2%.Complainant’s appraiser testified that these adjustments exceeded the normal adjustments preferred in the market.These excessive adjustments certainly suggest that the properties selected by Complainant’s appraiser were not truly “comparable” to the subject property.In contrast, Respondent’s appraiser presented comparable sales that required gross adjustments of 13.1%, 12.2%, 17.2% and 10.4%.Clearly, Respondent’s comparable sales were more similar to the subject property that the comparable sales proposed by Complainant.

5.The properties relied upon by Respondent’s appraiser in performing her appraisal were comparable to the subject property for the purpose of making a determination of value of the subject property.The four sale properties and one list property were located within 1.5 miles of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other amenities of comparability.

6.The comparables were described as follows:

Comparable 1 (5205 NE 69^th Terrace, Kansas City, Missouri) sold in October, 2008 for $210,080.The property is located 1.1 miles north of the subject property.This property consists of an 11,928 square foot lot improved by a one-story single-family structure of good quality construction.The house is 6 years old and appears to be in good condition.The residence has a total of 7 rooms, which includes 3 bedrooms, 2 baths, and contains 1,929 square feet of living area.There is a full unfinished basement.There is an attached two-car garage.

Comparable 2 (3213 NE 69^th Street, Gladstone, Missouri) sold in May, 2007 for $224,900.The property is located 1.45 miles northwest of the subject property.This property consists of a 14,162 square foot lot improved by a one-story single-family structure of good quality construction.The house is 21 years old and appears to be in good condition.The residence has a total of6 rooms, which includes3 bedrooms, 2.5 baths, and contains 2,267 square feet of living area.There is a full unfinished basement and an attached two-car garage.

Comparable 3 (4009 NE 63^rd Street, Gladstone, Missouri) sold in October, 2007 for $212,000.The property is 0.55 miles northwest of the subject property.This property consists of a 10,240 square foot lot improved by a one-story single-family structure of good quality construction.The house is 23 years old in and appears to be in good condition.The residence has a total of6 rooms, which includes 3 bedrooms, 2 baths, and contains 1,868 square feet of living area.There is a full unfinished basement and an attached two-car garage.

Comparable 4 (6112 N. Cypress Ave., Kansas City, Missouri) sold in April, 2009 for $230,000.The property is located 0.26 miles northwest of the subject property.This property consists of a 12,008 square foot lot improved by a one-story single-family structure of good quality construction.The house is 15 years old and appears to be in good condition.The residence has a total of 9 rooms, which includes 4 bedrooms, 2.5 baths, and contains 2,409 square feet of living area.There is a full unfinished basement and an attached two-car garage.

Comparable [Listing] 5 (4004 NE 61^st Terrace, Gladstone, Missouri) is listed for $224,950.The property is 0.56 miles west of the subject property.This property consists of a 10,836 square foot lot improved by a one-story single-family structure of good quality construction.The house is 12 years old in and appears to be in good condition.The residence has a total of 7 rooms, which includes 3 bedrooms, 2 baths, and contains 1,911 square feet of living area.There is a full unfinished basement and an attached three-car garage.

7.The appraiser made various adjustments to the comparable properties for differences which existed between the subject and each comparable.Time adjustments were based upon a paired sales analysis.All adjustments appear to be appropriate to bring the comparables in line with the subject for purposes of the appraisal problem.

8.The net adjustments for Comparable 1 amounted to $15,475 or 7.4% of the sales price.The net adjustments for Comparable 2 amounted to -$2.475or 1.1% of the sales price.The net adjustments for Comparable 3 amounted to +$15,500 or 17.2% of the sales price.The net adjustments for Comparable 4 amounted to -$6,000 or 10.45.the net adjustments for Comparable [Listing] 5 amounted to +$15,925 or 7.1%.

9.The adjusted sales prices for the comparables calculated to $225,555, $222,425, $227,500, $224,000 and $240,875, respectively.The appraiser concluded on a $224,000 value which calculated to a value per square foot of $94.59 compared with the sales prices per square foot of living area for the comparables of $108.91, $99.21, $113.49, $95.48 and $117.71. The comparison of the value per square foot provides a validation check for the appraisal, to demonstrate that the indicated value is consistent with the market for properties such as the subject.

10.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, and January 1, 2010, to be $224,000.

CONCLUSIONS OF LAW AND DECISION

Jurisdiction

The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.The hearing officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious.[1]

Official and Judicial Notice

Agencies shall take official notice of all matters of which the courts take judicial notice.[2]

Courts will take judicial notice of their own records in the same cases.[3]In addition, courts may take judicial notice of records in earlier cases when justice requires[4] or when it is necessary for a full understanding of the instant appeal.[5] Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts.[6]

Presumptions In Appeals

There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[7]

The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board, even if simply to sustain the value made by the Assessor, is accepted as true only until and so long as there is no substantial evidence to the contrary.

The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[8]

Standard for Valuation

Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so.[9]It is the fair market value of the subject property on the valuation date.[10]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.

Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:

1.Buyer and seller are typically motivated.

 

2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.

 

3.A reasonable time is allowed for exposure in the open market.

 

4.Payment is made in cash or its equivalent.

 

5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.

 

6.The price represents a normal consideration for the property sold unaffected by special financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.[11]

 

Duty to Investigate

In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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.The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[12]

Weight to be Given Evidence

The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled.The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide.[13]

Trier of Fact

The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[14]

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[15]

Missouricourts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value.[16]

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto.

The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence.[17]

Respondent’s Burden of Proof

Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[18]

Complainant’s Burden of Proof

In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2009.[19]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[20]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[22]

Owner’s Opinion of Value

The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]“Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”[25]

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”[26]

Respondent Proves Value

Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2009, to be $224,000.Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach.The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.

The adjustments made the Ms. Deiss were consistent with generally accepted guidelines for the appraisal of property of the subject’s type.Ms. Deiss examined the interior and exterior of the subject property.The adjustments properly recognized the quality of construction and condition of the subject property and accounted for the various differences between the subject and each comparable.The net adjustments to the sale properties fell within a very narrow range from 1.1% to 7.4%.Even the gross adjustments were in a very acceptable range from 7.1% to 17.2%.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forClay County for the subject tax day is SET ASIDE.

The assessed value for the subject property for tax years 2009 and 2010 is set at $42,560.

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing date shown in the Certificate of Service.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.

Failure to state specific facts or law upon which the appeal is based will result in summary denial. [27]

The Collector of Clay County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of 139.031.8 RSMo.

Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed.Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.

SO ORDERED December 22, 2009.

STATE TAX COMMISSION OFMISSOURI

 

 

_____________________________________

Luann Johnson

Senior Hearing Officer

 

 

 

Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22^nd day of December, 2009, to:Adelaida Gerhardt, 409 NE 60^th Terrace, Kansas City, MO 64119, Complainant; Patricia Hughes, Associate County Counselor, 17 W. Kansas, Suite 3, Attorney for Respondent; Cathy Rinehart, Assessor, Tom Brandom, Clerk, Sandra Reeves, Collector, Administration Building, 1 Courthouse Square, Liberty, MO 64068.

 

 

 

___________________________

Barbara Heller

Legal Coordinator