JOSEPH HILL, SR,)

)

Complainant,)

)

v.) Appeal Number 11-72001

)

JUDY HARMON, ASSESSOR,)

MONROE COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decision of the Monroe County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2011 is set at $10,900, residential assessed value of $2,070.True value in money for the subject property for tax year 2012 is set at $13,600, residential assessed value of $2,580.

Complainant appeared pro se.Respondent appeared pro se.

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

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Monroe County Board of Equalization, which reduced the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.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 Monroe County Board of Equalization.A hearing was conducted on November 17, 2011, at the Monroe County Courthouse, Paris, Missouri.

2.Assessment.The Assessor appraised the property under appeal at $28,700, a residential assessment of $5,450.[1]The Board of Equalization reduced the value to $24,700, an assessed value of $4,690.

3.Subject Property.The subject property is located at 117 Second Street, Monroe City, Missouri.The property is identified by map parcel number 1-4.0-18-2-10-2.The property consists of .20 of an acre lot.It is improved by a 1,256 square foot, base area, 1,915 adjusted area, two-story frame house, with vinyl siding.The structure was built in1890 and has three bedrooms and two baths.There is a 10 x 12 utility building, built in 1970 on the property.

4.Complainant’s Evidence.Complainant testified on his own behalf and gave his opinion of value to be $10,400, based upon his purchase of the property in July, 2010.The following exhibits were received into evidence on behalf of Complainant:

Complainant purchased the property in July, 2010 from CitiFinancial.The property had been foreclosed.It had been marketed for sale both before and after foreclosure.It was listed for $9,900, another prospective purchaser bid on the property and Complainant bid $10,400 and purchased the property at that price.[2]

During 2010 Complainant made some roof repairs to the house in the amount of $650 – $700.It is determined that these repairs added a contributory value to the subject property of $500.

There was evidence of new construction and improvement from January 1, 2011, to January 1, 2012.Complainant had done plumbing and electrical repairs in the amount of $3,000.Therefore the assessed value for 2012 must be adjusted to account for the contributory value that these repair improvements made to the subject property for the 2012 assessment.[3]

Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011, to be $10,900, an assessed residential value of $2,070.

The true value in money for the property as of January 1, 2012, is determined to be $13,600, based upon the $3,000 in plumbing and electrical repairs adding a contributory value of $2,700 to the subject’s fair market value.The assessed value for 2012 is $2,580.

See, Complainant’s Evidence Persuasive, infra.

5.Respondent’s Evidence.Respondent testified in her own behalf.The following exhibits were received into evidence on behalf of Respondent:

Respondent’s evidence was not persuasive to establish the true value in money for the property under appeal to be $28,700 as proposed at hearing.See, Respondent’s Evidence Not Persuasive, infra.

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.[4]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[5]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[6]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[7]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight,” the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[8]The presumption of correct assessment is rebutted when the taxpayer or the Respondent, when advocating a value different from the Board value, 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.[9]Upon presentation of the Complainant’s evidence[10] the presumption in this appeal disappeared as to Complainant’s case.Respondent’s evidence did not constitute substantial and persuasive evidence to rebut the presumption and establish the value of $28,700 advocated at the evidentiary hearing.

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.[11]True value in money is defined in terms of value in exchange and not value in use.[12]It is the fair market value of the subject property on the valuation date.[13]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.[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]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.[16] 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.[17]

Complainant’s Evidence Persuasive

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, 2011.[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]An assessment is unlawful, unfair and improper if the evidence establishes the fair market value to be different than that established by the Board or the Assessor and the Board in those instances where the Board affirms the Assessor’s value.

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]

Persuasiveness of Complainant’s Exhibits

The exhibits received on behalf of Complainant had various levels of persuasiveness relative to a conclusion of value for the property under appeal.The Hearing Officer will briefly review the exhibits.

Exhibit A – Real Estate Agent Listing for Subject.This exhibit was given some weight because it verifies Complainant’s testimony relative to the property being listed with a realtor for sale and that the property had been offered at a higher price, but would not command that price.

Exhibit B – Counter Offer/Addendum & Settlement Statement.This exhibit was given some weight as it also verifies Complainant’s purchase.

Exhibit C – Special Warranty Deed.This exhibit provides no relevant information that addresses the issue of fair market value, as it only established the transfer of the subject property.There was no dispute that Complainant had purchase the property in July, 2010.

Exhibit D – Condition/Maintenance Problems of the Subject.This exhibit was given considerable weight to establish that at the time of Complainant’s purchase the house was in need of significant repairs.In order for Complainant to be able to either rent the property or to resell, it will require a further financial outlay to bring the condition to a rentable status or to a position for sale to an occupant.The exhibit details factors which Mr. Hill as purchaser took into account in arriving at an amount to offer for the property.

Exhibit E – Exterior Photographs of the Subject.This exhibit was given weight as it showed exterior damage to siding and gutters, and lack of porch ceiling.

Exhibit F – Locator Map/Photographs of Neighboring Properties.This exhibit was not given any weight to establish value.The existence of nearby run-down and boarded up properties is certainly a factor that impacts on the value of Complainant’s property.However, the photographs provide no basis upon which the Hearing Officer can conclude the extent to which this external factor has impacted value.It is sufficient that Mr. Hill apparently took the existence of these properties into account in arriving at an amount to offer for the property.

Exhibit G – STC Decision.No weight was given to the STC Decision in Harrington v. Harmon, Appeal No. 09-72000.The case presented no relevant information to establish the true value in money of the subject as of January 1, 2011.

Exhibit H – BOE Decision Letter, dated 7/27/11.The BOE Decision has no probative value on the issue of true value in money.It is required to be filed with the Complaint for Review of Assessment, as it was in this appeal, to establish that a taxpayer has exhausted that part of their administrative remedy.

Exhibit I – Questions Asked by Assessor at BOE.The exhibit has no probative value as to what a willing buyer and seller would have agreed to as the purchase price on January 1, 2011, for the property under appeal.The Hearing Officer does not review the actions of the BOE or what evidence was presented before the Board.In a hearing before the Commission a taxpayer does not need to demonstrate what did or did not take place at the BOE meeting.It is irrelevant to a determination of true value in money, since the Commission takes the appeal de novo.

Exhibit J – Complainant’s Statement.This document has probative value to the extent that it expresses the taxpayer’s position relative to the case.It has particular relevance as it established the background and foundation as to Mr. Hill’s past experience in the purchase and sale of such properties.It was further relevant as it established that the price offered by Mr. Hill was based on the condition of the house and the condition of the neighborhood.

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]Mr. Hill’s opinion of value is based upon the purchase price of the property in July, 2010.The property had been listed on the open market both before and after foreclosure.It had been listed at $14,999 and was reduced to $9,900.It was offered to the public for purchase through a real estate agency.[24]

The purchase price in a market transaction constitutes a proper element and a proper foundation to establish an owner’s opinion of value.A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[25]Notwithstanding, that Complainant’s purchase was of a property after it had been foreclosed, there is no evidence which rebuts the presumption of the July, 2010 transaction being a market transaction.Accordingly, the purchase price from the July, 2010 transaction established the basis for the value of the property.

The repair improvements made in 2010 after purchase added to the value of the property as of January 1, 2011.Likewise the repair improvements made during 2011 increased the subject’s value for the 2012 assessment.The basis for both of these adjustments to the sale price was addressed in Finding of Fact 4, supra.

Conclusion

Complainant met his burden of proof to both rebut the presumption of correct assessment and to establish the true value in money for the property as of January 1, 2011, and for January 1, 2012, based upon repair improvements during 2011.The value must be set accordingly as detailed in Finding of Fact 4, supra.

Respondent’s Evidence Not Persuasive

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.[26]Respondent elected to present evidence to attempt to establish the value that had originally been placed on the property before the Board action.This, of course, is the prerogative of an assessor in an appeal before the commission.The assessor may also simply elect to stand on the Board presumption and present no evidence or evidence in support of that value.Since the Respondent was advocating an increase in the value of the property back to $28,700, the Hearing Officer feels it is appropriate to review the exhibits presented and provide the basis for the conclusion that the evidence would not support an increase in value to $28,700, not did the evidence rebut Complainant’s evidence to allow the Board presumption to stand.

Respondent’s Exhibits

Exhibit 1 – A: Assessor’s Summary.The summary addresses various matters that came up during the BOE meeting.One of the issues related to the amount that Mr. Hill had the property insured for.This issue was also the subject of testimony by both Mr. Hill and Ms. Harmon at the evidentiary hearing.The amount of insurance on a house does not establish its true value in money.Furthermore, the testimony on this point was found in hearsay on the part of both witnesses.The Hearing Officer found nothing of probative value on this point.

Respondent also presented information in this exhibit relative the appraised value which had been placed on two other properties which she deemed to be “comparison properties.”The problem with presenting of the assessor’s appraised value of properties which may indeed be comparable to the subject is that the properties have not sold, and accordingly there is no sale price to work from in attempting to establish value for the property under appeal.Furthermore, while the properties on such basic factors as age, and living area appear to be comparable to the subject, there is nothing provided as to the interior condition of these properties.As Respondent noted in this exhibit and during her testimony, interior inspections of properties are not part of the general review for reassessment.In general, there is no probative value for an assessor to present assessment information on similar or comparable properties that have not been the subject of a recent sale.

Exhibit 1-B: Complainant’s Typed Statement to the BOE.This document provided no relevant evidence to either rebut Complainant’s opinion of value, or to establish the true value in money for the subject to be $28,700 or $24,700.No probative value was given to this exhibit.

Exhibit 1-C: Notice of Change in Assessed Value.Unless there is a dispute as to the increase in value from one assessment cycle to the next, there is no probative value to the introduction of the change notice.

Exhibit 1-D:Subject’s Post-BOE Property Record Card.This exhibit only established the change in value that was made by the BOE.It had no probative value to establish a value of $28,700.The introduction of a property record card will not ordinarily rebut substantial and persuasive evidence that establishes fair market value prima facie.Such is the case in this instance.The document only verifies that the Board, as stated in its Decision Letter, set the depreciation factor at 25% good for the mass appraisal replacement cost new less depreciation value.No probative weight could be given to this exhibit in light of Complainant’s evidence.

Exhibit 1-E: MultiList Information of Subject.This exhibit had probative weight to verify, as Mr. Hill testified, that the property was listed for $9,900 and sold for $10,400.To the extent that Respondent wished to use the exhibit to establish the property being on the market for 32 days, the exhibit does that.However, Exhibit A established a different listing that had the listing price at $14,999.Complainant’s exhibit list and his testimony established that prior to foreclosure the property had been on the market for over a year, listed at the $14,999.

Exhibit 1-F:Photographs of Subject.This exhibit had probative weight to the extent is showed the exterior of the subject in 2011.

Exhibit 1-G:Photographs of the Comparison Properties.As addressed above relative to Exhibit 1-A, these homes while appearing from an exterior view to be similar to the subject, cannot be used to establish true value in money since there was no sale of either property at a time relevant to value date of January 1, 2011.Accordingly, no probative weight was given to this exhibit.

Exhibit 2:Sale of Comparable Property – 211 E. Summer.

Exhibit 3:Sale of Comparable Property – 208 Catherine.

Each of these exhibits contains a cover sheet, the purchaser’s sales letter for the property, a photograph and the property record card for the respective properties.Exhibit 2 establishes that the property sold in May, 2010 for $24,500.Exhibit 3 establishes that the property sold in July, 2009 for $31,500.

Assuming, without finding, that these properties would in fact have been deemed to be comparable to the subject for purposes of conducting an appraisal, the unadjusted sales prices of these two properties establishes a range of value from $24,500 to $31,500.Therefore, the unadjusted values would appear to provide support for the Board value, and also the Assessor’s original value. However, these are the unadjusted sales prices.

The critical factor of the subject’s condition cannot be compared to these two sales given the evidence in the record.There is no information as to the overall condition of either of these sales.Accordingly, it is impossible for the Hearing Officer to conclude an indicated value for the subject based upon the raw data on these two sales.Presenting information as to the sale price of a property and that contained in a property record card does not constitute an appraisal by the sales comparison approach.Therefore, no probative weight is given to either sale as establishing the true value in money for the subject as of January 1, 2011, or as rebutting Complainant’s evidence on the value of the subject property.

Conclusion

Respondent failed to meet her burden of proof to both rebut the presumption of correct assessment by the Board and to establish the true value in money for the property as of

January 1, 2011, to be $28,700 as asserted at hearing.

ORDER

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

The assessed value for the subject property for tax year 2011 is set at $2,070.

The assessed value for the subject property for tax year 2012 is set at $2,580.

Application for Review

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 application for review is based will result in summary denial. [27]

Disputed Taxes

The Collector of Monroe 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 29, 2011.

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 19^thday of December, 2011, to:Joseph Hill, 139 Sir Moss Lane, Fenton, MO 63026, Complainant; Talley Kendrick, Prosecuting Attorney, 300 N. Main, Third Floor, Paris, MO 65275, Attorney for Respondent; Judy Harmon, Assessor, 300 N. Main, Room 107, Paris, MO 65275; Sandra Francis, Clerk, 300 N. Main, Paris, MO 65275; Anita Dunkle, Collector, 300 N. Main, Room 101, Paris, MO 65275.

___________________________

Barbara Heller

Legal Coordinator

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

JOSEPH HILL, SR,)

)

Complainant,)

)

v.) Appeal No.11-72000

)

JUDY HARMON, ASSESSOR,)

MONROE COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decision of the Monroe County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED, upon voluntary dismissal of the appeal.True value in money for the subject property for tax years 2011 and 2012 is set at $25,200, residential assessed value of $4,790.Complainant appeared pro se.Respondent appeared pro se.

Decision and Order entered by Senior Hearing Officer W. B. Tichenor.

ISSUE

Complainant appealed, on the ground of overvaluation, the decision of the Monroe County Board of Equalization, which sustained the valuation of the subject property.The Commission took this appeal to determine the true value in money for the subject property on January 1, 2011.The Hearing Officer, upon voluntary dismissal by Complainant, 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 Monroe County Board of Equalization.A hearing was scheduled on November 17, 2011, at the Monroe County Courthouse, Paris, Missouri.

2.Dismissal by Complainant.Case was called with both Complainant and Respondent present.Complainant advised the Hearing Officer he was not going to pursue the appeal and wished to withdraw it.Hearing Officer informed Complainant that the assessed value would remain at $4,790.Complainant responded that he understood and wished the appeal to be dismissed.

CONCLUSION OF LAW

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]

ORDER

Upon Complainant’s dismissal of the appeal, the assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization forCounty for the subject tax day is AFFIRMED.

The assessed value for the subject property for tax years 2011 and 2012 is set at $4,790.

Disputed Taxes

The Collector of Monroe County, as well as the collectors of all affected political subdivisions therein, shall disburse the disputed taxes in accordance with the underlying assessment as affirmed by this Decision and Order.

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 29, 2011.

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 29^thday of December, 2011, to:Joseph Hill, 139 Sir Moss Lane, Fenton, MO 63026, Complainant; Talley Kendrick, Prosecuting Attorney, 300 N. Main, Third Floor, Paris, MO 65275, Attorney for Respondent; Judy Harmon, Assessor, 300 N. Main, Room 107, Paris, MO 65275; Sandra Francis, Clerk, 300 N. Main, Paris, MO 65275; Anita Dunkle, Collector, 300 N. Main, Room 101, Paris, MO 65275.

___________________________

Barbara Heller,

Legal Coordinator

Barbara.Heller@stc.mo.gov

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

TAMKO ROOFING PRODUCTS, INC.,)

)

Complainant,)

)

v.) Appeal Number 10-62506

)

CONNIE HOOVER, ASSESSOR,)

JASPER COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decision of the Jasper County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2010 is set at $3,157,000, assessed value as personal property of $1,052,000.Complainant appeared by Counsel, Brian Howes, Polsinelli Shugart, Kansas City, Missouri.Respondent appeared by Assistant Prosecuting Attorney, Jeremy Crowley.

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

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Jasper County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2010.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 Jasper County Board of Equalization.A hearing was scheduled for November 30, 2011, at the Jasper County Courthouse, Carthage, Missouri.On November 29, 2011, Counsel for Respondent email the Hearing Officer that Respondent waived the evidentiary hearing.The case was submitted for decision upon Complainant’s Exhibits.

2.Assessment.The Assessor appraised Complainant’s personal property at $11,346,414, assessed value of $3,781,760.[1]The Board sustained the assessment.

3.Subject Property.The subject property is located at 1030 N. Range Line Rd., Joplin, Missouri.The property is identified by Assessor’s Account Number 20-000829-0000.

The property consists of Complainant’s machinery, tools and equipment used in its roofing plant.[2]

4.Complainant’s Evidence.The following exhibits were received into evidence on behalf of Complainant.

Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2010, to be $3,157,000, assessed value of $1,052,000.

5.Respondent’s Evidence.Respondent did not file and exchange exhibits or written direct testimony.

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]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[4]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[5]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[6]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[7]The presumption of correct assessment is rebutted when the taxpayer 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]Upon presentation of the Complainant’s evidence[9] the presumption in this appeal disappeared.The case is decided free of the presumption.

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.[10]True value in money is defined in terms of value in exchange and not value in use.[11]It is the fair market value of the subject property on the valuation date.[12]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.[13]

Complainant’s appraiser valued the property under the concept of fair market value.[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]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.[16] Complainant’s appraiser valued the property under appeal utilizing both the cost and market approaches.[17]

Complainant Proves Value of $3,157,000

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, 2010.[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]

Complainant met its burden of proof and established the true value in money of the property under appeal to be $3,147,000 as of January 1, 2010.

ORDER

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

The assessed value for the subject property for tax year 2010 is set at $1,052,000.

Application for Review

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 application for review is based will result in summary denial. [22]

Disputed Taxes

The Collector of Jasper 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 29, 2011.

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 29^th day of December, 2011, to:Brian Howes, 120 W. 12^th Street, Suite 1600, Kansas City, MO 64105, Attorney forComplainant; Jeremy Crowley, Assistant Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Connie Hoover, Assessor, 302 S. Main Street, Carthage, MO 64836; Bonnie Earl, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.

___________________________

Barbara Heller

Legal Coordinator

Barbara.Heller@stc.mo.gov

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

TAMKO ROOFING PRODUCTS, INC.,)

)

Complainant,)

)

v.) Appeal Number 10-62505

)

CONNIE HOOVER, ASSESSOR,)

JASPER COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decision of the Jasper County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2010 is set at $6,324,000, assessed value as personal property of $2,108,000.Complainant appeared by Counsel, Brian Howes, Polsinelli Shugart, Kansas City, Missouri.Respondent appeared by Assistant Prosecuting Attorney, Jeremy Crowley.

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

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Jasper County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2010.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 Jasper County Board of Equalization.A hearing was scheduled for November 30, 2011, at the Jasper County Courthouse, Carthage, Missouri.On November 29, 2011, Counsel for Respondent email the Hearing Officer that Respondent waived the evidentiary hearing.The case was submitted for decision upon Complainant’s Exhibits.

2.Assessment.The Assessor appraised Complainant’s personal property at $13,380,048, assessed value of $4,459,570.[1]The Board sustained the assessment.[2]

3.Subject Property.The subject property is located at 601 North High St., Joplin, Missouri.The property is identified by Assessor’s Account Number 20-200100-0000.

The property consists of Complainant’s machinery, tools and equipment used in its roofing plant.[3]

4.Complainant’s Evidence.The following exhibits were received into evidence on behalf of Complainant.

Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2010, to be $6,324,000, assessed value of $2,108,000.

5.Respondent’s Evidence.Respondent did not file and exchange exhibits or written direct testimony.

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.[4]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[5]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[6]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[7]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[8]The presumption of correct assessment is rebutted when the taxpayer 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.[9]Upon presentation of the Complainant’s evidence[10] the presumption in this appeal disappeared.The case is decided free of the presumption.

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.[11]True value in money is defined in terms of value in exchange and not value in use.[12]It is the fair market value of the subject property on the valuation date.[13]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.[14]

Complainant’s appraiser valued the property under the concept of fair market value.[15]

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.[16]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.[17] Complainant’s appraiser valued the property under appeal utilizing both the cost and market approaches.[18]

Complainant Proves Value of $6,324,000

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]

The only evidence of the true value in money for the property under appeal was the appraisal submitted by Complainant.Complainant met its burden of proof and established the true value in money of the property under appeal to be $6,324,000 as of January 1, 2010.

ORDER

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

The assessed value for the subject property for tax year 2010 is set at $2,108,000.

Application for Review

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 application for review is based will result in summary denial. [23]

Disputed Taxes

The Collector of Jasper 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 29, 2011.

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 29^th day of December, 2011, to:Brian Howes, 120 W. 12^th Street, Suite 1600, Kansas City, MO 64105, Attorney forComplainant; Jeremy Crowley, Assistant Prosecuting Attorney, 601 Pearl, Room 100, Joplin, MO 64801, Attorney for Respondent; Connie Hoover, Assessor, 302 S. Main Street, Carthage, MO 64836; Bonnie Earl, Clerk; Stephen Holt, Collector, Jasper County Courthouse, Carthage, MO 64836.

___________________________

Barbara Heller

Legal Coordinator

Contact Information for State Tax Commission:

Missouri State Tax Commission

301 W. High Street, Room 840

P.O. Box 146

Jefferson City, MO 65102-0146

573-751-2414

573-751-1341 Fax

BOULDERS AT KATY TRAIL,)

)

Complainant,)

)

v.) Appeal Number 09-32678

)

SCOTT SHIPMAN, ASSESSOR,)

ST. CHARLES COUNTY, MISSOURI,)

)

Respondent.)

DECISION AND ORDER

HOLDING

Decisions of the St. Charles County Board of Equalization sustaining the assessments of the Assessor are SET ASIDE in part and AFFIRMED in part.True value in money and Assessed Values for the subject properties[1] for tax years 2009 and 2010 are set at the values listed in FINDING OF FACT 8, infra.Complainant appeared by Counsels, Steven D. Graham and Patrick L. Cullerton, St. Louis, Missouri.Respondent appeared by Assistant County Counselor, Charissa Mayes.

Evidentiary Hearing was conducted by Senior Hearing Officer W. B. Tichenor.

Decision rendered by the Commission.

ISSUE

Complainant appeals, on the ground of overvaluation, the decisions of the St. Charles County Board of Equalization, which sustained the valuations of the subject properties.The Commission takes this appeal to determine the true value in money for the subject properties on

January 1, 2009.The Commission, 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 St. Charles County Board of Equalization.Senior Hearing Officer W. B. Tichenor conducted an evidentiary hearing April 12, 2011, at the St. Charles County Administration Building, St. Charles, Missouri.Transcript filed with the Commission on May 31, 2011.Complainant’s Brief received by the Commission on August 15, 2011.Brief of Respondent received by the Commission on September 12, 2011.Complainant’s Reply Brief received by the Commission on October 3, 2011.

2.Assessment.The combined appraised value placed on the individual parcels under appeal by the Assessor was $16,210,263, a combined residential assessed value of $3,079,950.[2]The Board sustained the assessments for each parcel.Finding of Fact 3 provides the Assessor/BOE appraised values for each property under appeal.

3.Subject Properties.The subject properties consist of 104 units of a 240 unit[3] apartment/condominium complex known as The Boulders at Katy Trail in St. Charles, Missouri.A total of 136 condominium units had previously sold in the following years: In 2006, 61 units sold; in 2007, 59 units sold; and in 2008, 16 units sold.[4]

The 104 units are identified as follows:[5]

*The value cannot be increased above the Assessor/BOE value based on Respondent’s evidence, See, Evidence of Increase in Value, infra.

The properties under appeal are further identified and described as follows:

The units are either one-story garden or two-story townhouse apartments.There are seven different model types.The property of which the 104 subject parcels are a part was constructed originally in 2003 as an apartment complex, but beginning in April 2006 the units were marketed for sale as condominium units.As of January 1, 2009, the 104 units were managed as apartment rentals, under a marketing effort for sale as condominiums.As of the valuation date none of the individual units had ever been owner-occupied all had a past history of being apartment rental properties.

Eight units were used as models.The model units were available for sale as of January 1, 2009.The remaining 96 units made up the inventory of possible rental apartments.A total of 75 of the 96 apartments were leased and occupied as of January 1, 2009.

4.Complainant’s Evidence.Complainant presented the following evidence which was received into the record:

Mr. Zink testified under cross and redirect examination at the evidentiary hearing.[10]

There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[11]

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 for the combined 104 units as of January 1, 2009, to be $12,360,000, as proposed.

5.Respondent’s Evidence.Respondent presented the following evidence which was received into the record:

Mr. Babb testified under cross and redirect examination at the evidentiary hearing.[13]

6.Values Above Original Assessment.Respondent’s appraisals for those parcels with values marked by an asterisk in Finding of Fact 3 were accepted only to sustain the original assessment made by the Assessor and affirmed by the Board, and not for the purpose of raising the assessment above that value.See, Evidence of Increase in Value, infra.

7.2009 Sales.Ten of the properties under appeal sold in 2010.[14]The sales date for each of these properties is at a time relevant to the valuation date of January 1, 2009.The sale prices for these properties establish the market value as of January 1, 2009. See, Determination of Value, Sale of Ten Properties in 2009, infra.The ten properties which sold during 2010 are listed as follows:

8.True Value in Money and Assessed Values.The true values in money for the properties under appeal and the assessed values are set as follows[15]:

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 Commission 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.[19]

Basis of Assessment

The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass.[20]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[21]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.

Presumption In Appeals

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[22]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight,” the presumption disappears and the Commission, as trier of facts, receives the issue free of the presumption.[23]The presumption of correct assessment is rebutted when the taxpayer, or Respondent, when advocating a value different than 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.[24]Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board.Respondent’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and to establish value in those appeals not otherwise decided by the actual sale of a given property.

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.[25]True value in money is defined in terms of value in exchange and not value in use.[26]It is the fair market value of the subject property on the valuation date.[27]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.[28]

Both appraisers properly addressed the appraisal problem under the Standard for Valuation.[29]

Methods of Valuation

Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Commission to determine the method of valuation to be adopted in a given case.[30]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.[31] Complainant’s appraiser valued the subject properties using a discounted sellout methodology.[32]Respondent’s appraiser developed both the cost and sales comparison approaches in arriving at his conclusion of value for each of the subject properties.[33]Mr. Babb’s

sales comparison approach constituted substantial and persuasive evidence to establish the fee simple value of each property under appeal.

Determination of Value

Appraisal Approaches

Complainant’s Appraisal

Appraiser Zink valued the 104 properties as a single economic unit being operated as an apartment complex, as has been done since The Boulders was developed, but recognizing the individual apartments will one by one be converted and sold as condominiums, as had been done with the 136 sold condominiums.In other words, the development is in the process of being converted from an apartment complex to a totally owner occupied condominium development, a process that has been going on since 2006.

Under his methodology, Mr. Zink concluded his value based on a sale of all 104 units to a single investor purchaser.[34]To determine the price that such a purchaser would pay for the 104 apartments, the appraiser developed a sales comparison approach in conjunction with a discounted sellout analysis to estimate the market value of the subject.The Zink approach covered both the value of the rental income for the leased units and the future value from the eventual sale of all the units for condominium ownership.This analysis reflects what a single investor purchaser would pay for the 104 units recognizing the income from units being rented and income from units being converted to condominiums and sold over a 20 year period until all 104 units are held by individual owners.[35]

Respondent’s Appraisal

Appraiser Babb valued each of the individual properties as single condominium units under a fee simple basis.Although he developed a cost approach, his conclusion of value in each instance rested on his sales comparison analysis.The subject units fell into eight groups of properties based upon the type of model and the square footage of the living area.[36]Sales of units within The Boulders at Katy Trails were used in every instance as Mr. Babb’s comparables. His conclusion of value was based upon the sale of each of the 104 units to 104 separate individual owner occupants.[37]

Subject Units Legal Position on 1/1/09

While the entire Boulders complex was converted to a condominium form of ownership in late spring/early summer of 2006,[38] the 104 units that are the subjects of this appeal, on January 1, 2009, were still under the ownership of the Complainant.[39]The 104 units as of January 1, 2009, existed as rental apartments and display models yet to be converted into individual owner occupied condominium units.They had been platted as separate properties hence the individual map parcel numbers for each property.In order to finalize the conversion of each apartment unit into an individual condominium there are additional legal requirements that would have to be completed.[40]In addition, on January 1, 2009, 75 of the 104 units were occupied as rental units.Of the remaining 29 units, 8 were display models, but the other 21 existed as vacant rental units under the existing operation.The units were being marketed for sale and lease.[41]The sale of the 75 leased units would be subject to the existing leases.The 29 non-leased units were available to sale on January 1, 2009, as individual condominiums.

Highest and Best Use

Both appraisers presented their highest and best use analysis.The Zink analysis is found on pages 39 – 41 of his appraisal.He concluded the highest and best use of the property as improved “is consistent with the current use, as a condominium conversion development.”The

Babb analysis is found on page 12 of each of his appraisals.He found the highest and best use of the subject property “is its current use.”

Zink Analysis

Mr. Zink performed his highest and best use analysis as if the properties under appeal were a single economic unit both as vacant and as improved.The As Vacant analysis presents somewhat of an anomaly since the 104 properties are disbursed among existing residential structures and in fact form essential parts of those structures.The spaces which the 104 properties occupy cannot become vacant, unimproved space without the demolition of the existing buildings in which they are located.Accordingly, the As Vacant analysis, although required by sound appraisal practice will not logically fit the present situation, and is of no real value in addressing the present appraisal problem.

The As Improved analysis is more helpful in the existing appraisal problem.Mr. Zink again analyzed the situation as if the 104 properties were a single economic unit under the four elements which constitute highest and best use – Legal Permissibility, Physical Possibility, Financial Feasibility and Maximum Profitability.The final conclusion was that the highest and best use of the property, as improved, is consistent with the current use, as a condominium conversion development.

Babb Analysis

Mr. Babb’s analysis appears in the top half of page 12 of his appraisals.The appraiser simply concluded: “After considering the location, surroundings, economic and social forces, physical setting and the potential uses as of the date of the appraisal, it is my opinion that the highest and best use of the subject property is its current use.”

It appears that the appraiser’s conclusion to then be that the highest and best use of the subject property (104 apartment units) is to continue the operation of the properties as apartments, available for sale to be converted to individual owner occupied condominium homes.

Burden of Proof

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.[42]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.”[43]

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[44]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.[45]

Complainant’s appraisal evidence failed to meet the standard of substantial and persuasive evidence to establish the fair market value of the 104 subject properties in fee simple.

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.[46]Respondent’s appraisals met the standard of substantial and persuasive evidence to establish the fair market value of the 104 subject properties in fee simple that had not sold by the end of 2009.

Accordingly, the record provides substantial and persuasive evidence to make a determination as to the values of the individual properties under appeal.

Sale of Ten Properties in 2009

In 2009, ten properties sold.[47]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.[48]Respondent’s appraiser used seven of these sales in his sales comparison approaches.Specifically, Mr. Babb used the seven sales as comps in the following instances:

Mr. Babb made time of sale adjustments for the seven 2009 sales which he used.He made an upward adjustment to each sales price apparently to reflect that after January 1, 2009, the value of the property had increased.A review of the appraisals fails to provide any explanation or discussion as to the basis for the upward time of sale adjustments for the 2009 sales.At page 10 of each appraisal is a discussion under Neighborhood Description which states the following:“As documented through paired sales and biennial trend analysis, the subject’s property value is decreasing by an annual trend of 6.32% (report attached).”

The following page of the appraisal contains the report, which provides paired sales analysis into 2008.It does conclude a -6.32 % decline in value.There is no data which provides a factor to establish that values increased or decreased during 2009, or the rate of any asserted increase.There is no data upon which a conclusion can be made that values decreased from 1/1/09 to the time of sales during 2009.This would be required in order for an upward time of sale adjustment to be made to the 2009 sales for the 1/1/09 valuation date.There is no testimony from Mr. Babb to substantiate the basis for the time of sale adjustment.“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.”[49]

On this point the Commission is left with what appears from the four corners of Mr. Babb’s appraisal to be an upward adjustment to the sales prices which is based only on conjecture.Accordingly, the Commission concludes that the actual 2009 sale prices for these ten properties, without a time of sale adjustment, are determinative of the fair market value for the properties as of January 1, 2009, and must be so valued for purpose of this appeal.

Remaining 94 Properties

The properties noted in Finding of Fact 3 with an asterisk were valued by Respondent’s appraiser at a value greater than the Assessor/BOE value.By operation of law, the assessed value cannot be increased above that set by the Assessor and sustained by the Board for these properties.See, Evidence of Increase in Value, infra; Finding of Fact 3, supra.Accordingly in those instances where the Babb value is greater than the Assessor/BOE value, the Babb value will not be used, but the value set by the Assessor/BOE will be affirmed.

It is understood that not all 94 properties would have sold on a single day, however, for purpose of determining value of each individual unit, it is necessary to assume what each unit would have in fact sold for on January 1, 2009.This is the assumption of the hypothetical sale between the willing buyer and seller of each separate unit which is to be followed.On that basis,

the valuation data and conclusions provided by Mr. Babb provide persuasive evidence of value in fee simple for the properties.

The Commission is not persuaded that the discounted sellout methodology utilized by Complainant’s appraiser captured the fee simple value of the individual properties.Mr. Zink’s methodology was founded upon a number of assumptions as to future rental income and expenses and future sales prices for the individual properties which cannot in the mind of the Commission be validated by market data to demonstrate that the concluded values are reflective of the fee simple value of the properties under appeal.Accordingly, Complainant failed to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2009, for the subject properties.

Evidence of Increase in Value

In any case in St. Charles County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[50]Under the Commission rule just cited and Supreme Court decision[51] the assessed values for those parcels marked with an asterisk (*) by the Respondent’s proposed values in Finding of Fact 3, supra, cannot be increased above the assessed value established by the Assessor/BOE in each particular appeal, based upon evidence tendered by Respondent.

ORDER

The assessed valuations for the subject properties as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day are SET ASIDE in part and AFFIRMED in part.

The assessed values for the subject properties for tax years 2009 and 2010 are set as follows: