State Tax Commission of Missouri
| ANDY HINES | ) | ||
| ) | |||
| Complainant, | ) | ||
| ) | Appeal No. 18-68500 | ||
| v. | ) | Parcel/Loc. No. 07-3.2-08-003-007-015.000 | |
| ) | |||
| SUE HARMON YOUNT, ASSESSOR, | ) | ||
| MADISON COUNTY, MISSOURI, | ) | ||
| ) | |||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Respondent Sue Harmon Yount, Assessor, Madison County, Missouri (Respondent) is AFFIRMED. Complainant Andy Hines (Complainant) did not present substantial and persuasive evidence to establish the true value in money (TVM) of the subject property as of January 1, 2018. Respondent presented substantial and persuasive evidence supporting her valuation of $46,640.
Complainant appeared pro se.
Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
ISSUE
Complainant appealed on the ground of overvaluation. Respondent set the TVM of the subject property at $46,640 ($33,200 improvement, $13,440 land), classified as residential property. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo. The State Tax Commission (STC) takes this appeal to determine the TVM for the subject property as the property existed on January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on May 1, 2019, at the Madison County Courthouse, Fredericktown, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 07-3.2-08-003-007-015.000. It is further identified as 312 South Wood, Fredericktown, Missouri. (Complaint for Review)
- Description of Subject Property. The subject property consists of a 22,400 square foot lot improved by a two-story residence constructed in approximately 1900, a garage constructed in approximately 1940 and a utility building constructed in approximately 1900. The residence is of brick construction with 9 rooms and 4 bedrooms and a gable roof.
- Assessment. Respondent valued the subject property at $46,640 ($33,200 improvement, $13,440 land), classified as residential, as of January 1, 2018.
- Purchase of Property. Complainant purchased the property on June 6, 2018 for $19,000. The subject property was purchased from a trustee, as the occupant of the residence was unable to keep the home up. The property was advertised in the local newspaper as for sale by owner. No realtor was involved in the sale.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM as of January 1, 2018, was $19,000. To support his opinion of value, Complainant offered the following evidence:
| Exhibit | Description | Ruling |
| 1 | List of Condition of property at time of sale | Admitted |
| 2 | Pictures of Condition of Property | Admitted |
Complainant testified that the home suffered from multiple broken windows, an outside door missing, missing and rotten porch wood, missing and rotten porch bannisters, broken plumbing features, broken electrical features, water damage to wood floors and ceiling, rotted trim, overgrown vegetation and general filth throughout the house. Complainant testified that he has been denied an occupancy permit for the subject property residence. Complainant’s wife, Louis Hines also testified to the condition of the property. Complainant testified that he has purchased bought and sold multiple properties over his lifetime. He testified that he is not a licensed realtor or appraiser. Louis Hines testified that she is not a licensed realtor or appraiser.
8. Respondent’s Evidence. Respondent opined that the TVM of the subject property for January 1, 2018 was $46,640 ($33,200 improvement, $13,440 land). To support her TVM, Respondent offered the following evidence:
| Exhibit | Description | Ruling |
| 1 | Picture of Residence | Admitted |
| 2 | Picture of Garage | Admitted |
| 3 | Picture of Residence | Admitted |
| 4 | Picture of Front Porch | Admitted |
| 5 | General Warranty Deed | Admitted |
| 6 | Property Record Card of Subject Property | Admitted |
| 7 | Sales Questionnaire for Different Property | Admitted |
| 8 | Sales Questionnaire for Different Property | Admitted |
| 9 | Sales Questionnaire for Different Property | Admitted |
| 10 | Sales Questionnaire for Different Property | Admitted |
| 11 | Property Record Card of Different Property | Admitted |
| 12 | Property Record Card of Different Property | Admitted |
| 13 | Summary of Position Regarding Subject Property | Admitted |
Respondent testified that the sale to Complainant on June 6, 2018 represented a distressed sale and did not represent an arms-length transaction. She testified that she has decades of assessment experience. Respondent testified that she valued that subject property by assigning a land value and improvement values. She testified that Exhibits 7 through 12 were utilized for this purpose. Regarding the improvement identified as the residence, Respondent stated that she valued such as a whole and assigned a 25% good factor to the residence improvement. At the evidentiary hearing the Respondent testified that after recalculating the numbers that she had actually assigned a 17% good factor to the residence.
9. Evidence was not Substantial and Persuasive. Complainant’s evidence was not substantial and persuasive to establish the TVM of the property on January 1, 2018 was $19,000.
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, including the application of any abatement. 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. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
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. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon alleged overvaluation, the Complainant must prove by substantial and persuasive evidence the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Green County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P.D. George Co., 77 S.W.3d 645 (Mo. App E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003).
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.” Westwood Partnership, 103 S.W.3d 152 (Mo. App. E.D. 2003); Daly v. P.D. George Co., 77 S.W.3d 645 (Mo. App E.D. 2002); Reeves v. Snider, 115 S.W.3d 375 (Mo. App. S.D. 2003); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc, 827 S.W.2d at 783. 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.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980)
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money and is free to consider all pertinent facts and estimates and give them such weight as reasonable 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. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
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. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc, 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property – its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transaction and adjusts those prices to account for difference between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonable related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated;
- Both parties are well informed and well advised, and both acting in what they consider their own best interest;
- A reasonable time is allowed for exposure in the open market;
- Payment is made in cash or its equivalent;
- Financing, if any, is on terms generally available in the community at the specified date and typical for the property type in its locale;
- 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.
Real Estate Appraisal Terminology, Society of Real Estate Appraisers, Revised Edition, 1984; see also, Real Estate Valuation in Litigation, J.D. Eaton, M.A.I., American Institute of Real Estate Appraisers, 1982, pp. 4-5; Property Appraisal and Assessment Administration, International Association of Assessing Officers, 1990, pp. 79-80’ Uniform Standards of Professional Appraisal Practice, Glossary.
Discussion
Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the TVM of the subject property of $19,000. Complainant testified that he did not know the condition of the subject property on either January 1, 2017 or January 1, 2018. Complainant failed to present any bids for the cost of repairing the condition issues of the improvements. Complainant did not present any evidence of TVM based upon any of the three approved valuation methodologies.
Although Complainant presented evidence of the purchase price of the subject property on June 6, 2018, the Hearing Officer is not persuaded that such represented an arms-length transaction. For example, the property was purchased from a trust through a newspaper advertisement. The motivation of the parties was not established as typical. The knowledge of the seller is unknown.
Reespondent presented evidence that she assigned a TVM of $46,640 ($33,200 improvement, $13,440 land). Respondent presented exhibits to support her land valuation. Respondent presented evidence as to how she valued the improvements. She testified and presented evidence she assigned a 17% good factor to the residence. This resulted in the residence improvement being assigned a TVM of only 17% of its value if fully repaired.
ORDER
The TVM for the subject property is affirmed. The assessed value for the subject property is $8,860, classified as residential, for tax year 2018.
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 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, MO 65102-0146, or emailed to Legal@stc.mo.gov, and a copy of said application must be sent to each person listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
Disputed Taxes
The Collector of Madison 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 24th day of May, 2019.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 24th day of May, 2019, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Stacey Jacobs
Administrative Secretary