STATE TAX COMMISSION OF MISSOURI
| DEBBI & CHARLES MCGINNIS | ) | Appeal No. 19-79500 |
| ) | 89-11-0.9-30-000-000-001.00 | |
| Complainant(s), | ) | |
| ) | ||
| v. | ) | |
| ) | ||
| RITA LEMMON, ASSESSOR, | )
) |
|
| POLK COUNTY, MISSOURI | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
Debbi and Charles McGinnis (Complainants) appeal the determination of the Polk County Board of Equalization (BOE) that the true value of the subject property on January 1, 2019 was $37,000. Complainants claim the property was overvalued and that they were subject to discrimination.
The hearing officer conducted an evidentiary hearing. Complainant Debbi McGinnis appeared in person. Complainant Charles McGinnis appeared not. Respondent appeared in person. Attorney Kenneth Ashlock, entered his appearance for Respondent. Complainants did not present substantial and persuasive evidence establishing overvaluation or discrimination. However, evidence was presented to establish the assessed valuation of the residential property increased by more than 15% and no physical inspection of the residential property was performed. The determination of the BOE is Set Aside and the assessed value is set at $4,580.
FINDINGS OF FACT
A. The Subject Property
1. The subject residential property is located at 766 Highway T, Bolivar, Missouri. The parcel number is 89-11-0.9-30-000-000-001.00.
2. The subject property consists of an approximately 80.91 acre lot, a 720 square foot, one story house, with two bedrooms, one bathroom, a front porch and a back porch. The house is approximately 95 years old. The external walls are vinyl. The roof is metal.
3. No evidence was offered of any new construction or improvements to the subject property
4. Respondent determined the true value in money of the subject property as of January 1, 2019 was $37,000 ($15,400 residential, $21,600 agricultural).
B. The BOE Decision
5. The BOE determined the true value in money of the subject property was $37,000.
C. Assessed Value Increase
6. The assessed valuation of the residential portion of the subject property in the prior assessment cycle was set at $1,730. (Exhibit K) The assessed value of the residential portion of the subject property in 2019 was set at $2,930. (Exhibit K) The assessed value of the residential property increased by more than 15%.
D. Complainant’s Appeal
7. Complainants timely appealed to the State Tax Commission (Commission).
8. Complainants alleged the subject property was overvalued and that they were subjected to discrimination.
E. Overvaluation & Discrimination Claims
9. Complainant submitted exhibits A through P. Each exhibit was admitted into evidence without objection. Complainant’s exhibits were as follows:
| Exhibit A | EPA Website Lifespan Printout |
| Exhibit B | Website Well Information |
| Exhibit C | J & C Well Drilling, Pump & Plumbing Well Information |
| Exhibit D | Land Value Purchase Information |
| Exhibit E | New Hampshire Dept. of Environmental Services Fact Sheet |
| Exhibit F | Flow Rate Test DVD |
| Exhibit G | Flow Rate Calculation Information Sheet |
| Exhibit H | Septic Tank Installation in Missouri Information |
| Exhibit I | Septic Tank Installation Cost in Ozark, Missouri Information |
| Exhibit J | Proposed Value Calculation |
| Exhibit K | 2019 Real Estate Value Change Notice |
| Exhibit L | Section 137.180 RSMo |
| Exhibit M | Section 137.115 RSMo |
| Exhibit N | Financial Strategies Group, Inc. Letter |
| Exhibit O | Information on Neighboring Wells |
| Exhibit P | Letter from McCarthy Drilling, LLC |
Complainant testified that she did not feel that all wells are of equal value. Complainant contends that Respondent’s residential valuation was incorrect because the land value did not account for the difference in the age and condition of the well on the subject property. Complainant’s testimony conceded the true value in money of the residential portion of the subject property equals or exceeds $15,400 (the true value in money assigned to the residential portion of the subject property).
10. Complainant presented no evidence of an intentional plan by Respondent to assess the subject property at a greater percentage of value than other residential properties in Polk County. Complainant presented no evidence of the overall assessment ratio of residential property in Polk County.
11. Respondent submitted Exhibits 1-20. Each exhibit was admitted into evidence without objection. Respondent’s exhibits were as follows:
| Exhibit 1 | Quick Information from BOE Workshop |
| Exhibit 2 | Section 137.115 RSMo |
| Exhibit 3 | State Tax Commission Assessor Manual for Ratio Studies |
| Exhibit 4 | Section 137.016 RSMo |
| Exhibit 5 | Section 137.130 |
| Exhibit 6 | 2003-2006 Land Value Charts |
| Exhibit 7 | Land Value Study Provided by State Tax Commission |
| Exhibit 8 | Email Regarding Greene County Values along Polk County Sales and Data |
| Exhibit 9 | Land Values for Dallas County |
| Exhibit 10 | Page 1 of 33 Listings of Well Drillers |
| Exhibit 11 | Online Cost of Well Drilling Information |
| Exhibit 12 | New Construction Letters |
| Exhibit 13 | Cost of Basic Pole for Electric from SW Electric |
| Exhibit 14 | Land Value Chart Used for 2019 |
| Exhibit 15 | Report of Average Land Per Acre from Realtor, 3 Sales Letters & Spreadsheet |
| Exhibit 16 | Information Utilized for Land Value Data |
| Exhibit 17 | Comparison of Information on Several Parcels |
| Exhibit 18 | Agricultural Land Production Values |
| Exhibit 19 | 2019/2020 Property Report for 11-0.9-30-000-000-001.000 with Pictures |
| Exhibit 20 | BOE Appeal, BOE Decision and Complaint for Review of Assessment |
Respondent testified that she raised land values to account for the presence of wells and septic systems. Respondent did not conduct a physical inspection of the subject property prior to increasing the assessed value of the property classified as residential. The assessor did not inspect the property until November 5, 2019. (Transcript minutes 48-55)
F. Value
12. The assessed value of the subject property classified as residential is set at $1,990. The assessed value of the subject property classified as agricultural is affirmed at $2,590.
CONCLUSIONS OF LAW
- Authority
The Commission has authority, “under such rules as may be prescribed by law, to hear appeals from local boards in individual cases and, upon such appeal, to correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.” Mo. Const. art. X, § 14. Section 138.430.1, RSMo 2000, authorizes the Commission to hear appeals concerning assessment, valuation, the method or formula used in determining valuation, or the assignment of a discriminatory assessment.[1] “The commission shall investigate all such appeals and shall correct any assessment or valuation which is shown to be unlawful, unfair, improper, arbitrary or capricious.” Id. “To hear and decide appeals pursuant to section 138.430, the commission shall appoint one or more hearing officers.” Section 138.431.1. 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.” Section 138.431.5.
- True Value in Money
All real property and tangible personal property must be assessed at its value or a percentage of its value as fixed by law for each class and for each subclass. Mo. Const. Art. X, Sec. 4(a), 4(b). Section 137.115.5(1) provides residential property is assessed at 19% of its true value in money and agricultural property is assessed at 12%. The true value in money “is an estimate of the fair market value on the valuation date.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 897 (Mo. banc 1978). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the true value in money is a factual issue. Parker v. Doe Run Co., 553 S.W.3d 356, 360 (Mo. App. 2018).
- Evidentiary Standards
The hearing officer is the trier of fact and determines the credibility and weight of the evidence. Citizens for Rural Pres., Inc. v. Robinett, 648 S.W.2d 117, 132 (Mo. App. 1982); see also Exch. Bank of Mo. v. Gerlt, 367 S.W.3d 132, 136 (Mo. App. 2012) (the trier of fact determines credibility and is free to disbelieve all or part of a party’s 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 reasonably they may be deemed entitled to.” St. Louis Cty. v. State Tax Comm’n, 515 S.W.2d 446, 450 (Mo. 1974); see also Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015) (the relative weight of any relevant factor is for the administrative hearing officer to decide). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
- Complainant’s Burden of Proof
A taxpayer challenging the assessment, valuation, the method or formula used in determining valuation, or the assignment of a discriminatory assessment bears the burden of proving the assessment or valuation was “unlawful, unfair, improper, arbitrary or capricious.” Section 138.430.1; Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003).
Substantial evidence is evidence which “has probative force upon the issues . . . and from which the trier of fact can reasonably decide the case on the fact issues.” Cupples Hesse, 329 S.W.2d at 702 (internal quotation omitted). To prevail, the taxpayer must produce “persuasive” evidence sufficient to convince the trier the disputed fact has been established. White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010); see also Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002) (evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact”).
- Section 137.115.10 RSMo
Section 137.115.10 provides before the assessor may increase the assessed valuation of residential property by more than fifteen percent since the last assessment, the assessor shall conduct a physical inspection of such property. A valuation increase of more than fifteen percent is conditioned on a mandatory physical inspection. Because a physical inspection is a condition precedent to a valuation increase in excess of fifteen percent, the assessor’s failure to conduct a physical inspection negates the increased valuation to the extent it exceeds fifteen percent. Because the condition precedent – a physical inspection – applies only if the valuation increased “by more than fifteen percent,” the assessor’s failure to conduct a physical inspection should not negate that portion of the increased valuation that is less than fifteen percent. [1] The taxpayer could obtain an additional reduction only by producing substantial and persuasive evidence the fifteen percent valuation increase exceeds fair market value. See Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346-348 (Mo. banc 2005) (taxpayer may rebut presumption of correct valuation with “substantial and persuasive evidence” of fair market value).
- Overvaluation
Complainant did not produce substantial and persuasive evidence to establish the true value in money of the subject property. Complainant produced no evidence of the true value in money of the agricultural portion of the subject property which was valued at $21,600. Complainant conceded the true value in money of the residential portion of the subject property equals or exceeds $15,400 (the true value in money assigned to the residential portion of the subject property).
- Discrimination
The Hearing Officer understands Complainant’s discrimination claim to essentially be that different wells of different ages were valued identically. The issue however is the value added to the residential parcel due to the fact it has a water source. Complainant offered no evidence of the average assessment ratio of the same class of property as the subject, in Polk County. The United States and Missouri constitutions prohibit discriminatory taxation of similarly situated taxpayers. See U.S. Const. amend. XIV; Mo Const. art. X, § 3. “A taxpayer has the right to have his assessment reduced to the percentage of that value at which others are taxed. . . .” Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986) (internal quotation omitted). Absent proof of intentional discrimination, the analysis of discrimination claims compares the assessment level of similarly situated properties to the actual assessment level for the subject property. Id. at 78.
There was no evidence of an intentional plan of discrimination or of the average or median assessment level of similarly situated residential properties in Polk County. Complainant’s discrimination claim is denied.
CONCLUSION AND ORDER
The assessed value of the residential portion of the parcel is set aside. The assessed value of the residential property is set at $1,990.
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 the application must be sent to each person listed below in the certificate of service.
Failure to state the specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.
Disputed Taxes
The Collector of Polk 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 this 30th day of January, 2020.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Certificate of Service
I certify that on January 30th, 2020, a copy of the foregoing was sent via email to
Complainants: debbiemcginnis@gmail.com
Assessor: assessor@polkcountymo.org
Attorney for Assessor: pa@polkcountymo.org
Collector: treasurer@polkcountymo.org
Clerk: clerk@polkcountymo.org
Legal Coordinator
[1] All statutory citations are to RSMo 2000, as amended.
[1] This conclusion is confirmed by considering the converse: if the failure to conduct a physical inspection does not negate a valuation increase to the extent it exceeds fifteen percent, then the “[b]efore the assessor may increase the assessed valuation” language is rendered superfluous. See Bateman v. Rinehart, 391 S.W.3d 441, 446 (Mo. banc 2013) (courts “must presume every word, sentence or clause in a statute has effect, and the legislature did not insert superfluous language.”) Additionally, as noted earlier, the fundamental objective in real property assessment is to determine the “true value in money.” Section 137.115.1. Recognizing this objective is a valuable interpretative guide because “the distinction between ‘mandatory statutes’ and ‘directory statutes’ is whether the legislature intended to make all actions that fail to comply with that obligation void or ineffective.” Frye v. Levy, 440 S.W.3d 405, 409 (Mo. banc 2014). Because the fundamental objective is determining true value in money, it is unlikely a court would hold the failure to conduct a physical inspection conclusively refutes a valuation increase of less than fifteen percent if that increase reasonably reflects fair market value.