STATE TAX COMMISSION OF MISSOURI
| CRAIG HIGGINS, | ) | |
| ) | ||
| Complainant, | ) | Appeal No. 19-20006 |
| ) | ||
| ) | Parcel 5441-00-0255-0 | |
| ) | ||
| ) | ||
| MICHAEL DAUPHIN, ASSESSOR, | ) | |
| CITY OF ST. LOUIS, MISSOURI | ) | |
| Respondent. | ) |
DECISION AND ORDER
Craig Higgins (Complainant) appeals the City of St. Louis Board of Equalization’s (BOE) decision finding the fair market value of the subject property on January 1, 2019 was $250,600, with an assessed value of $47,620. Complainant claims the assessment was discriminatory.
The hearing officer conducted an evidentiary hearing.[1] Complainant did not present substantial and persuasive evidence establishing discrimination. The BOE’s decision is AFFIRMED.
FINDINGS OF FACT
A. The Subject Property
1. The subject property is located at 4035 Lafayette Avenue in the City of St. Louis, Missouri. The parcel locator number is 5441-00-0255-0. The subject property consists of an approximately 7,151 square foot lot and a two story, single family house with approximately 2,008 square feet of living area.
2. The house was constructed in 2007. The surrounding neighborhood consists of homes of similar age and quality.
3. Complainant purchased the subject property in 2007 for $258,800.
B. The BOE Decision
4. The BOE determined the assessed value as of January 1, 2019 was $47,620, which equates to a market value of approximately $250,600. The market value is calculated from the assessed value by dividing the assessed value of $47,620 by the 19% assessment rate for residential property set by section 137.115.5(1)(a).
C. Complainant’s Appeal
5. Complainant timely appealed the BOE decision to the State Tax Commission (Commission).
6. Complainant filed with the Commission a complaint for review of assessment proposing a fair market value of $235,000. The complaint for review of assessment form includes five grounds for appeal, including overvaluation and discrimination. Complainant claimed discrimination, but did not claim overvaluation. At the evidentiary hearing, Complainant confirmed his sole claim was for discrimination.
D. Complainant’s Evidence
7. Complainant submitted exhibit A. Exhibit A consists of exterior photos, land use, assessment, and sale information for seven similar properties near the subject property, and a handwritten list of assessment data for several other properties. The photos are from the zillow.com and realtor.com websites. The land use, assessment, and sales information are from Respondent’s official website.
8. Exhibit A showed the following assessment and sales information:
ADDRESS RESPONDENT’S 2019 SALE INFORMATION
APPRAISED VALUE
| 3936 Blaine Ave. | $217,100 | $333,000 on 10/15/2018 |
| 3932 Blaine Ave. | $175,000 | $225,000 on 10/02/2015 |
| 4072 McRee Ave. | $233,100 | N/A |
| 4033 McRee Ave. | $209,900 | $305,000 on 6/14/2017 |
| 4009 McRee Ave. | $233,000 | N/A |
| 3909 Lafayette Ave. | $233,400 | N/A |
| 3941 Lafayette Ave. | $239,300 | N/A |
9. Complainant does not claim intentional discrimination. Exhibit A does not show Respondent intentionally valued the subject property differently than other residential real property in the City of St. Louis. Exhibit A does not show Respondent intentionally and systematically undervalued residential real property in the City of St. Louis during the 2019 assessment.
10. Exhibit A includes no ratio study, or any calculation of an average or median assessment level for residential real property in the City of St. Louis relative to the fair market value of such properties. Complainant did not calculate an average or median assessment level for residential real property in the City of St. Louis or for the properties listed in Exhibit A.
E. Respondent’s Evidence
11. Respondent submitted exhibit 1. Exhibit 1 is an appraisal report prepared by one of Respondent’s real property appraisers. The appraiser utilized the sales comparison approach to derive the fair market value of the subject property from a comparison to three recent sales of nearby, similar properties. The appraiser made adjustment for the differences between the subject property and the comparable properties. The appraisal report estimated that on January 1, 2019, the fair market value of the subject property was $253,000.
F. Value
12. The fair market value of the subject property on January 1, 2019 was $250,600. The assessed value is $47,620.
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 authorizes the Commission to hear appeals concerning assessment, valuation, the method or formula used in determining valuation, or the assignment of a discriminatory assessment.[2] “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.
- Evidence
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). “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).
- Burden of Proof
“The burden is on the taxpayer to establish discrimination.” State ex rel. Ashby Rd. Partners, LLC, v. State Tax Comm’n, 297 S.W.3d 80, 88 (Mo. banc 2009). The BOE’s valuation is presumed correct, but the taxpayer may rebut this presumption by producing “substantial controverting evidence.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 895 (Mo. banc 1978) (internal quotation omitted).[3] Substantial evidence is evidence which, if true, “has probative force upon the issues . . . and from which the trier of fact can reasonably decide the case on the fact issues.” Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo. 1959). If the taxpayer rebuts the BOE presumption with substantial evidence, “the burden of proof on the facts and inferences would still rest on petitioner, for it is the moving party seeking affirmative relief.” Id. 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”).
- Discrimination
Both the United States and Missouri constitutions prohibit discriminatory taxation of similarly situated taxpayers. Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 78 (Mo. banc 1986). “A mere overvaluation of a specific property does not establish a discrimination in the absence of a showing of an intentional plan of discrimination or a showing that there is an undervaluation in the average assessment, or that other property generally is undervalued.” Cupples Hesse, 329 S.W.2d at 700. Proof of discrimination entitles the taxpayer to have their “assessment reduced to the percentage of that value at which others are taxed.” Savage, 722 S.W.2d at 79 (internal quotation omitted).
In the absence of intentional discrimination, an assessment may be discriminatory if it is “so grossly excessive as to be inconsistent with an honest exercise of judgment.” Savage, 722 S.W.2d at 78. To show an assessment is grossly excessive, the taxpayer must prove the fair market value of the subject property, and determine the percentage of fair market value at which the property is assessed. Ashby Rd., 297 S.W.3d at 85.[4] The taxpayer must then compare the “median level of assessment for similarly situated properties . . . to the actual level of assessment imposed on the property.” Zimmerman v. Mid-America Fin. Corp., 481 S.W.3d 564, 571 (Mo. App. 2015); see also Savage, 722 S.W.2d at 79 (“the average level of assessment found by the ratio studies for 1980 and 1981 provides sufficient evidence of the level at which other taxpayers similarly situated were assessed to support the reduction in these taxpayers’ assessments ordered by the Commission”). There is no bright-line test to determine when an assessment transitions from an error in judgment to “grossly excessive” and discriminatory. Zimmerman, 481 S.W.3d at 575.[5]
- Complainant did not prove discrimination
Complainant’s discrimination claim fails because there is no substantial and persuasive evidence showing the actual assessment level for the subject property is grossly excessive relative to the median or average assessment level of residential property in the City of St. Louis. While exhibit A includes sales and assessment information for seven similar properties near the subject property, the exhibit includes no ratio study or any calculation of an average or median assessment level. Further, assuming for the sake of argument exhibit A showed the fair market value of the listed properties and enabled calculation of a median assessment level for those properties, the record is devoid of any evidence showing the small sample size is sufficient to show the actual median assessment level for residential property in the City of St. Louis. Complainant’s discrimination claim is denied.
CONCLUSION AND ORDER
Complainant did not prove the subject property was subject to a discriminatory assessment. The BOE decision is affirmed. The true value in money of the subject property is $250,600. The assessed value is $47,620.
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 detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person listed below in the certificate of service.
Disputed Taxes
The Collector of the City of St. Louis, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an application for review, unless said taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED February, 25th 2020.
Senior Hearing Officer
State Tax Commission
Certificate of Service
A copy of the foregoing was emailed on February 25th, 2020, to:
Complainant, Craig Higgins, chiggins007@sbcglobal.net
Respondent, Michael Dauphin, City of St. Louis Assessor, slcasr-lgl@stlouis-mo.gov;
Counsel for Respondent, Chelsea Mannery, manneryc@stlouis-mo.gov
Collector, showerst@stlouiscity.com
Elaina McKee
Legal Coordinator
[1] Complainant appeared pro se. Respondent was represented by counsel Chelsea Mannery.
[2] All statutory citations are to RSMo 2000, as amended.
[3] Section 138.060.1 provides “[t]here shall be no presumption that the assessor’s valuation is correct.” The plain language of the statute negates the former presumption the assessor’s valuation is correct, but leaves intact the longstanding presumption the BOE’s valuation is correct. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 n.2 (Mo. App. 2008); see also Parker, 553 S.W.3d at 360.
[4] For example, if Respondent values a property at $90,000, but fair market value is $100,000, Respondent’s value yields an appraisal level of 0.90, or 90% (90,000 ÷ 100,000) of fair market value. In this hypothetical, the assessment level is calculated by multiplying the 19% statutory assessment rate by the 0.90 appraisal ratio (0.19 x 0.90), resulting in an assessment level of 0.171 or 17.1% of fair market value.
[5] For reference, Savage held a 59% disparity was grossly excessive. Savage, 722 S.W.2d at 78. Zimmerman held a 43% disparity was grossly excessive. Zimmerman, 481 S.W.3d at 576.