State Tax Commission of Missouri
|ARMSTRONG-TROTWOOD, LLC, et al||)||Appeal||11-10827 through 11-10830,|
|)||11-11018 through 11-11027,|
|)||and 11-13959 through 11-13961.|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST LOUIS COUNTY, MISSOURI,
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On July 14, 2014, Senior Hearing Officer Luann Johnson dismissed the appeals sua sponte for failure to state grounds upon which relief may be granted.
Complainants filed appeals on their individual parcels with the St. Louis County Board of Equalization. The Board of Equalization sustained the Assessor’s valuation. The Complainants filed appeals with the State Tax Commission asserting inter-county discrimination.
Complainants’ properties are located within St. Louis County. Complainants concede that the St. Louis County Assessor has correctly valued and classified their property. Complainants do not contend that St. Louis County is engaging in any discriminatory practices (intra-county discrimination). Complainants allege that discrimination is present because the neighboring county is undervaluing property (inter-county discrimination). Four taxing jurisdictions – St. Louis Community College District, Special School District of St. Louis County, Rockwood School District and Eureka Fire Protection District – cross county territorial lines. These four taxing jurisdictions are located in St. Louis County and Jefferson County. Complainants contend that properties located in Jefferson County are assessed at lower than true value. Therefore, they contend, they are being discriminated against because they are paying higher levies in those four taxing districts than neighboring properties that are undervalued by Jefferson County.
CONCLUSIONS OF LAW
Standard of Review
A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission. The Commission may then summarily allow or deny their request. The Commission may affirm, modify, reverse or set aside the decision. The Commission may take any additional evidence and conduct further hearings. See Section 138.432. RSMo.
Complainant’s Claims of Error
A. “The Senior Hearing Officer erred in dismissing these appeals, because the decisions in Foster Bros. Mfg. Co. v. State Tax Com’n of Mo., 319 S.W.2d 590 (Mo. 1958) and Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo.App. 2003) do not govern these appeals, in that these appeals involve taxing jurisdictions that are located in more than one county and Foster Bros. and Westwood did not involve such taxing jurisdictions.”
B. “The Senior Hearing Officer erred in dismissing these appeals, because these appeals invoke this Commission’s duty to correct assessments or valuations that are ‘unlawful, unfair, improper, arbitrary or capricious,’ Section 138.430.1 RSMo, in that the appraisal ratio for Complainants’ properties is significantly greater than the appraisal ratio for similar properties located in Jefferson County and also located within the St. Louis Community College District, the Special School District of St. Louis County and (in Appeal No. 11-11019) the Rockwood School District and the Eureka Fire Protection District, all of which are authorities levying a property tax.”
Foster Bros. Mfg. Co v State Tax Com’n of Mo
In Foster Bros., the property owners conceded that their property was assessed appropriately in their county. However, the property owners argued that their property had been assessed at a higher percentage of true value than other property of the same class in other counties throughout the state. The property owners argued that Section 138.390 RSMo imposed upon the State Tax Commission (Commission) a duty to equalize the valuation of property between the counties.
The Court found that the State Tax Commission has the power to adjust valuations of individual properties in order to equalize the assessments within a county. The power to adjust the assessments of individual properties is derived from an appeal from the Board. The Commission has been statutorily authorized to equalize valuations between counties. The power of the Commission to annually equalize the valuation between counties is not subject to review in a specific property owner’s appeal. “Uniformity in assessments as between the various counties must be accomplished, however, by the State Tax Commission in its annual order of intercounty equalization,” and not within an appeal of an individual parcel.
Westwood Partnership v. Gogarty
The property owner appealed the classification of property. The issue addressed a prior definition of residential property which was interpreted and applied differently among counties. The Court of Appeals held that the Commission’s jurisdiction, in appeal from board of equalization, was limited to issues of intra-county equalization and the Commission did not have jurisdiction to rule on allegations of inter-county discrimination.
The taxpayers in the case presented evidence, not of discrimination by their county assessor, but discrimination by assessors outside of their county – the territorial limits of the authority levying the property tax. Article X, Section 3 of the Missouri Constitution provides that:
“Taxes may be levied and collected for public purposes only, and shall be uniform upon the same class or subclass of subjects within the territorial limits of the authority levying the tax…”
The ad valorem real property tax is levied by the governing body of the county, which is the taxing authority. Westwood citing Beatty v State Tax Commission, 912 S.W.2d 492 (Mo. Banc 1995) The Commission’s jurisdiction then is over appeal of property owners from rulings by the Board of Equalization relating to assessments of property within their county and is no more extensive than that of a Board. Therefore the Commission is limited in appeals to adjust, correct and equalize the valuations of taxable real or tangible personal property within a county (intra-county); the Commission lacks jurisdiction in appeals from Boards of Equalization to rule on allegations of inter-county discrimination.
Commission’s Duty to Correct Assessments
Commission’s duty to correct assessments or valuations is set forth in Section 138.390 RSMo. :
“1. The state tax commission shall equalize the valuation of real and tangible personal property among the several counties in the state in the following manner: with the abstracts of all the taxable property in the several counties of the state and the abstracts of the sales of real estate in such counties as returned by the respective county clerks and the assessor of the city of St. Louis, the commission shall classify all real estate situate in cities, towns, and villages, as town lots, and all other real estate as farming lands, and shall classify all tangible personal property as follows: banking corporations, railroad corporations, street railroad corporations, all other corporations, horses, mares and geldings, mules, asses and jennets, neat cattle, sheep, swine, goats, domesticated small animals and all other livestock, poultry, power machinery, farm implements, other tangible personal property.
- The state tax commission shall equalize the valuation of each class or subclass of property thereof among the respective counties of the state in the following manner:
(1) It shall add to the valuation of each class, subclass, or portion thereof of the property, real or tangible personal, of each county which it believes to be valued below its real value in money such amount or percent as will increase the same in each case to its true value;
(2) It shall deduct from the valuation of each class, subclass, or portion thereof of the property, real or tangible personal, of each county which it believes to be valued above its real value in money such amount or percent as will reduce the same in each case to its true value.
May Department Stores Company v. State Tax Commission, 308 S.W. 2d 748 (S. Ct. 1958), the Court stated that the Commission’s authority to equalize assessments between counties is not a subject matter of a contested case. Decisions, or lack of decisions or actions, of administrative officers which are not matters of contested cases may be reviewed by suits for injunctions, mandamus, prohibition or other appropriate action. The Court stated that appeals of assessments of individual properties are not proper avenues for inter-county discrimination issues. An action as to inter-county equalization is not subject to collateral attack and is not subject to review in a landowner’s appeal from a specific valuation.
Savage v. State Tax Commission, 722 S.W.2d 72 (S Ct 1986) the court examined the legal grounds upon which the Commission could adjust a property’s assessment. The Court stated that an assessor’s actions or lack of actions in regards to property within the county may violate the principle of practical uniformity such that it would deny a person within its jurisdiction the equal protection of law. Article X, Section 3 requires uniformity of taxes upon the same class of properties within the territorial limits of the authority levying the taxes. The governing body of the county is the taxing authority. Westwood Therefore, the Commission, in an appeal of a parcel’s assessment, may review the county’s assessments for uniformity. The Commission is not authorized in an appeal of a parcel’s assessment to review uniformity among counties.
Intra-county equalization, or lack thereof, may be reviewed by the State Tax Commission in an appeal of an assessment of a particular property under their authority which is derived from the jurisdiction of the Board of Equalization. Inter-county equalization is not subject to attack under the appeal process. The fact that a few political subdivisions cross county lines does not authorize county assessors or county boards of equalization to engage in inter-county equalization. Inasmuch as the Commission’s jurisdiction in appeals is derivative, the Commission may not use the appellate process to engage inter-county equalization. The Commission may only engage in inter-county equalization as provided by law under Section 138.390 RSMo. The Complainants may not attack inter-county equalization under an appeal from a county Board of Equalization decision.
The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is AFFIRMED and incorporated by reference, as if set out in full herein verbatim, in this final decision of the Commission.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.
If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
SO ORDERED this 16 day of December, 2014.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
Victor Callahan, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 18th day of December, 2014 to: James P. Gamble, 231 South Bemiston Ave, Suite 1111, Clayton, MO 63105, Attorney for Complainant; Edward Corrigan, Associate County Counselor, Attorney for Respondent, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Jake Zimmerman, Assessor, County Government Center, 41 South Central Avenue, Clayton, MO 63105; Mark Devore, Collector, County Government Center, 41 South Central Avenue, Clayton, MO 63105.