State Tax Commission of Missouri
| ARNOLD AND ROSLYN LEVIN, | ) | |
| ) | ||
| Complainant(s), | ) | |
| ) | ||
| v. | ) | Appeal # 13-10356 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST. LOUIS CO., MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
ORDER AFFIRMING HEARING OFFICER DECISION
On April 28, 2015, Senior Hearing Officer John Treu issued his order affirming the value placed upon the subject properties by the St. Louis County Board of Equalization. Complainant filed an application for review.
Standard Upon 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.
Issue
Complainants assert that the Hearing Officer:
(1) in violation of Section 138.060 RSMo. and 12 CSR 30-3.075, erred in admitting the appraisal report of the Respondent as the appraisal report included an opinion of value higher than that of the Board of Equalization; and
(2) erred in not holding Respondent to a burden of clear, convincing and cogent evidence in violation of Section 137.115.1 RSMo..
DISCUSSION AND RULING
Section 138.060 RSMo
The pertinent portion of Section138.060.1 RSMo states: “….At any hearing before the State Tax Commission or a court of competent jurisdiction of an appeal of assessment from a first class charter county or a city not within a county, the assessor shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period.”
A state certified appraiser, when completing an appraisal, is required to form an opinion of market value. The appraiser has duties under Missouri statutes as well as USPAP which he must fulfill and comply. In other words, the expert forms an objective opinion and presents the opinion in an appraisal report. The County cannot be burdened with hiring multitudes of appraisers in hopes that one appraiser forms an opinion of value that is the exact same conclusion of value reached by the Board or assessor. In any case in St. Louis 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
Burden of Proof Under Section 137.115 RSMo.
Although the Board of Equalization sustained the Assessor’s valuation, the Board’s valuation is assumed to be an independent valuation. In charter counties or the City of St. Louis, the Respondent, when wishing to advocate to return the valuation to the Assessor’s original valuation, which was higher than the value assigned by the Board of Equalization, the provisions of Section 137.115.1, RSMo, come into play and the Respondent has the burden to present clear, convincing and cogent evidence to sustain their original valuation on residential property which was made by a computer, computer-assisted method or a computer program. If, as in this appeal, the Board of Equalization sustained the valuation of the Assessor, the computer assisted presumption does not come into play, as the Board’s valuation, is an independent valuation. Thus, Respondent’s burden of proof in such appeals is the same as that imposed upon complainant.
ORDER
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, 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 8th day of September, 2015.
STATE TAX COMMISSION
Bruce E. Davis, Chairman
Randy Holman, Commissioner
Victor Callahan, Commissioner
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 8th day of September, 2015. The individuals notified are as follows:
Patrick Keefe, Attorney for Complainant. pwk@keefefirm.com
Kathryn Linnenbring, Assistant County Counsel, Attorney for Respondent, KLinnenbringer@stlouisco.com;
Jake Zimmerman, Assessor, syoutzy@stlouisco.com
Mark Devore, Collector, collector@stlouisco.com
Jacklyn Wood
Legal Coordinator
State Tax Commission of Missouri
| ARNOLD & ROSLYN LEVIN, | ) | |
| ) | ||
| Complainant | ) | |
| ) | ||
| v. | ) | Appeal No. 13-10356 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR | ) | |
| ST. LOUIS COUNTY, MISSOURI,
Respondent |
) |
DECISION AND ORDER
HOLDING
Decision of the County Board of Equalization for St. Louis County sustaining the assessment made by the Assessor is AFFIRMED. Both Complainant and Respondent submitted appraisal reports and evidence. Ultimately, Respondents evidence proved to more substantial and persuasive and met such burden to affirm the assessment by the Board of Equalization.
True value in money for the subject property for tax years 2013 and 2014 is set at $542,600, residential assessed value of $103,090.
Complainant appeared by attorney Patrick Keefe.
Respondent appeared by attorney Kathryn Linnenbringer.
Case heard and decided by Senior Hearing Officer John Treu.
ISSUE
Complainant chose to only pursue this appeal on the ground of overvaluation, regarding the decision of the St. Louis 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, 2013. 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 and improvement to the property. Section 137.115.1 RSMo
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 State Tax Commission from the decision of the St. Louis County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on April 20, 2015 at St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 17P320231. It is further identified as 12590 Hibler Woods Drive, St. Louis County, Missouri. (Ex. A, B & 1)
- Description of Subject Property. The subject property consists of a 29,359 square foot tract of land improved by a single family, residential ranch style home, with 3,908 square feet of living area. Amenities include 4 bedrooms, 2 ½ bathrooms, a 3 car attached garage, a patio and two fireplaces. (Ex. 1)
- Assessment. The Assessor valued the property at $542,600, an assessed residential value of $103,090. The Board of Equalization sustained the assessor’s valuation of the property. (Ex. 1)
- Complainant’s Evidence. Complainant offered into evidence Exhibit A, B, C and D. Exhibit A consisted of an appraisal report by Barry Reeves. Exhibit B consisted of the Written Direct Testimony of Mr. Reeves. Exhibit C consisted of an MLS printout (Residential Agent Only Format) relating to Comparable #1 used by Respondent’s appraiser. Exhibit D consisted of an MLS printout (Agent Condensed with Pictures Format) relating to Comparable #1 used by Respondent’s appraiser. Exhibit E consisted of enlarged pictures of smaller pictures within Exhibit D. Exhibits A & B were received into evidence without objection. Exhibits C, D & E were objected to, objection was overruled and the exhibits were received into the evidentiary record to be given such weight and relevance as the Hearing Officer deemed appropriate.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014, therefore the assessed value for 2013 remains the assessed value for 2014. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1. Exhibit 1 consisted of an appraisal report by Gerald Keeven. Exhibit 1 was objected to as in violation of §138.060, objection was overruled and the exhibit was received into the evidentiary record.
- Presumption of Correct Assessment Proven. The evidence presented by Respondent was substantial and persuasive to support the presumption of correct assessment by the Board and to establish the fair market value of the subject property to be $542,600, assessed residential value of $103,090. See, Respondent Proves Value, infra. Although the appraised value assigned by Respondent’s appraiser was $575,000 ($32,400 above the value assigned by the Assessor and sustained by the Board of Equalization), such appraisal was accepted only to sustain the original assessment made by the Assessor and sustained by the Board of Equalization and not for the purpose of raising the assessment above that value.
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. 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 and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo – residential property at 19% of true value in money.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958). 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.
Complainants’ Burden of Proof
In order to prevail, Complainants 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, 2013. Hermel, supra. 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.” See, 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); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991). A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970). The owner’s opinion is without probative value; however, where it is shown to have been based upon improper elements or an improper foundation. Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).
“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.” Carmel Energy 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. 1980).
Board Presumption
The Assessor’s original value in this appeal was determined by the Board to be correct. Accordingly, the taxpayer must rebut that presumption in order to prevail. The taxpayer must establish by substantial and persuasive evidence that the value concluded by the Board is in error and what the correct value should be. The burden, of course, is discharged by simply establishing the fair market value of the property as of the valuation date, since once fair market value is established it, a fortiori, proves that the Board’s value was in error. The computer-assisted presumption plays no role in this process.
Computer-Assisted Presumption
The computer assisted presumption can only come into play in those instances where the Respondent is seeking to have the valuation of the subject property returned to the Assessor’s original valuation. If in a given appeal the Respondent is offering evidence that would establish a value less than the original valuation, then the computer-assisted presumption is not applicable to that appeal. Even if the Board has reduced the valuation and the Respondent’s evidence is offered to increase the value, but not to the level of the original valuation, the computer-assisted presumption does not come into play.
If the Board of Equalization sustained the valuation of the Assessor, such does not negate the fact that the Board presumption remains operative as to evidence which is presented by the taxpayer and Respondent. The computer-assisted presumption only comes into play if the Board of Equalization lowered the value of the Assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the Assessor’s valuation was not the result of a computer assisted method. The Board valuation is assumed to be an independent valuation.
Respondent’s Burden of Proof
In charter counties or the City of St. Louis, the Respondent, when wishing to advocate for a valuation to return the valuation to the Assessor’s original valuation, which was higher than the value assigned by the Board of Equalization, has imposed upon him by the provisions of Section 137.115.1, RSMo, the burden of proof to present clear, convincing and cogent evidence to sustain a valuation on residential property which is made by a computer, computer-assisted method or a computer program. If, as in this appeal, the Board of Equalization sustained the valuation of the Assessor, the computer assisted presumption does not come into play, as the Boards valuation, is an independent valuation. Thus, Respondent’s burden of proof in such appeals is the same as that imposed upon complainant.
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. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). True value in money is defined in terms of value in exchange and not value in use. Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
It is the fair market value of the subject property on the valuation date. Hermel, supra.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- 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.
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. 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. Section 138.430.2, RSMo. The Hearing Officer during the evidentiary hearing made inquiry of Complainant and Respondent’s appraiser.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably 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, at 615 (Mo. App. W.D. 2000); Hermel, supra; 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. Div. 2 1974).
Opinion Testimony by Experts
An expert’s opinion must be founded upon substantial information, not mere conjecture or speculation, and there must be a rational basis for the opinion. Missouri Pipeline Co. v. Wilmes, 898 S.W. 2d 682, 687 (Mo. App. E.D. 1995). The State Tax Commission cannot ignore a lack of support in the evidence for adjustments made by the expert witnesses in the application of a particular valuation approach. Drey v. State Tax Commission, 345 S.W. 2d 228, 234-236 (Mo. 1961), Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W. 3d, 341, 348 (Mo. 2005).
The testimony of an expert is to be considered like any other testimony, is to be tried by the same test, and receives just so much weight and credit as the trier of fact may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer, as the trier of fact, has the authority to weigh the evidence and is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and may accept it in part or reject it in part. Beardsley v. Beardsley, 819 S.W. 2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W. 2d 605, 607 (Mo. 1981); Scanlon v. Kansas City, 28 S.W. 2d 84, 95 (Mo. 1930).
Evidence of Increase in Value
In any case in charter counties or St. Louis City 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. Section 138.060, RSMo; 12 CSR 30-3.075. The evidence presented by the Respondent was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the fair market value of the property under appeal, as of January 1, 2013, to be $575,000. However, under the Commission rule just cited and Supreme Court decision the true market value cannot be increased above $542,600, assessed residential value of $103,090, in this particular appeal. State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 S.W.3d 80, 87-88 (Mo 8/4/09).
Respondent Proves Value
Respondent presented substantial and persuasive evidence to support the a fair market value of the subject property as of January 1, 2013, to be $542,600 for the subject property. Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences. The adjustments made by the appraiser were consistent with generally accepted guidelines for the appraisal of property of the subject’s type. The adjustments properly accounted for the various differences between the subject and each comparable.
Although Complainant also submitted an appraisal report and the testimony of such appraiser, Respondent’s appraisal report and the testimony of such appraiser was deemed by the Hearing Officer to be more substantial and persuasive. Where Complainant’s appraiser used two comparables (Comparables #2 and #3) whose sales dates were in the year 2011, with both being on the other side of I-270 (East of I-270), compared to the subject property being located west of I-270; Respondent’s appraisers three comparables all fell within the same basic neighborhood as the subject property, were on the same side of I-270 as the subject property and all sold in the year 2012, closer to the valuation date of January 1, 2013.
Finally, Respondent’s appraiser assigned a true market value of $575,000 to the subject property. Even in the event such valuation was incorrect by up to $32,400, such would constitute substantial and persuasive evidence to affirm the value assigned by the appraiser and sustained by the Board of Equalization.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Louis County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2013 and 2014 is set at $103,090.
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, 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. Section 138.432, RSMo
Disputed Taxes
The Collector of St. Louis 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 28th day of April, 2015.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 28th day of April, 2015. The individuals notified are as follows:
Patrick Keefe, Attorney for Complainant. pwk@keefefirm.com
Kathryn Linnenbring, Assistant County Counsel, Attorney for Respondent, KLinnenbringer@stlouisco.com;
Jake Zimmerman, Assessor, syoutzy@stlouisco.com
Mark Devore, Collector, collector@stlouisco.com
Jacklyn Wood
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