State Tax Commission of Missouri
|v.||)||Appeal No. 13-13210|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization sustaining the assessment made by the Assessor is SUSTAINED. Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2013 and 2014 is set at $2,000,000; commercial assessed value of $640,000.
Complainant appeared by attorney Apollo Carey.
Respondent appeared in person and by counsel Ed Corrigan.
Case heard and decided by Hearing Officer Maureen Monaghan.
Complainant appeals, on the ground of overvaluation, the decision of the County Board of Equalization, which sustained the valuation of the subject 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 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 County Board of Equalization.
- Scheduling. An order was issued setting the schedule for exhibits to be filed by June 27, 2015, objections to exhibits and hearing requests were to be filed by July 27, 2015, rebuttal exhibits were due on August 27, 2015. Complainant requested a hearing; however, the County’s only evidence is the Board of Equalization Decision. They did not present any witness, the Complainant has no witness to cross-examine, therefore, a hearing is not necessary.
- Identification of Subject Property. The subject property is identified by map parcel number 22O420664 and has a street address of 12878 Manchester Rd, St. Louis, MO 63131
- Description of Subject Property. The subject property consists of a 2.14 acre tract of land improved by a 20,348 square foot, two story, multi tenant, commercial building. The building has an additional 8,304 sf of basement storage. The improvements were constructed in 1986. There was a contract to purchase in 2011 for $1,300,000. The property is 42% occupied with three tenants.
- Assessment. The Assessor determined a true value of $2,642,800, a commercial assessed value of $845,700. The Board of Equalization reduced the value to $2,000,000, commercial assessed value of $640,000.
- Complainant’s Evidence. Complainant offered into evidence Exhibits A and B. Exhibit A was an appraisal report. Exhibit B was the written direct testimony of Robert Dodge. Robert Dodge is a certified general appraiser. The value as determined by the sales comparison approach and the income approach was $2,030,000 and $1,750,000 respectively. The appraiser reconciled the approaches concluding a market value for the property as of October 2012 to be $1,750,000.
- Respondent’s Evidence. Respondent submitted Exhibit 1 – the Board of Equalization decision.
Complainant objected to Exhibit 1 on grounds of lack of foundation and relevancy. The State Tax Commission will take official notice of the Board of Equalization Decision in an appeal before them. Therefore the objection as to the lack of foundation and authentication is overruled. As to relevance, in State ex rel. Ashby Road Partners, LLC v. State Tax Commission of Missouri, 297 S.W.3d 80, 85 (Mo Banc 2009), the property owners’ sought a writ of prohibition against a State Tax Commission Order directing them to produce evidence of true value – more specifically an appraisal. The State Tax Commission’s position was that “the owners could show true value through several methods, but that, regardless of the method, the true market value of property owners’ properties is relevant and necessary to property owners’ discrimination claims and must be proven.” The Court ruled that “[p]roperty owners can choose to present the assessor’s values of the properties as their only evidence of the properties’ true market values. The consequence of their choice, as the party with the burden of proof, is that their chosen evidence must persuade the commission …. and if their evidence does not persuade, property owners will lose their claims.” The same may apply to the Respondent. They may present the decision as evidence of value. The State Tax Commission may determine how much weight to give a document.
- 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.
- Presumption of Correct Assessment Not Rebutted. The evidence presented by Complainant was not substantial and persuasive to rebut the presumption of correct assessment by the Board.
CONCLUSIONS OF LAW AND DECISION
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.
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). The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
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).
“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 terms of cash in United State dollars or in terms of financial arrangements comparable thereto; and
- The price represents a normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.” Property Assessment Valuation, IAAO, pp 18-19.
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).
The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer 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 accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
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).
Complainant Fails to Prove Value
Complainant did not present substantial and persuasive evidence to establish a fair market value as of January 1, 2013 for the subject property. Although Complainant’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 and the income approach, the appraiser’s opinion of values were for October 14, 2011 and October 1, 2012. The report was completed in October 2011. The issue before the State Tax Commission is the market value of the property as of January 1, 2013.
For the income approach, the appraiser developed two income approaches – yield capitalization and direct capitalization. The appraiser reviewed the rents of 5 comparable properties (retail and office) to develop a market rent. The appraiser reviewed the market and the subject to develop a vacancy rate. Historic and market expenses were used to finally arrive at a net operating income. The appraiser developed a schedule of prospective cash flow over a five year time schedule. A yield rate was applied to estimate the value as of the time period of the report – $1,730,000. The appraiser also developed an estimate of value using a direct capitalization rate and estimated a value of $1,750,000. The reconciled value for the two income approaches was $1,750,000.
For the market approach, the appraiser reviewed the sale of 6 comparable properties. Appropriate adjustments were made to the sales for differences such as market conditions, location, age, condition, size, and access. The appraiser, under this approach, concluded a value of $2,030,000.
The appraiser reconciled the value to be $1,750,000.
The appraiser’s opinion supports the Board’s finding of value of $2,000,000 as of January 1, 2013.
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 SUSTAINED. The assessed value for the subject properties for tax years 2013 and 2014 is set at $640,000.
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
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 15 day of September, 2015.
STATE TAX COMMISSION OF MISSOURI
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 15th day of September, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
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