State Tax Commission of Missouri
BARATHAVEN ASSOCIATES LLC,)
)
Complainant,)
)
v.) Appeal Nos.07-32574 & 07-32575
)
SCOTT SHIPMAN, ASSESSOR,)
ST. CHARLES COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On February 27, 2009, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) affirming the assessments by the St. Charles County Board of Equalization.
Complainant timely filed its Application for Review of the Decision.Respondent timely filed his Response.
Respondent also filed Motion to Amend Decision and Order Nunc Pro Tunc.Order Nunc Pro Tunc correcting Decision by striking the words SET ASIDE on page 11 of the Decision and inserting in lieu thereof the word AFFIRMED was issued on May 4, 2009.The inclusion of the words SET ASIDE was a mere typographical error in light of the prior 10 pages of the Decision.This was properly corrected by the Order Nunc Pro Tunc.
CONCLUSIONS OF LAW
The Hearing Officer as the trier of fact may consider the testimony of a witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances.[1]The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[2]
DECISION
Complainant’s Points Argued
Complainant presents two points for the Commission’s review.The points raised are stated as follows:[3]
1.The Hearing Officer erroneously concluded, against the clear weight of the evidence that Complainant had not established that it had planted all of the subject property in winter wheat in November of 2006 and November 2007 and thereby erroneously concluded, against the weight of the evidence, that Complainant had not established that it had devoted the subject land primarily to the raising and harvesting of crops for the 2007/2008 assessment years.
2.The Hearing Officer erred as a matter of law in assigning factors to the determination of agricultural classification that are not justified by the governing statutory definition.[4]
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[5]The Hearing Officer did not err in his determinations as challenged by Complainant.
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is 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.
If judicial review of this decision is made, any protested taxes 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. Charles County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes in accord with the decision on the underlying assessment in this appeal.
SO ORDERED June 16, 2009.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Jennifer Tidwell, Commissioner
Charles Nordwald, Commissioner
ORDER NUNC PRO TUNC CORRECTING DECISION
Hearing Officer’s Decision and Order is corrected Nunc Pro Tunc as follows:On page 11 under the heading ORDER, at the end of the first sentence, the words SET ASIDE are stricken and the word AFFIRMED is inserted in lieu thereof.In all other respects, said Decision and Order is affirmed as written and issued on February 27, 2009.
SO ORDERED May 4, 2009.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Senior Hearing Officer
DECISION AND ORDER
HOLDING
Decisions of the St. Charles County Board of Equalization sustaining the assessments made by the Assessor are AFFIRMED.Correct classification of the properties under appeal is commercial.
True value in money for the subject property in Appeal 07-32574 for tax years 2007 and 2008 is set at $1,380,880, assessed value of $441,880.
True value in money for the subject property in Appeal 07-32574 for tax years 2007 and 2008 is set at $2,389,310, assessed value of $764,580.
Complainant appeared by Counsel, James Bick, St. Louis, Missouri.
Respondent appeared by Assistant County Counselor, Charissa Mayes.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes these appeals to determine the classification for the subject properties on January 1, 2007, specifically to find whether the subject properties should be classified for tax years 2007 and 2008 as agricultural properties and assessed of 12% of the true values in money set by the Assessor in the 2007-08 assessment cycle.
SUMMARY
Complainant appeals, on the ground of misclassification, the decisions of the St. Charles County Board of Equalization, which sustained the valuation of the subject properties.Complainant contends the properties were misclassified and should be classified as agricultural property and assessed at 12% of the appraised values set by the Assessor.Complainant does not challenge the true value in money placed on each property by the Assessor and sustained by the Board.
A hearing was conducted on December 2, 2008, at the St. Charles County Administration Building, St. Charles, Missouri.Complainant’s Brief was received by the Commission on December 18, 2008.Respondent’s Brief was received by the Commission on January 21, 2009.[6]Complainant’s Response to Respondent’s Brief received by the Commission on February 9, 2009.
The Hearing Officer, having considered all of the competent evidence upon the record and the Briefs and Response of the party, enters the following Decision and Order.
Complainant’s Evidence
The following exhibits were received into evidence on behalf of Complainant.
EXHIBIT |
DESCRIPTION |
A |
Affidavit of Larry Kohler, Plat Drawing, Invoice 369969, Check 5646 |
B |
Fax to Steve Riney, dated 4/14/08, with copies of Exhibit A |
C |
Aerial Photo of Subjects, Enlarged Aerial Photo – Subjects outlined in red |
D |
Written Direct Testimony of Leland R. Swartz |
E |
Written Direct Testimony of Larry Kohler |
Swartz and Kohler testified at hearing.
Respondent’s Evidence
The following exhibits were received into evidence on behalf of Respondent.
EXHIBIT |
DESCRIPTION |
1 |
Plat of subject properties |
2 & 3 |
Photographs of subjects – January/February 2007 |
4 – 11 |
Photographs of subjects – July 2007 |
12 – 14 |
Photographs of subjects- October 2007 |
15 – 24 |
Photographs of subjects – March 2008. |
25 |
Deposition of Larry Kohler, 7/11/08 |
26 |
Written Direct Testimony of Todd Powelson. |
27 |
Written Direct Testimony of Paul Woodland |
28 |
Written Direct Testimony of Tom Babb |
Powelson, Woodland and Babb testified at hearing.
Commission Exhibits
The following exhibits were received after hearing as Commission Exhibits.[7]
EXHIBIT |
DESCRIPTION |
1 |
Property Record Card – Appeal 07-32574 |
2 |
Property Record Card – Appeal 07-32575 |
FINDINGS OF FACT
1. Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decisions of the St. Charles County Board of Equalization.
2.Property Identification – Appeal 07-32574.This property is located at Barathaven Blvd. and Highway 40/61W, Dardeen Prairie, Missouri.The property is identified by parcel number T071700268 and map number 3-157D-A061-OL-A and is otherwise known as Barathaven Lot A.The property consists of an irregular shaped lot 6.34 acres in size.[8]
3.Property Identification – Appeal 07-32575.This property is located at Barathaven Blvd. and Highway 40/61W, Dardeen Prairie, Missouri.The property is identified by parcel number T071700269 and map number 3-157D-A061-OL-B and is otherwise known as Barathaven Lot B.The property consists of a generally rectangular shaped lot 10.97 acres in size.[9]
4.Valuation and Classification – Appeal 07-32574.The Assessor set the appraised value for the property at $1,380,880.He classified the property as Commercial.The assessed value as Commercial real property is $441,880.The Board of Equalization sustained the Assessor’s value and classification.[10]
5.Valuation and Classification – Appeal 07-32575.The Assessor set the appraised value for the property at $2,389,310.He classified the property as Commercial.The assessed value as Commercial real property is $764,580.The Board of Equalization sustained the Assessor’s value and classification.[11]
6.Complainant’s Claim.Complainant did not challenge the appraised values of either property.Complainant asserted that the property should be classified as agricultural property and assessed at 12% of the values determined by the Assessor.[12]If the property in Appeal 07-32574 was assessed at 12% of its appraised value, its assessed value would be $165,710.If the property in Appeal 07-32575 was assessed at 12% of its appraised value, its assessed value would be $165,710.
7.Crop Sown – November 2006.In the years immediately prior to November 2006 there is no evidence that the tracts under appeal had been “devoted primarily to the raising and harvesting of crops.”[13]A portion of the properties were sown to winter wheat on or about November 28, 2006 by Larry Kohler.No crop matured.Therefore no harvest of winter wheat was made in the summer of 2007.No spring or summer crop was planted on the tract in 2007.Complainant did not establish that all 6.34 acres in Appeal 07-32574 and that all 10.97 acres in Appeal 07-32575 were sown to winter wheat.
8.Crop Sown – October 2007.A portion of the properties were sown to winter wheat in October, 2007 by Runyon Landscaping.No crop matured.Therefore no harvest of winter wheat was made in the summer of 2008.No spring or summer crop was planted on the tract in 2008.Complainant did not establish that all 6.34 acres in Appeal 07-32574 and that all 10.97 acres in Appeal 07-32575 were sown to winter wheat.
9.Properties Offered for Sale.The properties under appeal were being offered for sale during the 2007-08 assessment cycle for build-to-suit commercial or residential development.[14]
10.Zoning of Properties.For the 2007-08 assessment cycle the properties were zoned commercial.[15]
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.[16]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[17]In the present appeals, the presumption that exists is that the Board properly classified the subject properties as commercial and assessment them at thirty-two percent of their true value in money.[18]Therefore in these cases, the presumption of correct assessment would be rebutted when the taxpayer, presents substantial and persuasive evidence to establish that the Board’s classification is erroneous and what the proper classification should have been placed on the properties.[19]Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[20]Persuasive evidence is that evidence which has sufficient weight and probative value to convince the trier of fact.The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief.[21]
Complainant’s Burden of Proof
In order to prevail, Complainant must present an opinion of the correct classification for the subject properties and substantial and persuasive evidence that the proposed classification is indicative of the use of the subject property on January 1, 2007, and January 1, 2008.[22]The Taxpayer asserted that the properties under appeal should be classified as agricultural property.There is no presumption that the taxpayer’s opinion on classification is correct. The taxpayer bears the burden of proof in the case.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.”[23] More specifically, taxpayer in these particular appeals must prove by substantial and persuasive evidence that as a matter of law the use of the two parcels came within the statutory definition for an agricultural classification for tax years 2007 and 2008.
Duty to Investigate
In order to investigate appeals filed with the Commission, the Hearing Officer has the duty to 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 its inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties.[24]The Hearing Officer received into evidence as Commission Exhibits the property record cards on the subject property under his authority to inquire regarding any matter or issue relevant to the assessment of the property.
Properties Proper Classification – Commercial
Complainant seeks a determination that its 17.31 acres should be assessed at twelve percent of its true value in money of $3,770,190.[25]The basis for Complainant’s claim is the sowing of winter wheat on a portion of the two tracts under appeal in November 2007 and in October 2008.The controlling statute relative to a determination of an agricultural use of real property is 137.016.1(1), RSMo.It states in relevant part for the present appeals:
“Agricultural and horticultural property”, all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; …”
Complainant claims that for tax years 2007 and 2008 the two properties under appeal met this statutory definition.In order for Complainant’s properties to be assessed at twelve percent Complainant must have established by substantial and persuasive evidence that the properties were “used for agricultural purposes and devoted primarily to the raising and harvesting of crops.”The asserted use for agricultural purposes consists solely of the sowing of winter wheat in November 2006 and October 2007.Complainant’s evidence falls short of establishing that the two tracts of land were devoted primarily to the raising and harvesting of crops.
November 2006 Planting
The testimony of Complainant’s witness Kohler established that he did not sow the entire 17 acres of the two tracts in winter wheat in November 2006.Mr. Kohler marked in red ink on Exhibit C the area that he sowed to winter wheat in November 2006.[26]A simple comparison of the area marked by Mr. Kohler and Exhibit 1, which shows the subject tracts highlighted in yellow, reveals that Mr. Kohler sowed far less than a quarter of the each of the two tracts.[27]It appears that for Tract B[28] less than 2 acres of ground was planted and for Tract A[29] less than an acre was planted.No evidence was provided as to the amount of seed and fertilizer used on Complainant’s tracts to establish adequate seed and fertilizer to actually plant 17 acres.Mr. Kohler’s own testimony was that he thought the total area of the two tracts under appeal was 11 or 12 acres.[30]There is no evidence upon which the Hearing Officer can conclude that in November 2006 the entire 17.31 acres or what actual portion of the two tracts was in fact sown to winter wheat.
October 2007 Planting
With respect to the sowing of wheat in October 2007, the evidence is less compelling.Mr. Swartz testified Runyon Landscaping was hired to do the planting in October, 2007.[31]No documentation was provided from Runyon to establish the amount of see and fertilizer used for the 2007 planting.Furthermore, no one from Runyon provided testimony to establish what portion of the 17 acres under appeal was actually sown to winter wheat.The testimony of Mr. Swartz was simply that Complainant contracted with Runyon.Mr. Swartz had no personal knowledge of if all 17 acres or only a portion was actually sown to winter wheat.He was not present and didn’t plant the seed or apply any fertilizer.The only evidence with regard to activity in October 2007 is that a firm was contracted to sow winter wheat.There is no evidence upon which the Hearing Officer can conclude that in October 2007 the entire 17.31 acres or what actual portion of the two tracts was in fact sown to winter wheat.
Conclusion on Acreage Sown
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).The first element of Complainant’s case that must be proven is the actual planting of a crop on the acreage sought to be classified as agricultural.Complainant has failed to carry the burden on this essential element.The Hearing Officer concludes that based on Mr. Kohler’s testimony he prepared some portion of the ground on the 17.31 acres, he applied fertilizer to some portion of the ground and he planted winter wheat on some part of Complainant’s tracts.
However, it would be pure speculation for the Hearing Officer to conclude that the entire 17.31 acres was planted to a crop in November 2006.The best the Hearing Officer could guess was actually sown would be maybe 3 acres. However, any such conclusion would be nothing but conjecture and surmise.A determination based on speculation, conjecture and surmise means that Complainant failed to meet this essential element of its case.The failure to establish that in point of fact the entire 17.31 acres were sown to winter wheat in 2007 or 2008 demonstrates that the entirety of the tracts could not have been devoted primarily to the raising and harvesting of crops.
Agricultural Use
The question presented by the facts of this case is whether the planting of a crop on only a portion of a tract of land otherwise not previously devoted to the raising and harvesting of crops qualifies as an agricultural use?The Hearing Officer finds the inquiry must be answered no.The sowing of winter wheat on two separate occasions or unspecified parts of the subject tracts does not establish that for 2007 and 2008 the subject tracts were “devoted primarily to the raising and harvesting of crops.”Any prudent farmer, upon finding out in the early spring of 2007 that the winter wheat had failed to germinate, would have made plans for the planting of a spring or summer crop instead of simply letting the land remain vacant and unused.In like manner the failure of the fall 2007 planting, if the tracts were devoted primarily to an agricultural use, would have prompted the planting of a crop of corn or soybeans in the anticipation of harvesting a crop in the fall of 2008.The subject tracts for both 2007 and 2008 were essentially vacant and unused commercial land, not land devoted primarily to any agricultural purpose.
The Commission addressed a similar situation in a prior case.In Bakewell Investments v. Gogarty[32] taxpayer attempted to gain an agricultural classification for commercial property by the planting of a few hundred tree seedlings on a portion of land which was otherwise being held for commercial development.The Commission determined such an activity did not establish that the land was devoted primarily to the raising and harvesting of crops.
In Giddens v. Kessinger[33] it was determined that the harvesting of hay from a tract of land in an industrial park constituted an agricultural use.The land in the Giddens case had a decade long history of being used for an agricultural purpose.The entire tract was cropped for hay each year under an ongoing contract with a farmer.The present case failed to establish an active and ongoing pattern of raising and harvesting of crops.[34]
The failure of the sown crops to germinate is not the fatal flaw in the instant situation.The failure to continue with an agricultural activity of planting another crop in both 2007 and 2008 and simply letting the land lay vacant and unused clearly demonstrated the two tracts under appeal were not used for agricultural purposes.The tracts were simply being held for future commercial development or sale.Accordingly, they cannot qualify for an agricultural assessment of 12%.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is SET ASIDE.
The assessed value for the subject property in Appeal 07-32574 for tax years 2007 and 2008 is set at $441,880.
The assessed value for the subject property in Appeal 07-32575 for tax years 2007 and 2008 is set at $764,580.
Complainant 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, MO65102-0146, 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 appeal is based will result in summary denial. [35]
The Collector of St. Charles County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a 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 February 27, 2009.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[1] 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).
[2] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[5] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[7] Tr. 67:7-13, References hereafter to the Transcript will be in this format denoting –Page:Lines.
[10] Complaint for Review of Assessment – Appeal 07-32574; Commission Exhibit 1; Board Decision, dated 7/26/07.
[11] Complaint for Review of Assessment – Appeal 07-32575; Commission Exhibit 2; Board Decision, dated 7/26/07.
[17] 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).
[19] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[23] 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).
[25] True Value in Money for the combined parcels as set by the Assessor, sustained by the Board and admitted in the Complaint for Review of Assessment by Complainant as its opinion of value.