State Tax Commission of Missouri
|BILL’S TRUCK REPAIR, INC, et al||)|
|Complainant,||)||Appeal No. 15-11170|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
Complainants failed to present substantial and persuasive evidence that there was an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 32% of true value in money or at a ratio grossly excessive to the average 2015 commercial assessment ratio for St. Louis County.
Complainants appeared by counsel Patrick W. Keefe.
Jake Zimmerman, Assessor of St. Louis County, Missouri (Respondent) appeared by counsel Jeremy Shook.
Case heard by Senior Hearing Officer John Treu and Chief Counsel Maureen Monaghan and decided by Monaghan (Hearing Officer).
The Commission takes this appeal to determine whether there was an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 32% of true value in money, or at a ratio grossly excessive to the average 2015 commercial assessment ratio for St. Louis County.
FINDINGS OF FACT
- 1. Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The issue of commercial ratio was presented at an evidentiary hearing on March 13-14, 2017, at 7733 Forsyth, Clayton, Missouri.
- Identification of Subject Property. A complete list of properties identified by parcel/locator number is attached as Decision Exhibit A.
- Assessment. Respondent determined a TVM for the subject properties and classified them as commercial. Respondent assessed them at the statutory commercial rate of 32% of TVM.
- Board of Equalization. On September 18, 2015, the BOE notified the property owners that it “reviewed all evidence submitted regarding [the property] and … determined the valuation of [the subject] property for 2015”. The property was classified as commercial. The assessed value was set at an assessment ratio consistent with the statutory commercial assessed ratio of 32%.
- Discrimination Complainant failed to present substantial and persuasive evidence that there was an intentional plan by the assessing officials to assess property at a ratio greater than 32% of true value in money or at a ratio grossly excessive to the average 2015 commercial assessment ratio for St. Louis County.
The issue of commercial ratio was presented as to all commercial ratio appeals at an evidentiary hearing on March 13-14, 2017, at 7733 Forsyth, Clayton, Missouri.
Level of Assessment – Ratio Studies
Each party presented an expert in the field of appraisal, mass appraisal, and assessment ratio studies (Exhibits A and 1) as well as the experts’ study on the commercial assessments in St. Louis County for 2015 (ratio study) (Exhibits C and 2). Ratio studies provide information regarding the level and equity of assessments. Studies use a statistically significant number of properties and compare an assessor’s value for those properties to a market value proxy for those properties. The market value proxy is either the sale prices of properties in the jurisdiction within a relevant time period or an independent appraisal of randomly selected properties. In this appeal, the ratio studies utilized recent sales. In the studies, the experts use the following terms:
- Appraisal Level: Overall ratio of assessor’s values to market values. Level measurements provide information about the degree to which goals or legal requirements are met. Estimates of appraisal level are based on measures of central tendency.
- Assessed Value: Legally authorized fraction of market value.
- Assessment: Determination of true value, classification and location within taxing districts for ad valorem taxation.
- Coefficient of Dispersion (COD): It measures the average percentage of deviation of the ratios from the median ratio. A lower COD implies a lesser amount of variability or more equity in assessments.
- Computer-Assisted Mass Appraisal (CAMA): A process that uses a system of integrated components and software tools necessary to support the appraisal of a universe of properties through the use of mathematical models that represent the relationship between property values and supply/demand factors.
- Equalization: The process by which an appropriate governmental body attempts to ensure that property under its jurisdiction is assessed at the same assessment ratio or at the ratio or ratios required by law.
- Mean: The arithmetic average. It is created by adding together all individual samples and dividing by the number of samples.
- Median: The middle observation when the values of the data are arrayed. It divides the data into two parts.
- Price-Related Bias (PRB): It is used to measure assessment equity (regressivity/progressivity). It measures the relationship between assessment-sales ratios and value in percentage terms. For example, a PRB of .05 indicates that, on average, assessment ratios increase by 5% whenever values double.
- Price Related Differential (PRD): Itis calculated to measure assessment regressivity or progressivity. It is found by dividing the mean by the weighted mean. The comparison tests for equity between low value properties and high value properties. A PRD above 1.00 suggests that the assessment values placed on high-value parcels are relatively lower than the assessment values placed on low-value parcels.
- Progressivity: Taxation is imposed in such a manner that the tax rate decreases as the amount subject to taxation decreases.
- Ratio Study: Sales or appraisal based study designed to evaluate appraisal performance to determine if statutory requirements are met. Studies can be used to evaluate the degree of discrimination and to adjust assessed values on appealed properties to the common level.
- Regressivity: Taxation is imposed in such a manner that tax rate decreases as the amount subject to taxation increases.
- True Value in Money: Also referred to as appraised value, market value, or fair market value.
- Weighted mean: It is the sum of the assessed values divided by the sum of the individual indicators of market value.
2015 St. Louis County Commercial Ratio
The Complainant filed the following Exhibits, which were admitted into evidence:
|A||Written Direct Testimony of Robert Denne|
|B||CV of Robert Denne|
|C||Assessment Ratio Study|
|D||Written Direct Testimony of Timothy Schoemehl|
|E||Qualifications of Timothy Schoemehl|
|F||CD ROM St Louis County Assessment Roll|
|G||CD ROM St Louis County Assessment Roll 2016|
|H||Excel File – Commercial Sales 2014 – 2015 (on CD)|
|I||Excel File – Revised Sales List(on CD)|
|J||Excel File – Stratum Codes(on CD)|
|K||PDF Locator – Neighborhood Chart(on CD)|
|L||Real Estate Data Extract|
|M||Excel File – ComlOnlySalesWork data file (on CD)|
|N||Excel File – Supplemental List for Tim (on CD)|
|O||Commercial Sales Review Form|
|Q||CD ROM Deed Images from Metropolitan Title Data, Inc|
|R||DVD-ROM Assessor’s Certificates of Value (2014 & 2015)|
|S||DVD-ROM Assessor’s Sales Research Packages (2014)|
|T||DVD-ROM Assessor’s Sales Research Packages (2015)|
|U||Excel File Worksheet Draft 9-7-2016 (on CD)|
|V||Validated Sales from Tim (on CD)|
|W||Validated Sales from Tim with trim notes (on CD)|
|X||IAAO Standard on Ratio Studies 2013 (on CD)|
|Y||IAAO Standard on Verification and Adjustment of Sales (on CD)|
|Z||STC Assessor Manual, Chapter 4, Ratio Studies (2016) (on CD)|
|AA||Rebuttal Report of Robert C. Denne|
|BB||Written Direct Testimony of Robert C. Denne|
|CC||Written Direct Testimony of Timothy Schoemehl|
|DD||Sales Verification Questionnaire – 21 N. Meramec|
|EE||Sales Verification Questionnaire – 32K130454|
|FF||Real Estate Information 12M330315|
|GG||Article dated May 1-7, 2015|
|HH||Commercial Sales Summary|
|II||Real Estate Information 16H421088|
|JJ||Sales Verification Questionnaire|
|NN||Phillips Edison SEC Report|
|OO||Written Direct Testimony of Robert C. Denne|
|PP||Study using pre-BOE valuations|
|Study using pre-BOE valuations|
|RR||CD Rom – 2015-2016 Commercial Assessments|
|SS||BOE Decision 19Q130163|
To analyze the assessment of commercial property in St. Louis County for tax year 2015,
Complainants presented the testimony of Robert Denne (Denne), an expert in the field of appraisal, mass appraisal, and assessment ratio studies. Denne used sales of commercial property in St. Louis County that occurred from July 2014 through June 2015. (Exhibit C p.2) The study utilized data from the St. Louis County Assessor’s Office regarding sales of commercial properties. (Exhibit C p.2) The number of sales requiring validation was 1,228. The commercial sales were provided to an appraiser, Timothy Schoemehl (Schoemehl) for validation per IAAO standards. (Exhibit C p.3)
Schoemehl was provided with sales data obtained from the St. Louis County Assessor’s Office. Schoemehl worked with Denne to ensure the sales validation process complied with IAAO standard for ratio studies. (Exhibit A p.8) Schoemehl validated sales of commercial properties occurring in St. Louis County between July 1, 2014, and June 30, 2015. Schoemehl “reviewed information in [his] possession, including the deeds, COV, and SVQ or other notes or information from the disks provided to me. [He] looked through [the] office files for any internal research [they] may have done, including whether [they] had appraised the property or used the sale as a comparable in an appraisal. [He] consulted recognized commercial sales databases….[and] used the St. Louis County website. If [he] still had questions or concerns about the vailidity of a sales, [he] tried to identify a party to the sale…with whom [he] could follow up….” (Exhibit D p.6) Of the 1,228 sales records, 306 sales were found to be valid, arm’s-length transactions. (Exhibit A p.16)
Denne computed measures of central tendency for his ratio study – median, weighted median, mean and weighted mean. The median is the middle number in a set of numbers. The mean is the average or the sum of the numbers divided by the total count of numbers. The weighted mean is the weighted average of the ratios when each ratio is weighted by its sale price, i.e., the sum of the assessed values divided by the sum of the TVM proxy (sale price).
Denne reported the following findings for commercial assessments in St. Louis County in 2015 (Exhibit C):
Denne subsequently amended his report findings due to a “copy-paste error.” (Exhibit OO p. 2) He concluded:
that the figures appearing in columns 3 through 11 of row 6 of that Table 3 are essentially meaningless. For stratified data they should not have been reported, much less should they have been recommended….Complainant’s Exhibit QQ is a recalculation of the original Table 3 incorporating the data correctly trimmed of outliers from the same (post-BOE) dataset as was used for the remainder of the data in the original Table 3.
(Exhibit OO p. 3) Denne reported the following findings for commercial assessments in St. Louis County in 2015 in his amended table, Table 3 (Exhibit QQ):
|Assessment Weighted Median||23.9%|
|Stratum Value Weighted Mean||24.3%|
Table 3 of Exhibits C and QQ were calculated using post-BOE valuations.
Complainant also submitted Exhibit PP which “is an alternate to the original Table 3…which shows the effect on [the] calculations of substituting pre-BOE values for post-BOE values. (Exhibit PP)
|Assessment Weighted Median||30.9%||96.56|
The Respondent filed the following Exhibits which were admitted into evidence:
|1||Testimony of Patrick O’Connor|
|2||Study of Patrick O’Connor|
|3||IAAO Standard on Ratio Studies|
|4||Spreadsheet – 145 sales used|
|5||2015 Ratio Study|
|6||Testimony of Steve Robertson|
|7||Spread sheet of sales from 1/1/15 to 12/31/15|
|8||Testimony of Sandy Youtzy|
|9||Testimony of John Gillick|
|10||CV of John Gillick|
|11||SLCo sale file of 18K310513|
|12A||SLCo sale file for 12M330315|
|12B||SLCo sale file for 12M330315|
|13||SLCo sale file for 13J330980.|
|14||SLCo sale file for 18K310997|
|15||SLCo sale file for 23T531199|
|16||SLCo sale file for 28P440441|
|17||SLCo sale file for 26G112010|
|18||SLCo sale file for 26K640466|
|19||SLCo sale file for 17N540851|
|20||SLCo sale file for 27K111697|
|21||SLCo sale file for 16H421088|
|22||SLCo sale file for 09N120191|
|23A||SLCo sale file for 17L441202|
|23B||SLCo sale file for 17L441202|
|24A||SLCo sale file for 24M221111|
|24B||SLCo sale file for 25M543135|
|25||SLCo sale file for 17N430563|
|26||Testimony of Patrick O’Connor|
|27||Sur-rebuttal Testimony of Steve Robertson|
|28||Sur-rebuttal Testimony of Sandy Youtzy|
|29||St. Louis County Board of Equalization Memorandum of Waiver, dated 8/28/15, as to Keefe|
Witness Patrick M. O’Conner (O’Connor) testified on behalf of the county. O’Conner is a Certified General Real Estate Appraiser. (Exhibit 1 p.1) He has been involved in mass appraisal since 1973. (Exhibit 1 p. 2)
He prepared a report involving:
- Sales ratio study as of January 1, 2015;
- Statistical review of a separate file of sales prices for commercial properties from 2011 through 2015;
- Application of direct market models to a sample of sold and unsold commercial properties as of the valuation date of January 1, 2015;
- Performance of a direct market model values-to sales prices ratio study on a sample of sold properties; and
- Performance of appraisal ratio studies of 2015 appraised-to-direct market model values on a sample of sold and unsold commercial properties. (Exhibit 2 p.1)
O’Connor’s ratio study used 145 commercial sales from the last three quarters of 2014 and the first three quarters of 2015. O’Connor determined the following:
|Assessment Ratio||Not Calculated|
O’Connor inadvertently used post-BOE TVM rather than Assessor’s value (pre-BOE) in his study on 13 of the 145 properties. The BOE adopted the sales price as TVM as to those properties. The result is a 1:1 ratio of sale price to BOE valuation. The use of the properties had no impact on the findings.
O’Connor found little indication of regressivity.
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.
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo.
Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires or when it is necessary for a full understanding of the instant appeal. Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929) State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956). Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts. In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).
Presumption of Correctness of BOE
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. 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).
Duty to Investigate
In order to investigate appeals filed with the STC, the STC 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 Commission’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. Section 138.430.2, RSMo.
Weight to be Given Evidence
The STCs 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 Commission 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).
Trier of Fact
The STC as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as they may deem it entitled to when viewed in connection with all other circumstances. The Commission 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).
Opinion Testimony by Experts
If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto. The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, but the facts or data need not be admissible in evidence. Section 490.065, RSMo; State Board of Registration for the Healing Arts v. McDonagh, 123 S.W.3d 146 (Mo. SC. 2004); Courtroom Handbook on Missouri Evidence, Wm. A. Schroeder, Sections 702-505, pp. 325-350; Wulfing v. Kansas City Southern Industries, Inc., 842 S.W.2d 133 (Mo. App. E.D. 1992).
Three expert witnesses were presented at hearing as to the average level of assessment of commercial property in St. Louis County in 2015. All experts had experience in appraisal and mass appraisal for ad valorem tax purposes as well as the review of valuation by mass appraisal.
Complainant’s Burden of Proof
The taxpayer is the moving party seeking affirmative relief, therefore, the taxpayer bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious,” by substantial and persuasive evidence. 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).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). 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.
Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).
Complainants allege discrimination as their ground for appeal. The issue is whether the assessment is in violation of the Fourteenth Amendment of the Constitution of the United States, as it attempts to deprive and deny the Complainant the equal protection of the laws. “The purpose of the equal protection clause of the Fourteenth Amendment is to secure every person within the state’s jurisdiction against intentional and arbitrary discrimination, whether occasioned by express terms of a statute or by its improper execution through duly constituted agents.” Sunday Lake Iron Co v Wakefield Tp, 247 U.S. 350, 38 S. Ct 495, 62 L.Ed 1154 (1918)
To obtain a reduction in assessed value based upon discrimination, the complaining taxpayer must (1) prove the true value in money of the subject property as of the taxing date; and (2) show an intentional plan of discrimination by the assessor, which resulted in an assessment at a greater percentage of value than other property within the same class and the same taxing district, or, in the absence of such an intentional plan, show that the level of assessment is “so grossly excessive as to be inconsistent with an honest exercise of judgment.” Zimmerman v. Mid–America Financial Corp., 481 S.W.3d 564, 571 (Mo. App. E.D. 2015), quoting Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 78 (Mo. banc 1986).
Given the two-part test for proving a claim of discrimination in the context of ad valorem taxation as stated by Missouri courts, in the instant appeal, Complainants were first required to prove the TVM of the subject property. Complainants presented as evidence of TVM the Decision and determination of value by the BOE. The BOE “reviewed all the evidence submitted…and…determined the valuation of [the subject] property for 2015” was that of the Respondent’s TVM. (BOE Decision) The assessed values as set by the Respondent were set at a ratio consistent with the statutory commercial assessed ratio of 32%. In other words, the actual level of assessment of the subject properties in these appeals was 32%.
The second part of the test requires Complainants to show an intentional plan of discrimination by the assessor, which resulted in an assessment at a greater percentage of value than other property within the same class and the same taxing district, or, in the absence of such an intentional plan, show that the level of assessment is “so grossly excessive as to be inconsistent with an honest exercise of judgment. There is no evidence that there was an intentional plan of discrimination by the assessing officials, so we must determine if the Complainant presented substantial and persuasive evidence to show that the level of their assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment.
Missouri courts have consistently held that the proper method of determining discrimination is to compare the actual level of assessment of the subject property as determined by the assessor to the common level of assessment for the subject property’s subclass. Mid-America Financial Corp., 481 S.W.3d at 574, citing Savage, 722 S.W.2d at 72.
“By requiring that the level of an assessment be so grossly excessive as to be inconsistent with an honest exercise of judgment in cases in which intentional discrimination is not shown, the courts and the STC refrain from correcting assessments which reflect no more than de minimus errors of judgment on the part of assessors.” Mid-America Financial Corp., 481 S.W.3d at 571 (internal quotation omitted). “This standard recognizes that while practical uniformity is the constitutional goal, absolute uniformity is an unattainable ideal.” Id. (internal quotation omitted).
In deciding whether the assessment of the subject property is “grossly excessive” or nothing more than a “de minimus error of judgment,” the STC must determine the common level of assessment for the class of property at issue within the taxing district. In Savage, 722 S.W.2d at 79, the Missouri Supreme Court reasoned:
The “common level of assessment” has been defined as a single ratio of true value used in assessing each property in a taxing district. [citation omitted] The “average level of assessment” means the “arithmetical mean of the varying percentages of true value applied by . . . the assessor in assessing properties within a taxing district.” [citation omitted]
A taxpayer has the right to have his “assessment reduced to the percentage of that value at which others are taxed[.]” [citation omitted]
The Missouri Supreme Court has held that the proper method of analyzing discrimination compares the common level of assessment for similarly-situated properties to the actual level of assessment imposed on the subject property. Mid-America Financial Corp., 481 S.W.3d at 571; Savage, 722 S.W.2d at 74. A necessary component of this comparison is the TVM of both the subject property and the similarly-situated properties, i.e., properties within the same class as the subject property. See Id.; see also Savage, 722 S.W.2d at 74. Once the TVM of the subject property and the similarly-situated properties has been determined, the STC can calculate at what percentage or ratio of TVM the subject property and the similarly-situated properties, respectively, have been assessed. Mid-America Financial Corp., 481 S.W.3d at 571. This determination requires a comparison not between the common level of assessment and the statutory assessment ratio, but between the common level of assessment and the actual level of assessment for the subject property. Id. at 574. Neither Missouri courts nor the STC has established a “bright-line” test to identify what constitutes a grossly excessive assessment as opposed to a mere de minimus error in judgment. Id. at 575. The assessment in each given case must be analyzed against the assessment under the median ratio to address the grossly excessive factor. Id. The STC has found a 5% disparity between the common level of assessment and the actual level assessment to be de minimus. Town and Country Racquet Club v. Morton, 1989 WL 41005 (Missouri State Tax Commission) (affirmed on appeal in Town & Country Racquet Club v. State Tax Commission of Missouri, 811 S.W.2d 403 (Mo. App. E.D. 1991).
It is established under Missouri law that when a taxpayer’s property is subject to an assessment proportionately higher than other property in the same class, the assessment should be reduced. See, e.g., Koplar v. State Tax Commission, 321 S.W.2d 686 (Mo. 1959). The Constitutions of Missouri and the United States require that the subject property be assessed at a ratio no higher than the common level or average for the same class of subject. Fourteenth Amendment, U.S. Constitution, Article X, Sections 3, 4(a), Missouri Constitution 1945; Breckenridge Hotels v. Leachman, 571 S.W.2d 251, 252 (Mo. banc 1978); May Department Stores Company v. State Tax Commission, 308 S.W.2d 748, 762 (Mo. 1958).
To determine the common level of assessment, the experts looked to measures of central tendency. In this case, the issue of dispute between the parties is the proper measure of central tendency: the median, mean or the weighted mean.
The inquiry in a discrimination appeal is to determine a single ratio representing the assessments of varying properties within the same classification – the average or common level of assessment. Complainant argues that the assessments in St. Louis County in 2015 for commercial properties were regressive – assessment ratio decreases as the value of the property increases. Complainant argues that when regressivity is present, the weighted mean is the only appropriate measure.
The Complainant is one of more than 2,600 claims of discrimination by commercial property owners in St. Louis County for the 2015-2016 assessment cycle. The valuations of the properties vary. The STC cannot look at any particular property value and determine that all properties in excess of that value are subject to discrimination; “there is no dividing line”. (Tr. Vol II. P. 231) The evidence did not establish a point estimate for all properties within the subclass, i.e. there is no common level of assessment. Commercial properties, according to the Complainant’s study, are over assessed, accurately assessed, and under assessed. Isolated and uncoordinated reductions in selected assessments could produce additional disparities, i.e., discrimination.
All three experts calculated a median. The medians calculated by the three experts were within a consistent range. The calculated medians ranged between 30.7% and 31.1%. The parties’ median levels of assessment are within .004 of each other. Such consistent findings as to the median assessment are substantial and persuasive. The median level of assessment in St. Louis County for 2015 was approximately 31%. In previous decisions, the STC found 5% disparity to be de minimus. Town and Country Racquet Club v. Morton, 1989 WL 41005. Such disparity between the statutory level of assessment and the average level of assessment is not so grossly excessive as to be entirely inconsistent with an honest exercise of judgment and, hence, does not prove discrimination.
Complainant’s argument to use weighted mean is not persuasive. It is the only measure of central tendency that indicated a disparity in commercial assessments. Other statistical measures, such as the mean, median, or COD utilized by the experts in their studies, did not indicate discrimination in assessments. One statistical measure found within a study is not substantial and persuasive evidence.
The same issue was raised in Industrial Development Authority of Kansas City v. John Kelley, Jackson County, 1989 WL 96234 (Mo. St. Tax Comm.) The STC, in that decision, stated “[i]t is generally accepted that when adjusting individual assessments to the average level of assessment the median ratio should be used.” The STC has consistently accepted such measure of central tendency. Zimmerman v. Mid-America Financial Corporation, 481 S.W.3d 564, 577 (Mo. Ct App. ED, 2015) and West County BMW v. Muehlheausler, STC 05-12569. The STC’s Assessor Manual sets forth that the median is the measure to determine if a county is accurately assessing property. A finding that the median is the most persuasive measure of central tendency is a reasonable and sound finding in a particular appeal based upon evidence presented.
The assessed valuation for the subject properties as determined by the BOE is AFFIRMED.
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 August 23, 2018.
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 23rd day of August, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Complainants represented by Sansone Tax Representative and Counsels Thomas Campbell and Jason Turk filed the following exhibits as part of the hearing to determine the common level of assessment (ratio) for commercial properties in St. Louis County in 2015:
|A||Written Direct Testimony of Robert Gloudemans|
|B||Written Direct Testimony of John Hottle|
|C||Commercial Ratio Study of Robert Gloudemans|
|D||Supplement to Appendix 2 of Exhibit C|
|E||Testimony of Robert Gloudemans|
|F||Testimony of John Hottle|
|G||Impact Notice 10L420653|
|H||Impact Notice 13K520081|
|I||Impact Notice 14N120030, Letters from Assessor|
|J||Impact Notice 15N130407, Letters from Assessor|
|K||Impact Notice 15K240583|
|L||BOE Decision 16M530069, Impact Notice|
|M||Impact Notice 16P610696, Letters from Assessor|
|N||Impact Notice 19Q140113|
|O||BOE Decision 21K331251, Impact Notice|
|P||BOE Decision 22S121644, Impact Notice|
|Q||Impact Notice 23S540286, Letters from Assessor|
|R||Impact Notice 28L640434|
|S||Impact Notice 29H210253, Letters from Assessor|
Decision Exhibit A
|Appeal No.||Complainant||Parcel/Locator Number|
|15-11170||BILL’S TRUCK REPAIR INC||13N131417|
|15-11387||INSITUFORM TECHNOLOGIES LLC||17V220034|
|15-11400||CROWN DIVERSIFIED INDUSTRIES CORP||17W320056|
|15-11401||SCOTT JOE H SR TRUSTEE ETAL||17W320254|
|15-11403||EDISON HOLDINGS LLC||17W320605|
|15-11433||CROWN DIVERSIFIED INDUSTRIES CORP||18V430058|
|15-11434||TOPEKA AIRCRAFT SALES & SERVICE INC||18W640058|
|15-11466||CRYLEN JEROME R TRUSTEE ETAL||19Q230131|
|15-11474||FORTY POINTE L L C||19R620069|
|15-11475||SCOTT FAMILY PROPERTIES LP||19S130103|
|15-11476||MCDONALD’S USA LLC||19S410328|
|15-11479||BERKSHIRE REALTY LIMITED PARTNERSHIP||20K240024|
|15-11484||DDL PARTNERSHIP LP||20K330600|
|15-11485||FRISELLA PROPERTIES L L C||20K330646|
|15-11486||1002 – 1010 HANLEY INDUSTRIAL COURT LLC||20K330729|
|15-11488||DDL PARTNERSHIP LP||20K331012|
|15-11489||DDL PARTNERSHIP LP||20K331021|
|15-11490||DDL PARTNERSHIP LP||20K331030|
|15-11491||DDL PARTNERSHIP LP||20K331041|
|15-11496||SUNNEN PRODUCTS COMPANY||21J111441|
|15-11497||SUNNEN PRODUCTS COMPANY||21J130903|
|15-11498||SUNNEN PRODUCTS COMPANY||21J130912|
|15-11503||DDL PARTNERSHIP L P||21J230681|
|15-11505||MAPLE KING L L C||21J242295|
|15-11506||ROTHSCHILD DEVELOPMENT L T D||21J242350|
|15-11507||Rothschild Development Ltd||21J242361|
|15-11508||Rothschild Development Ltd||21J242394|
|15-11516||ABW HOLDINGS LLC||21K211432|
|15-11522||2343 2355 SOUTH HANLEY RD L L C ETAL||21K620573|
|15-11529||2343 2355 SOUTH HANLEY RD L L C ETAL||21K640854|
|15-11530||2335-37 SOUTH HANLEY ROAD LLC||21K640863|
|15-11533||FELICE PROPERTIES LLC||21L220073|
|15-11535||MCKNIGHT DEVELOPMENT LLC||21L321185|
|15-11536||MCKNIGHT DEVELOPMENT LLC||21L321314|
|15-11543||AUTOHAUS WEST INC||22J431694|
|15-11547||BKM Development LLC||22K110121|
|15-11550||MORGNER DONALD J TRUSTEE||22K530826|
|15-11551||Rothschild Development Ltd||22K610443|
|15-11556||CROWN DIVERSIFIED INDUSTRIES CORP||22M620374|
|15-11557||CROWN DIVERSIFIED INDUSTRIES CORP||22M620734|
|15-11558||MANCHESTER 270 DEVELOPMENT INC||22O530251|
|15-11560||GERSHMAN BETTIE TRUSTEE||22O620653|
|15-11567||EMERALD GROUP INC THE||22P220328|
|15-11574||CLARKSON PLAZA LLC||22T210763|
|15-11578||CLARKSON CLAYTON CEN ASSOC JTVENTURE||22T420313|
|15-11579||CLARKSON CLAYTON CEN ASSOC JTVENTURE||22T440096|
|15-11581||WILKEN DAVID RENEE C H/W||22T510342|
|15-11582||EDWARD SIMON PAINTING COMPANY||23J520575|
|15-11585||BERNERT JOSEPH TRUSTEE||23K610301|
|15-11586||BERNERT JOSEPH C TRUSTEE||23K610602|
|15-11587||RED HOLDINGS LLC||23K630244|
|15-11590||DONE PROPERTIES L L C||23M120471|
|15-11595||NICO PROPERTIES II L L C||23Q440180|
|15-11596||NICO PROPERTIES II L L C||23Q441116|
|15-11597||H & H INVESTMENTS||23Q530463|
|15-11600||ST LOUIS CAR WASH PROPERTIES LLC||23Q540712|
|15-11605||DOUROS IRENE V TRUSTEE||23R540924|
|15-11607||DOUROS IRENE V TRUST||23R541116|
|15-11608||SUNTRUP WILLIAM N TRUSTEE ETAL||23R541208|
|15-11609||BCJ PROPERTIES LLC||23S430431|
|15-11610||BCJ PROPERTIES LLC||23S430505|
|15-11611||MCDONALDS REAL ESTATE CO||23S540550|
|15-11617||PATAM PROPERTIES MO GENERAL PTNSP||23T640187|
|15-11619||VILLAGE PLAZA L L C||23U140639|
|15-11620||PICCIONE PETER P NANCY A H/W TRUSTEES||23U340194|
|15-11621||WESTWOODS CENTER II L L C A MISSOURI LIM||23U340325|
|15-11624||MONOLO TIMOTHY C||23U640441|
|15-11625||ST LOUIS CAR WASH PROPERTIES LLC||24J410224|
|15-11627||MCDONALDS REAL ESTATE CO OF COLUMBIA MD||24K310695|
|15-11628||BAKULA PAUL G JANET M H/W||24M110204|
|15-11629||RATERMANN CARL J & VICKI L H/W||24M111175|
|15-11630||LIN PAUL CHAO CHING & HOMEI SHIU H/W||24M120892|
|15-11632||ROBERT VATTEROTT PROPERTIES INC||24M121295|
|15-11633||MITCHELL ELIZA P & CARL M H/W TRS||24M121361|
|15-11635||PETERSON WARREN J TRUSTEE||24M320809|
|15-11636||SHATOFF JEROME & DEBRA K H/W||24M431044|
|15-11639||RRS REAL ESTATE HOLDINGS LLC||24M520953|
|15-11644||YARD PROPERTIES LLC THE||24O410384|
|15-11648||ZIEGLER WILLIAM M BARBARA R H/W||24P220409|
|15-11650||HOWARD M & SHIRLEY J SUTTON LLC||24Q320555|
|15-11652||SUNSET PROPERTIES L L C||24R311004|
|15-11654||CCE PROPERTIES LLC||24R331941|
|15-11655||DAU THE HOUSE FURNISHER INCORPORATED||24V510375|
|15-11661||ELLSWORTH BREIHAN BUILDING COMPANY||25K531026|
|15-11662||ELLSWORTH BREIHAN BUILDING COMPANY||25K531082|
|15-11664||ST LOUIS CAR WASH PROPERTIES LLC||25K531169|
|15-11674||VORHOF DUENKE PROPERTY II L L C ETAL||25M130416|
|15-11677||SUNSET LAND HOLDINGS L L C||25M232220|
|15-11678||BECKER RUSSELL O LAVERNE C H/W TRS||25M240012|
|15-11682||KIRKWOOD SURE WING L L C||25M421732|
|15-11684||Manfried Investments LLC||25M640276|
|15-11685||Manfried Investments LLC||25M640287|
|15-11686||Manfried Investments LLC||25M640403|
|15-11691||L E SAUER MACHINE CO||25O420340|
|15-11692||SCHOOLING L L C||25O510012|
|15-11700||U-GAS STL MACKENZIE LLC||26J231832|
|15-11707||P M LEACH PROPERTIES INC||26O210340|
|15-11709||QUICK POINT INC||26O220251|
|15-11710||QUICK POINT PENCIL CO||26O220350|
|15-11714||BRANDT & COMPANY LLC||26O630078|
|15-11719||STOJKOVIC ALEXANDER & ZITA H/W TRUSTEES||26P320626|
|15-11725||RENNER RAYMONDD & MAEDELL ANN H/W||27H140262|
|15-11737||SUNSET 11 LLC||27L410913|
|15-11740||HERITAGE VILLAGE CENTER INC||27L530477|
|15-11744||SMITH-TREANOR COMPANY A PTNSP||27O530386|
|15-11745||CGM SMITH LLC A MISSOURI LIMITED LIABILI||27O530397|
|15-11748||RUTH INVESTMENTS INC A MISSOURI CORPORAT||27O610576|
|15-11749||BRE L L C||27O610631|
|15-11750||STIFEL CARL C BARBARA H/W||27O630080|
|15-11753||MARITZ FAMILY DEVELOPMENT LLC||27P540322|
|15-11765||MOSBLECH ANN TRUSTEE||28H221652|
|15-11769||MILFORD HENRY EMILY H/W ETAL||28J420557|
|15-11771||STACK-EM & RACK-EM LLC||28J430921|
|15-11773||JONES GARY C & KATHLEEN A H/W TRS ETAL||28K310501|
|15-11774||TRIPLE J PROPERTIES L L C||28K330235|
|15-11776||ACROPOLISPM SOUTHTOWNE24 LLC||28K340388|
|15-11777||11140 SOUTH TOWNE SQUARE LLC||28K340421|
|15-11779||CONCORD VILLAGE NO 9 L L C||28K430522|
|15-11784||QUATRO L L C||28K521031|
|15-11785||BECHTLE ESTHER TRUSTEE ETAL||28K541138|
|15-11790||D & D SPORTS ENTERPRISES LLC||28L620272|
|15-11791||TEXACO REFINING & MARKETING INC||28L620755|
|15-11792||DAYBREAK INVESTMENTS L L C||28L620777|
|15-11795||FRISELLA PROPERTIES L L CETAL||28N110412|
|15-11796||FRISELLA PROPERTIES L L CETAL||28N110485|
|15-11799||ST LOUIS CAR WASH PROPERTIES LLC||28P440450|
|15-11811||U N K O PROPERTIES L L C||29J540645|
|15-11814||JEWEL FAMILY LP||29L120751|
|15-11816||MUCKLER RICHARD F TRUSTEE ETAL||29L510844|
|15-11817||RICHARD ENTERPRISES L L C||29N420103|
|15-11821||KARAGIANNIS INVESTMENT CORPORATION||29V331278|
|15-11835||WOLF MICHAEL L& BERNITABORNH/W ETAL||31H110523|
|15-11839||BASLER LEONARD L TRUSTEE||31J510706|
|15-11841||SUNSET PROPERTIES L L C||32H430695|
|15-11847||BARRON CAPITAL L P||32K440957|
|15-13691||Chevron USA Inc.||14N230452|
|15-13693||CHEVRON CHEMICAL COMPANY||14N240215|
|15-16884||SNH Maryland Heights LLC||11P320170|
|16-10059||BGR 18336 LLC||17V110430|
|16-10060||REGEV NIR TRUSTEE ETAL||22T231030|
|16-10061||REGEV NIR TRUSTEE ETAL||22T231041|
|16-10141||OBRIEN JAMES K FAMILY TRUST C/O KATHLEEN||12H121722|
|16-10142||PROPERTIES OF FERGUSON L L C||12H121933|
|16-10143||Schnuck Markets Inc||13H430692|
|16-10144||SM PROPERTIES L P||13L241031|
|16-10145||Schnuck Markets Inc||13L241064|
|16-10146||HANDY REALTY LLC||14N531133|
|16-10147||Schnuck Markets Inc||15N330043|
|16-10148||DESCO INVESTMENT COMPANYL L C||15N340273|
|16-10149||DESCO INVESTMENT COMPANYL L C||15N620157|
|16-10151||Lou Fusz Properties LLC||16M630037|
|16-10152||Schnuck Markets Inc||17N620698|
|16-10154||WOODS MILL LLC||19Q410070|
|16-10155||U S BANK NATIONAL ASSOCIATION||20J241370|
|16-10157||Als Property Holdings LLC||21J130976|
|16-10158||Schnuck Markets Inc||22M520395|
|16-10159||Chlanda Josephine F Etal J/T||23K110928|
|16-10160||Ruthellen Yodon Family Living Trus||23K111253|
|16-10161||ESSLINGER CAROL L TRUSTEE||23Q441400|
|16-10162||Cross Oil Company||24V520202|
|16-10163||Cross Oil Company||24V630011|
|16-10164||Odonnell Francis E Jr. & Kathleen E H/W||25M442760|
|16-10165||Odonnell Francis E Jr. & Kathleen E H/W||25M442771|
|16-10166||BEHRCO REAL ESTATE MANAGEMENT LLC||27J110181|
|16-10167||REDEXIM NORTH AMERICA INC||27Q440113|
|16-10168||MUNGENAST BARBARA TRUSTEE||28K521064|
 The decision addresses 175 appeals. A complete list of appeals is attached as Decision Exhibit A.
 Two sets of Complainants presented evidence at the hearing as to the ratio of assessment of Commercial properties. The groups were labeled by the parties for ease of reference as “PAR” Complainants and “Sansone” Complainants. Complainants are in the PAR group. Exhibits filed on behalf of Sansone group are listed at the end of this Decision and Order.
 IAAO is the acronym for the International Association of Assessing Officers. Its members include government assessment officials and others interested in the administration of the property tax. They provide education, resources and standards for ad valorem taxation.
 Witness Robert Goudemans also testified at the ratio hearing. Gloudemans is the expert witness for Complainants (“Sansone” Complainants) represented by Attorney Thomas Campbell and Attorney Jason Turk. Gloudemans has training, experience and education in the field of appraisal, mass appraisal and mass appraisal review. The witness conducted a ratio study for the 2015 commercial properties in St. Louis County. He used 258 sales in his study comparing the verified sale data to post-BOE valuations. (Transcript p. 95)