STATE TAX COMMISSION OF MISSOURI
| BOB BLACKBURN, | ) | ||
| ) | |||
| Complainants, | ) | ||
| ) | |||
| v. | ) | Appeal No. 18-76002 through 18-76005 | |
| ) | |||
| JAMA BERRY, ASSESSOR, | ) | ||
| OZARK COUNTY, MISSOURI, | ) | ||
| ) | |||
| Respondent | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of Ozark County (BOE) is SET ASIDE, in part, and AFFIRMED, in part. The parties presented substantial and persuasive evidence to rebut the correct assessment by the BOE regarding the subject property set forth in Appeal 18-76002. However, Complainant Bob Blackburn (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the other subject properties as of January 1, 2017.
Complainant appeared pro se.
Respondent Jama Berry, Assessor, Ozark County, Missouri, (Respondent) appeared pro se.
Case heard and decided by Senior Hearing Officer John Treu (Hearing Officer).
ISSUE
Complainants appealed on the ground of overvaluation. Respondent set the TVM of the subject properties as follows:
| Appeal No. | TVM |
| 18-76002 | $42,700 residential (including 1 acre), $2,700 agricultural (6 acres Grade 6 and 22 acres Grade 7) |
| 18-76003 | $11,300 residential |
| 18-76004 | $18,000 residential (including 1 acre), $20,100 agricultural (13.2 acres Grade 6 and 65.8 acres Grade 7) |
| 18-76005 | $11,500 residential (including 1 acre), $3,320 agricultural (3 acres Grade 6 and 36 acres Grade 7) |
The BOE set the TVM of the subject properties as follows:
| Appeal No. | TVM |
| 18-76002 | $42,700 residential, $2,700 agricultural |
| 18-76003 | $11,300 residential |
| 18-76004 | $18,000 residential, $20,100 agricultural |
| 18-76005 | $11,500 residential, $3,320 agricultural |
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 or improvement to a property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the TVM for tax year 2018 for the subject properties as the properties existed on January 1, 2017, under the economic conditions as they existed on January 1, 2017.
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. Complainants timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on October 17, 2018, at the Ozark County Courthouse, Gainesville, Missouri.
- Identification of Subject Properties. The subject properties are identified as follows:
| Appeal No. | Parcel/Locator | Address |
| 18-76002 | 14-0-5-16-000-000-0003.001 | Rural Ozark County, Missouri |
| 18-76003 | 09-0-7-26-000-000-0002.005 | Rural Ozark County, Missouri |
| 18-76004 | 15-0-1-12-000-000-0001.000 | Rural Ozark County, Missouri |
| 18-76005 | 11-0-8-34-000-000-0009.000 | Rural Ozark County, Missouri |
- Description of Subject Properties. The subject properties are described as follows:
| Appeal No. | Description |
| 18-76002 | 29 acre lot improved by a residence built in 1997, a 2004 utility building, a 2004 shed, 2 wells, and 1 septic system. |
| 18-76003 | 5.02 acre vacant lot. |
| 18-76004 | 80 acre lot improved by a mobile home, a barn, 1 well, and 1 septic system. |
| 18-76005 | 40 acre vacant lot with 1 well and 1 septic system. |
- Assessment. Respondent set a TMV on the subject properties as follows:
| Appeal No. | TVM |
| 18-76002 | $42,700 residential (including 1 acre), $2,700 agricultural (6 acres Grade 6 and 22 acres Grade 7) ($45,400 total) |
| 18-76003 | $11,300 residential |
| 18-76004 | $18,000 residential (including 1 acre), $20,100 agricultural (13.2 acres Grade 6 and 65.8 acres Grade 7) ($38,100 total) |
| 18-76005 | $11,500 residential (including 1 acre), $3,320 agricultural (3 acres Grade 6 and 36 acres Grade 7) ($14,820 total) |
- Board of Equalization. The BOE set a TVM on the subject properties as follows:
| Appeal No. | TVM |
| 18-76002 | $42,700 residential, $2,700 agricultural |
| 18-76003 | $11,300 residential |
| 18-76004 | $18,000 residential, $20,100 agricultural |
| 18-76005 | $11,500 residential, $3,320 agricultural |
- Complainant’s Evidence. Complainant opined that the subject properties’ assessed values, as of January 1, 2017, should have been as follows:
| Appeal No. | TVM |
| 18-76002 | $5,600 |
| 18-76003 | $1,040 |
| 18-76004 | $5,250 |
| 18-76005 | $1,000 |
To support his opinion of value, Complainant offered the following evidence:[1]
| Exhibit | Description | Ruling |
| Exhibit A | Chart of Ozark County Residential Values of 2014 through 2017 | Admitted |
| Exhibit B | Map of Area | Admitted |
| Exhibit C | Chart of 2016 and 2017assessed values, taxes, and percent increases | Admitted |
| Exhibit D | Tax Receipt for 14-0-5-16-000-000-0003.001 (Appeal 18-76002) | Admitted |
| Exhibit D-1 | Photograph of One Destroyed Structure and Well on 14-0-5-16-000-000-0003.001 | Admitted |
| Exhibit E | Tax Receipt for 11-0-8-34-000-000-0009.000 (Appeal 18-76005) | Admitted |
| Exhibit E-1 | Photographs for 11-0-8-34-000-000-0009.000 | Admitted |
| Exhibit F | Tax Receipt for 15-0-1-12-000-000-0001.000 (Appeal 18-76004) | Admitted |
| Exhibit F-1 | Photographs for 15-0-1-12-000-000-0001.000 | Admitted |
| Exhibit G | Tax Receipt for 09-0-7-26-000-000-0002.005 (Appeal 18-76003) | Admitted |
Respondent did not object to Complainant’s exhibits, which were received into the record.
Exhibit A sets forth Complainant’s understanding of the total valuation of all residential properties in Ozark County for tax years 2014 to 2017 and the corresponding increases from year to year. Exhibit B consists of a map of the area with certain of Complainant’s properties marked. Exhibit C consists of a chart created by Complainant of the 2016 and 2017 assessed values of certain properties, the taxes imposed, and the percentage increases. Exhibits D and D-1 consist of the tax receipt and photographs related to appeal 18-79002. Exhibits E and E-1 consist of the tax receipt and photographs related to appeal 18-79005. Exhibits F and F-1 consist of the tax receipt and photographs related to appeal 18-79004. Exhibit G consists of the tax receipt related to appeal 18-79003.
In conjunction with the presentation of his exhibits, Complainant argued he was being assessed for destroyed structures. Respondent showed Complainant that such structures were not assessed and Complainant appeared to acknowledge his mistake.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject properties as of January 1, 2017, was correct. Respondent offered the following evidence:
| Exhibit | Description | Ruling |
| Exhibit 1 | Cost Share Worksheet | Admitted |
| Exhibit 2 | Cost of Well Receipt | Admitted |
| Exhibit 3 | Map and 12 CSR 23-3.090 | Admitted |
| Exhibit 4 | Septic Tank and Well Drilling Quotes | Admitted |
| Exhibit 5 | Average Cost of Septic System Installation | Admitted |
| Exhibit 6 | Average Cost of Well Drilling | Admitted |
| Exhibit 7 | Information on How to Plug a Well | Admitted |
| Exhibit 8 | Handwritten Summary of Parcel Changes | Admitted |
| Exhibit 9 | PRC for 09-0-7-26-000-000-0002.005 | Admitted |
| Exhibit 10 | PRC for 09-0-7-26-000-000-0002.005 | Admitted |
| Exhibit 11 | PRC for 14-0-5-16-000-000-0003.001 | Admitted |
| Exhibit 12 | PRC for 15-0-1-12-000-000-0001.000 | Admitted |
| Exhibit 13 | Small Acreage Chart by Category and Acres | Admitted |
Complainant did not object to Respondent’s exhibits, which were received into the record.
Exhibit 1 is a cost-share worksheet for well drilling. Exhibit 2 is a water well drilling invoice from another property in the county. Exhibit 3 is a map and the code of state regulation for well construction. Exhibit 4 shows septic and well drilling estimates. Exhibit 5 is an article regarding septic system costs from homeadvisor.com. Exhibit 6 is an article regarding well drilling costs from homeadvisor.com. Exhibit 7 is information on how to plug an abandoned well from the Missouri Department of Natural Resources. Exhibit 8 consists of a summary of the changes to the subject properties. Exhibits 9 through 12 are the property record cards (PRC) for the subject properties. Exhibit 13 is a small acreage chart which shows land values in the county based upon number of acres and location.
- Presumption of Correct Assessment Rebutted in 18-79002 and Not Rebutted in 18-79003, 18-79004, and 18-79005. The parties presented substantial and persuasive evidence to rebut the correct assessment by the BOE regarding the subject property set forth in appeal 18-76002. However, Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE and to establish the true value in money (TVM) of the other subject properties as of January 1, 2017, in appeals 18-76003, 18-76004, and 18-76005.
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, including the application of any abatement. 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 property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
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. Section 138.430.2 RSMo (2000) as amended. 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. Id.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. 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). See also, 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).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC appeal still bears the burden of proof. The taxpayer is the moving party seeking affirmative relief. Therefore, Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.” Westwood Partnership, 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. W.D. 1991).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d 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. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347. “Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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.
Discussion
Other than as to the subject property in appeal 18-76002, Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the TVM of the subject properties as of January 1, 2017. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
During the Evidentiary Hearing it was discovered that only one septic system exists on the subject property set forth in appeal 18-76002. Respondent stated that the TVM of the subject property in such appeal should be reduced by $3,700 from the residential land value resulting in a TVM of such parcel of $39,000 residential, $2,700 agricultural.
Complainant did not present any evidence utilizing one or more of three generally accepted approaches to valuing real property for ad valorem tax purposes. Complainant’s evidence focused on the percentage increase in his property values and not on the correct TVM of the properties. Complainant offered no expert testimony. Complainant argued he was being assessed for destroyed structures; however, Respondent showed Complainant that such structures were not assessed and Complainant appeared to acknowledge his mistake. The Hearing Officer would be required to participate in speculation and conjecture to determine a TVM for the properties based upon Complainant’s evidence in appeal numbers 18-76003, 18-76004, and 18-76005.
ORDER
The TVM for the subject properties as determined by the BOE is SET ASIDE, in part, and AFFIRMED, in part. The assessed value for the subject property for tax year 2018 is as follows:
| Appeal No. | Assessed Value | TVM |
| 18-76002 | $7,735 | $39,000 residential, $2,700 agricultural |
| 18-76003 | $2,150 | $11,300 residential |
| 18-76004 | $5,830 | $18,000 residential, $20,100 agricultural |
| 18-76005 | $2,590 | $11,500 residential, $3,320 agricultural |
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 Ozark 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 November 20, 2018.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 20th day of November, 2018, to: Complainants(s) counsel and/or Complainants, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator
[1] Complainant’s exhibits were labeled numerically. They have been relabeled alphabetically, consistent with the Order of October 2, 2018.