State Tax Commission of Missouri
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BRUCE BACH, |
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Complainant, |
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v. |
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Appeal No.13-76000 |
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JAMA BERRY, ASSESSOR, |
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OZARK COUNTY, MISSOURI, |
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Respondent. |
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DECISION AND ORDER
HOLDING
Decision of the Ozark County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.Complainant presented 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 $80,000, residential assessed value of $15,200.
Complainant appeared Pro Se.
Respondent appeared Pro Se.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Ozark County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013, and whether there was a discriminatory assessment of Complainant’s property.The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
1.Jurisdiction.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Ozark County Board of Equalization.
2.Evidentiary Hearing.The Evidentiary Hearing was held on January 14, 2014, at the Ozark County Courthouse, Gainesville, Missouri.
3.Identification of Subject Property.The subject property is identified by map parcel number 18-0.8-13-00-0-2.000.It is located at 2590 State Hwy P, Theodosia, Missouri.[1]
4.Description of Subject Property.The subject property consists of a 3.2 acres tract of land improved by single-family home with 1,942 square feet of living area.The property is further improved with a 6,000 square foot barn and a 2,400 square foot metal building with concrete floors and other amenities.The barns were originally constructed for the purpose of raising mushrooms.However, they were not being so used as of 1/1/13.[2]
5.Sale of Subject.The subject property was purchased by Complainant in June 2012 for $80,000.The purchase by Complainant in May 2012 was at a time relevant to a valuation of the property as of 1/1/13.The property had been taken by the Central Bank of the Ozarks under a General Warranty Deed in October 2010 in lieu of foreclosure.Prior to the bank taking the property it had been listed for sale for three years by the prior owners (Darl J. & Douglas Alders).The bank had listed the property for sale for approximately 20 months at $99,000.In April 2012, Complainant made an offer of $65,000 which was rejected by the bank.No counteroffer was tendered.In May, Complainant offered $75,000, to which the bank countered with $80,000.Complainant accepted the counteroffer at $80,000.[3]See, Methods of Valuation, infra.
6.Assessment.The Assessor appraised the property at $76,310 residential, and assessed value of $14,500; and $42,820 agricultural, an assessed value of $5,140.For a combined mixed used assessed value of $19,640.The Board of Equalization sustained the assessment.[4]
7.Complainant’s Evidence.The following exhibits were received into evidence on behalf of Complainant.
8.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.[5]
9.Presumption of Correct Assessment Rebutted.Complainant’s evidence was substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2013, to be $80,000.See, Presumption In Appeal and Complainant Proves Value, infra.
10.Respondent’s Evidence.The following exhibits were received into evidence on behalf of Respondent:
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EXHIBITS |
DESCRIPTION |
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1 – 10 |
Photographs & descriptions of buildings – Subject |
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11 – 14 |
Property Record Cards – Subject |
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15 – 19 |
Assessment Values – 2010 – 2014 |
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20 |
Statement of Basis of Value |
11.Classification of Property.The evidence on the record fails to establish that the subject property was being used for an agricultural or horticultural use as of 1/1/13.Accordingly, the correct classification for the subject property is residential and to be assessed at 19% of its true value in money.See, Classification of Property, infra.
12.Assessed Value.The assessed value – 19% of $80,000 – is $15,200.
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.[6]
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.[7]The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[8]
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[9]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.When some substantial evidence is produced by the Complainant, “however slight”, the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[10]The presumption is not evidence of value.
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.[11]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[12]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.[13]
Complainants’ evidence met the required standard and rebutted the presumption that the Board had correctly assessed the property.In addition, the evidence established that as of 1/1/13 the true value in money of the property was $80,000.
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.[14]True value in money is defined in terms of value in exchange and not value in use.[15]It is the fair market value of the subject property on the valuation date.[16]Market value is the most probable price in terms of money which a property should bring in competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeable and assuming the price is not affected by undue stimulus.
Implicit in this definition are the consummation of a sale as of a specific date and the passing of title from seller to buyer under conditions whereby:
1.Buyer and seller are typically motivated.
2.Both parties are well informed and well advised, and both acting in what they consider their own best interests.
3.A reasonable time is allowed for exposure in the open market.
4.Payment is made in cash or its equivalent.
5.Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
6.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.[17]
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.[18]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.[19] The Supreme Court of Missouri has also held that evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.[20]The evidence established that the purchase by Complainant in June 2012 was an open market arm’s-length transaction.The transaction satisfied the Standard For Valuation, supra.
Complainant Proves Value
In order to prevail, Complainant must present an opinion of market value and substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on January 1, 2013.[21]There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a Commission appeal still bears the burden of proof.The taxpayer is the moving party seeking affirmative relief.Therefore, the Complainant bears the burden of proving the vital elements of the case, i.e., the assessment was “unlawful, unfair, improper, arbitrary or capricious.”[22]A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
The owner of property is generally held competent to testify to its reasonable market value.[23]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[24]In this instance the owner’s opinion of value is based upon his actual purchase of the property in an open market transaction.This constitutes both the proper element and a proper foundation to establish fair market value.Accordingly, the owner’s opinion of value, as will now be addressed in further detail, has sufficient probative value to meet his burden of proof.
A price agreed to between a willing buyer and seller creates a presumption that the transaction was a market transaction.[25]A party seeking to admit sales evidence bears the burden of showing the sale was voluntary.[26] This burden is discharged prima facie, however, because the law presumes the sale price was “freely fixed and no under compulsion.”The burden then shifts to the opposing party to produce evidence that the sale was not voluntary.[27]
Therefore, in the present case the evidence presented by Complainant relating to his purchase of the property under appeal creates the presumption that it was a transaction between a willing buyer and seller.More importantly the evidence of the listing history and attempts to market the property before the bank took the property back, as well as the marketing by the bank all establish that the purchase by Complainant was adequate to meet the Standard For Valuation, supra.
The fact that a bank was the seller of the property did not render it an invalid sale, nor does it present any impediment to considering that sale to establish value.Complainant’s purchase was not a purchase at foreclosure.Under the presumption at law, as well as the evidence, the purchase in 2012 was a valid purchase at a time relevant to establish value as of 1/1/13.
Complainant’s evidence was substantial and persuasive to establish the fair market value of the property as of 1/1/13 to be $80,000.
Classification of Property
The Assessor, based upon her predecessor’s assessment, had the property as part residential and part agricultural.During the time the property was apparently utilized in a failed attempt to raise mushrooms, a portion of it was entitled to an agricultural classification.However, the property has not been so used for some period of time.The Hearing Officer cannot simply turn a blind eye and deaf ear to this point in the case.The property is only being utilized as a residential property.The two metal buildings (mushroom barns) on a 3 acre tract of land fail to qualify as agricultural property.Until such time as those structures are actually being used in some aspect for an agricultural purpose, there classification is to be residential.Accordingly, the assessment ratio to be applied is 19%.[28]
Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of their property on January 1, 2013; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[29]The evidence presented by Complainant to address the claim of discrimination is simply not sufficient to establish any intentional plan by the assessing officials that resulted in an assessment at a greater percentage of value than other residential property generally within Ozark County.Complainant’s discrimination failed.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Ozark County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2013 and 2014 is set at $15,200.
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. [30]
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 March 5, 2014.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Senior Hearing Officer
[8] Section 137.115.5, RSMo – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money
[9] 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)
[10] United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited.
[11] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[12] See, Cupples-Hesse, supra.
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof.It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt).It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board.The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.”Black’s Law Dictionary, Seventh Edition, p. 580
The word scintilla is defined as “1. a spark,2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition.Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.”There must be more than a spark or trace for evidence to have attained the standard of substantial.Once there is something more than a spark or trace the evidence has reached the level of substantial.Substantial evidence and the term preponderance of the evidence are essentially the same.“Preponderance of the evidence.The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”Black’s at 1201Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion.Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
[14] 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)
[15] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973)
[17] 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.
[18] 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).
[19] 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).
[22] 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)
[23] Rigali v. Kensington Place Homeowners’ Ass’n, 103 S.W.3d 839, 846 (Mo. App. E.D. 2003); Boten v. Brecklein, 452 S.W.2d 86, 95 (Sup. 1970)
[24] Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992); State, ex rel. Missouri Hwy & Transp. Com’n v. Pracht, 801 S.W.2d 90, 94 (Mo. App. E.D. 1990); Shelby County R-4 School District v. Hermann, 392 S.W.2d 609, 613 (Sup. 1965).