State Tax Commission of Missouri
|CASA PROPERTIES, INC,||)|
|v.||)||Appeal No. 13-13227|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS CO., MISSOURI,||)|
DECISION AND ORDER
Decision of the County Board of Equalization lowering the assessment made by the Assessor is SET ASIDE. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization; however, Respondent’s appraisal provided substantial and persuasive evidence of the subject property as of January 1, 2013, which is actually lower than the value set by the Board of Equalization.
True value in money for the subject property for tax years 2013 and 2014 is set at $71,000, residential assessed value of $13,490.
Complainant appeared by attorney Patrick Keefe.
Respondent appeared by attorney Steven Robson.
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals on the ground of overvaluation the decision of the St. Louis County Board of Equalization, which lowered 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. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction and improvement to the property. Section 137.115.1 RSMo
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on December 21, 2015 at St. Louis County Administration Building, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 26J330915. It is further identified as 9200 Arrow, St. Louis County, Missouri. (Exs. A & 1)
- Description of Subject Property. The subject property consists of a 8,856 square foot tract of land improved by a single family, residential ranch style home, with 1,084 square feet of living area. Amenities include 2 bedrooms, 1 bath, a 1 car attached garage and a patio (Ex. 1)
- Sale of Subject. The subject property was purchased by Complainant on June 6, 2013 for $55,000. (Ex. A)
- Assessment. The Assessor valued the property at $94,700, an assessed residential value of $17,993. The Board of Equalization reduced the assessor’s valuation of the property to $84,900, an assessed value of $16,131. (Complaint for Review of Assessment)
- Complainant’s Evidence. Complainant offered into evidence Exhibits A and Exhibit B. Exhibit A consisted of a Final Settlement relating to the purchase of the property by Complainant on June 6, 2013. Exhibit B consisted of the Written Direct Testimony of Les Gaffner. Only Exhibit A was objected to, based upon the reason that the settlement statement was signed by Matthew Gaffner as “Vice President” of CASA Properties, Inc. and not by Les Gaffner. The objection was overruled. Exhibits A and B were received into the evidentiary record.
- No Substantial and Persuasive Evidence of New Construction & Improvement. Although there was evidence of new construction and improvements occurring sometime between December 2013 and early January 2014, there was no substantial and persuasive evidence as to exactly what improvements were in place, if any, on January 1, 2014. The Hearing Officer cannot participate in speculation. The 2013 assessed value remains the assessed value for 2014. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent offered into evidence Exhibits 1 through 4. Exhibit 1 consisted of an appraisal report pertaining to the appropriate valuation of the subject property for tax year 2013. Exhibit 2 consisted of an appraisal report pertaining to the appropriate valuation of the subject property for tax year 2014. Exhibit 3 consisted of an MLS listing of the subject property on 6/7/13. Exhibit 4 consisted of an MLS listing of the subject property on 1/24/14. Exhibits 1, 3 & 4 were not objected to. Exhibit 2 was objected to as in violation of state statue. The objection was overruled. Exhibits 1 through 4 were received into the evidentiary record.
- Presumption of Correct Assessment Rebutted – Value Established. The evidence presented by Respondent was substantial and persuasive to both rebut the presumption of correct assessment by the Board and to establish the fair market value of the subject property to be $71,000, assessed residential value of $13,490. See, Respondent Proves Value, infra.
CONCLUSIONS OF LAW AND DECISION
The Commission has jurisdiction to hear this appeal and correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the board of equalization, and correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Article X, Section 14, Mo. Const. of 1945; Sections 138.430, 138.431, 138.431.4, RSMo.
Basis of Assessment
The Constitution mandates that real property and tangible personal property be assessed at its value or such percentage of its value as may be fixed by law for each class and for each subclass. Article X, Sections 4(a) and 4(b), Mo. Const. of 1945. The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property are assessed at set percentages of true value in money. 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.
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization. Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978); Chicago, Burlington & Quincy Railroad Co. v. STC, 436 S.W.2d 650, 656 (Mo. 1968); May Department Stores Co. v. STC, 308 S.W.2d 748, 759 (Mo. 1958). 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.
Complainants’ Burden of Proof
In order to prevail, Complainants 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. Hermel, supra. 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.” 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). 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.
Standard for Valuation
Section 137.115, RSMo, requires that property be assessed based upon its true value in money which is defined as the price a property would bring when offered for sale by one willing or desirous to sell and bought by one who is willing or desirous to purchase but who is not compelled to do so. St. Joe Minerals Corp. v. State Tax Commission, 854 S.W.2d 526, 529 (Mo. App. E.D. 1993); Missouri Baptist Children’s Home v. State Tax Commission, 867 S.W.2d 510, 512 (Mo. banc 1993). True value in money is defined in terms of value in exchange and not value in use. 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).
It is the fair market value of the subject property on the valuation date. Hermel, supra.
Market value is the most probable price in terms of money which a property should bring in a 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:
- 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.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably they may be deemed entitled. The relative weight to be accorded any relevant factor in a particular case is for the Hearing Officer to decide. St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977); St. Louis County v. STC, 515 S.W.2d 446, 450 (Mo. 1974); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968). The Hearing Officer as the trier of fact may consider the testimony of an expert witness and give it as much weight and credit as he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part. St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). Missouri courts have approved the comparable sales or market approach, the cost approach and the income approach as recognized methods of arriving at fair market value. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993); Aspenhof Corp. v. STC, 789 S.W.2d 867, 869 (App. E.D. 1990); Quincy Soybean Company, Inc., v. Lowe, 773 S.W.2d 503, 504 (App. E.D. 1989), citing Del-Mar Redevelopment Corp v. Associated Garages, Inc., 726 S.W.2d 866, 869 (App. E.D. 1987); and State ex rel. State Highway Comm’n v. Southern Dev. Co., 509 S.W.2d 18, 27 (Mo. Div. 2 1974).
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. St. Joe Minerals Corp., supra
Sale of Subject
Evidence of the actual sale 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. The actual sales price, between a willing seller who is not obligated to sell and a willing buyer who is not compelled to buy, establishes an outer limit on the value of real property. St. Joe Minerals Corp. v. STC, 854 S.W.2d 526 (App. E.D. 1993).
The subject property was purchased by Complainant on 6/6/13 for $55,000. It was listed the next day for $89,900 which was later reduced to $79,900. No offers were made by any potential purchasers. Complainant puts great weight on the Decision and Order in Daniels v. Zimmerman (STC Appeal #12-10850, 3/12/14). However, the facts of such appeal are distinguishable from the facts in the present appeal. Les Gaffner, President of Complainant, knew little about the purchase of the subject property. He did not know whether the property had been listed. On the other hand, Respondent presented testimonial evidence that Respondent could find no evidence that the subject property has been listed on the open market preceding the purchase by Complainant on 6/6/13.
The Hearing Officer is not persuaded that the six (6) factors as set forth above were fulfilled. The Hearing Officer would also note that although a purchase of a property on 6/6/13, over five (5) months after the pertinent date of 1/1/13 (like Complainant’s), may provide evidence of an arms-length transaction, such does not definitively set the value of the subject property on 1/1/13. The Hearing Officer must still weigh all evidence to determine what valuation is supported by substantial and persuasive evidence.
Respondent Proves Value for 2013 But Not for 2014
Respondent presented substantial and persuasive evidence to establish a fair market value as of January 1, 2013, to be $71,000 for the subject property. Respondent’s appraiser developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison or market approach. The sales comparison approach is generally recognized to be the most reliable methodology to be utilized in the valuation of single-family residences.
The adjustments made by the appraiser were consistent with generally accepted guidelines for the appraisal of property of the subject’s type and were market based. The adjustments properly accounted for the various differences between the subject and each comparable. The valuation within such appraisal was actually $13,900 below the valuation set by the St. Louis County Board of Equalization and $23,700 below the valuations set by the Assessor.
As to the valuation of the subject property for tax year 2014, no substantial and persuasive evidence was offered that improvements were made to the subject property between 1/1/13 and 1/1/14. The Hearing Officer and the Commission cannot be left “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 assessed valuation for the subject property as determined by the Assessor and reduced by the Board of Equalization for St. Louis 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 $13,490.
Application for Review
A party may file with the Commission an application for review of this decision within thirty days of the mailing date set forth in the Certificate of Service for this Decision. The application shall contain specific facts or law as grounds upon which it is claimed the decision is erroneous. Said application must be in writing addressed to the State Tax Commission of Missouri, P.O. Box 146, Jefferson City, MO 65102-0146, and a copy of said application must be sent to each person at the address listed below in the certificate of service.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432, RSMo
The Collector of St. Louis County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending the possible filing of an Application for Review, unless said taxes have been disbursed pursuant to a court order under the provisions of Section 139.031.8, RSMo.
Any Finding of Fact which is a Conclusion of Law or Decision shall be so deemed. Any Decision which is a Finding of Fact or Conclusion of Law shall be so deemed.
SO ORDERED this 5th day of January, 2016.
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Delivery or Notice was made via mail, email, fax, or personally on January 5th, 2016 to the following Individuals of this Order
Patrick Keefe, Attorney for Complainant, firstname.lastname@example.org
Steven Robson, Attorney for Respondent, email@example.com
Jake Zimmerman, Assessor, firstname.lastname@example.org
Mark Devore, Collector, MDevore@stlouisco.com