STATE TAX COMMISSION OF MISSOURI
CHARLES JOHNSON, )
)
Complainant, ) Appeal No. 19-84001
) Parcel Locator No. 07-10-01-00-000-0004.05
DAN WARD, ASSESSOR, ST. )
FRANCOIS COUNTY, MISSOURI )
Respondent. )
DECISION AND ORDER
Charles Johnson (Complainant) appeals the St. Francois County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019 was $335,460, with an assessed value of $63,740. Complainant claims the property was overvalued and the assessment was discriminatory.
The hearing officer conducted an evidentiary hearing.[1] Complainant did not present substantial and persuasive evidence establishing overvaluation or discrimination. The BOE’s decision is AFFIRMED.
FINDINGS OF FACT
- The Subject Property The subject property is 702 Marble Creek Court, Bonne Terre, Missouri. The parcel/locator number is 07-10-01-00-000-0004.05. The subject property is in the Big River Estates subdivision. It consists of a 4.68 acre lot with a single story, single family brick home. The home was built in 2018 and has approximately 2,498 square feet, with three bedrooms, two full baths, a 972 square foot garage, and a partially finished full basement.
- BOE Decision Respondent determined the TVM of the subject property was $337,340. Respondent assessed the subject property at the 19% statutory residential rate, yielding an assessed value of $64,100. The BOE revised the TVM of the subject property from $337,340 to $335,460, with assessed value of $63,740.
- Complainant’s Appeal Complainant timely appealed the BOE decision to the State Tax Commission (Commission). Complainant alleged the subject property was overvalued and subjected to a discriminatory assessment.
- Overvaluation Claim Complainant asserts the TVM of subject property is $241,470, not $335,460 as determined by the BOE. Complainant asserts the assessed value should be $45,879. Complainant submitted Exhibits A-E. Exhibit A is a 2018 tax bill for a neighboring property located at 704 Marble Creek Court. Exhibit A shows that for purposes of the 2018 tax bill, the appraised value of 704 Marble Creek Court was $221,470, and the assessed value was $42,080. Complainant built the home on 704 Marble Creek Court and credibly testified he sold it in October 2014 for “over” $300,000. Exhibit B is Complainant’s complaint for review of assessment filed with the Commission. Exhibit C is the BOE decision valuing the subject property at $335,460, with an assessed value of $63,740. Exhibit D is an itemized list of capital outlays by the subdivision association for maintaining common areas. Exhibit E is a receipt Complainant testified reflected out of pocket costs for street repairs. Exhibits D and E were excluded as irrelevant to the TVM of the subject property. Respondent submitted Exhibits 1-3. Exhibit 1 is a property record card showing the size, specifications, value, and photographs of the subject property. Exhibit 1 shows the subject property consists of a 2,498 square foot single story, brick residence with three bedrooms, two full baths, a full basement, and an approximately 972 square foot garage. Exhibit 1 lists a tax value of $335,460. Exhibit 2 consists of a summary report showing the size, specifications, value, photograph, and a sales letter regarding 704 Marble Creek Court. This the same property that is the subject of Complainant’s Exhibit A. The property at 704 Marble Creek Court consist of a 2,219 square foot single story, frame home located on an approximately 6.08 acre lot. The home was built in 2012 and has three bedrooms, two full bathrooms, a finished basement, and a 659 square foot garage. The sales letter shows 704 Marble Creek Court sold for $354,000 on June 29, 2018. The $354,000 purchase price included $12,000 in personal property, leaving $342,000 as the sale value of the real property. The lot at 704 Marble Creek Court is larger than the subject property, but the home is smaller and approximately six years older than the home on the subject property. The June 2018 sale value of the real property ($342,000) at 704 Marble Court exceeds the BOE’s determination of the TVM of the subject property is $335,460 Exhibit 3 consists of a summary report showing the size, specifications, value, a photograph, of 701 Marble Creek Court, also located in the Big River Estates subdivision. Exhibit 3 includes a document showing 701 Marble Creek Court sold for $410,000 in July 2019. The home at 704 Marble Creek Court is a 3,112 square foot single story, frame home located on an approximately 5.29 acre lot. The home was built in 2015 and has four bedrooms, three full bathrooms, a full basement, and a 596 square foot garage. The home and lot at 701 Marble Creek Court are larger than the subject property. The July 2019 sale value ($410,000) of 701 Marble Creek Court exceeds the BOE’s valuation of the subject property. The TVM of the subject property is $335,460, with an assessed value of $63,740.
- Discrimination Claim There is no evidence of an intentional plan by Respondent to assess the subject property at a greater percentage of value than other residential properties in St. Francois County. There is no evidence of the overall assessment ratio of residential property in St. Francois County.
CONCLUSIONS OF LAW
- Authority
The Commission has authority, “under such rules as may be prescribed by law, to hear appeals from local boards in individual cases and, upon such appeal, to correct any assessment which is shown to be unlawful, unfair, arbitrary or capricious.” Mo. Const. art. X, § 14. Section 138.430.1 authorizes the STC to hear appeals concerning assessment, valuation, the method or formula used in determining valuation, or assignment of a discriminatory assessment.[2] “The commission shall investigate all such appeals and shall correct any assessment or valuation which is shown to be unlawful, unfair, improper, arbitrary or capricious.” Id. “To hear and decide appeals pursuant to section 138.430, the commission shall appoint one or more hearing officers.” Section 138.431.1. 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.” Section 138.431.5.
- True Value in Money
All real property and tangible personal property must be assessed at its value or a percentage of its value as fixed by law for each class and for each subclass. Mo. Const. art. X, sec. 4(a), 4(b). Section 137.115.1 provides residential property is assessed at 19% of its true value in money. The true value in money “is an estimate of the fair market value on the valuation date.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 897 (Mo. banc 1978). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the true value in money is a factual issue. Parker v. Doe Run Co., 553 S.W.3d 356, 360 (Mo. App. 2018).
- Evidentiary Standards
The hearing officer is the trier of fact and determines both the credibility and weight of the evidence. Citizens for Rural Pres., Inc. v. Robinett, 648 S.W.2d 117, 132 (Mo. App. 1982); see also Exch. Bank of Mo. v. Gerlt, 367 S.W.3d 132, 136 (Mo. App. 2012) (the trier of fact determines credibility and is free to disbelieve all or part of a party’s 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 to.” St. Louis Cty. v. State Tax Comm’n, 515 S.W.2d 446, 450 (Mo. 1974); see also Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. 2015) (the relative weight accorded to any relevant factor is for the administrative hearing officer to decide). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
- Complainant’s Burden of Proof
A taxpayer challenging the BOE’s assessment, valuation, method or formula for determining valuation, or the assignment of a discriminatory assessment bears the burden of proving the assessment or valuation was “unlawful, unfair, improper, arbitrary or capricious.” Section 138.430.1; Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. 2003).
The BOE’s valuation is presumed correct, but the taxpayer may rebut this presumption by producing “substantial controverting evidence.” Hermel, Inc. v. State Tax Comm’n, 564 S.W.2d 888, 895 (Mo. banc 1978) (quoting Cupples Hesse Corp. v. State Tax Comm’n, 329 S.W.2d 696, 702 (Mo. 1959)).[3] Substantial evidence is evidence which, if true, “has probative force upon the issues . . . and from which the trier of fact can reasonably decide the case on the fact issues.” Cupples Hesse, 329 S.W.2d at 702 (internal quotation omitted).
If the taxpayer rebuts the BOE presumption by producing substantial evidence, “the burden of proof on the facts and inferences would still rest on petitioner, for it is the moving party seeking affirmative relief.” Cupples Hesse, 329 S.W.2d at 702. To prevail, the taxpayer must produce “persuasive” evidence sufficient to convince the trier the disputed fact has been established. White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010); see also Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002) (evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact”).
- Overvaluation
To obtain a reduction in assessed valuation based on overvaluation, Complainant must produce substantial evidence to overcome the BOE presumption and then prove the true value in money of the subject property on the tax day. Hermel, 564 S.W.2d at 897. Complainant’s evidence does not meet this standard.
Complainant relied principally on Exhibit A to support his claim the TVM of the subject property is $241,470, not $335,460 as set by the BOE. Exhibit A is a 2018 tax bill showing the appraised value of 704 Marble Creek Court was $221,470. Assuming for the sake of argument Complainant’s evidence rebutted the BOE presumption, Complainant’s evidence is not persuasive for at least three reasons.
First, the pertinent inquiry is the fair market value of the subject property – 702 Marble Creek Court – on January 1, 2019. Complainant’s Exhibit A shows St. Francois County formerly valued the neighboring property – 704 Marble Creek Court – at $221,470.
Second, Complainant testified he built the home on 704 Marble Creek Court and sold it in October 2014 for “over” $300,000. Complainant, therefore, effectively concedes the fair market value of the neighboring 704 Marble Creek Court is significantly greater than $221,470. Further, Respondent’s Exhibit 2 shows the real property at 704 Marble Court sold in June 2018 for $342,000, even though both the home and garage are smaller and older than the home and garage on the subject property. Considered in conjunction with Complainant’s testimony, the fact the smaller, older home and garage on 704 Marble Creek Court recently sold for more than the BOE’s valuation of the subject property effectively negates Complainant’s assertion Exhibit A approximates the fair market value of the subject property.
Finally, Complainant testified that unlike the home at 704 Marble Creek Court, the home on the subject property does not have a finished basement and that some interior, cosmetic finishes are incomplete. Complainant also correctly noted the residence on the subject property is approximately 600 square feet smaller than the residence at 701 Marble Creek Court, which recently sold for $410,000. Complainant, however, provided no market analysis or other persuasive explanation showing the lack of finished basement and completed interior finishes justifies valuing the subject property at approximately $100,000 less than 704 Marble Creek Court and $170,000 less than 701 Marble Creek Court. Complainant did not produce persuasive evidence showing the BOE overvalued the subject property.
- Discriminatory Assessment
The United States and Missouri constitutions prohibit discriminatory taxation of similarly situated taxpayers. See U.S. Const. amend. XIV; Mo Const. art. X, § 3. “A taxpayer has the right to have his ‘assessment reduced to the percentage of that value at which others are taxed. . . .'” Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986) (internal quotation omitted). Absent proof of intentional discrimination, the analysis of discrimination claims compares the level of assessment for similarly situated properties to the actual level of assessment on the subject property. Id. at 78.
There was no evidence of an intentional plan of discrimination or of the average or median assessment level of similarly situated residential properties in St. Francois County. Complainant’s discrimination claim fails.
CONCLUSION AND ORDER
The BOE decision is affirmed. The fair market value of the subject property as of January 1, 2019 is $335,460. The assessed value is $63,740.
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, or emailed to legal@stc.mo.gov, and a copy of the application must be sent to each person listed below in the certificate of service.
Failure to state the specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.
Disputed Taxes
The Collector of St. Francois 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 October 16, 2019.
STATE TAX COMMISSION OF MISSOURI
Eric S. Peterson
Senior Hearing Officer
[1] Complainant and the St. Francois County Assessor (Respondent) appeared pro se.
[2] All statutory citations are to RSMo 2000, as amended.
[3] In 1992, the General Assembly eliminated the statutory presumption in favor of the assessor’s valuation. Section 138.060.1 provides “[t]here shall be no presumption that the assessor’s valuation is correct.” The plain language of the statute negates the former presumption the assessor’s valuation is correct, but leaves intact the longstanding presumption the BOE’s valuation is correct. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 n.2 (Mo. App. 2008); see also Parker, 553 S.W.3d at 360.