State Tax Commission of Missouri
CHARLES PAULI,)
)
Complainant,)
)
v.)Appeal No.11-20012
)
ED BUSHMEYER, ASSESSOR,)
CITY OF ST. LOUIS, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the City of St. Louis Board of Equalization sustained the assessment made by the Assessor is AFFIRMED.True value in money for 2011 is set at $291,400, assessed value of $55,370.Complainant appeared in person.Respondent appeared by Assistant City Counselor Rich Kismer.Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011, and whether there was an intentional plan of the assessing officials to assess the property at a value greater than 19% of fair market value or at a greater percentage than the average residential assessment in the city.
SUMMARY
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the City of St. Louis Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $291,400, assessed value of $55,370, as residential property. A hearing was conducted on June 6, 2012, at the City of St. Louis, City Hall, St. Louis, Missouri.
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 City of St. Louis Board of Equalization.
2.Complainant’s Evidence.Complainant testified on his own behalf and presented evidence.Complainant provided a binder of exhibits.The binder is marked as Exhibit A.The Respondent objected to all the documents within the binder on the grounds of hearsay, relevance, speculation, and lack of foundation.The objection was sustained and continued through the hearing.
The Exhibits were grouped as follows:
· Purported taxes on 14 properties in the north area of the City of St. Louis
· Purported taxes on 6 properties in the south area of the City of St. Louis
· Purported taxes on 6 properties in the north area of the City of St. Louis
· Article from the State of Nevada
· “Material and Facts that will be used in my lawsuit in the Circuit Court for the Gross Misuse of Tax Money” approximately 20 pages
· Crime information
· Shotgun House
· Additional articles
Complainant testified that he is not disputing the valuation of the property.Complainant testified that he appeared at the hearing for the sole purpose of pursing a Complaint for Review of Assessment as a vehicle to sue the City of St. Louis in Circuit Court for its practices as stewards of city resources.None of the evidence presented by the Complainant was related to the fair market value of the property on January 1, 2011, or established discrimination.
3.Respondent’s Evidence.Exhibit 1 was received into evidence.Exhibit 1 is an appraisal of the subject property by Appraiser Walter Carter.The appraiser presented a sales comparison approach using 3 sales occurring within .7 miles of the subject property, with sale dates of May to August 2010.The properties ranged in size from 1,712 to 2,031 square feet.The adjusted sales prices ranged from $306,900 to $366,200.The valuations were used to support the finding of $291,400.
4.Subject Property.The subject property is located at 5942 Crane Circle, St. Louis, Missouri.The property is identified by map parcel number 6391-00-01900.The property consists of a 16,811 square foot lot improved by a 2,108 square foot residence.
5.Complainant Failed To Prove Value.Complainant failed to present substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the true value in money as of January 1, 2011 and further failed to prove discrimination.
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.[1]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the Board of Equalization.[2] 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.[3]When as in this case, Complainant fails to present any relevant evidence to establish the fair market (true value in money) value of the property being appealed, the Board presumption stands.
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.[4]It is the fair market value of the subject property on the valuation date.[5]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.[6]
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.[7]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.[8]Complainant’s opinion of value was not derived from any recognized methodology for the appraisal of real estate.
Complainant’s Burden of Proof
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, 2011.[9]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.”[10]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[11]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.[12]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[13]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[14]In the present appeal, Complainant did not present evidence of the market value of the property.Complainant testified that he did not dispute the value of the property as established by the Assessor.
Complainant Failed To Prove 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, 2011; 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.[15]Evidence of various purported real estate tax bills does not prove discrimination.Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[16]The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[17]No other methodology is sufficient to establish discrimination.[18]
Complainant’s first burden was to prove the level of assessment for the subject property in 2011. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.As addressed above, the taxpayer failed to prove the market value of the property under appeal.
Complainant then was required to prove the average level of assessment for residential property in the City of St. Louis for 2011.This is done by (a) independently determining the market value of a representative sample of residential properties in the city; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results.
The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in the City of St. Louis must demonstrate a disparity that is grossly excessive.[19]
Complainant’s discrimination claim fails because he failed to establish the market value of his property.Without establishing the market value, the assessment ratio for the subject property cannot be calculated.Without establishing the ratio, it cannot be established that the property under appeal was being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established the market value, the discrimination claim would still fail because he failed to demonstrate that a statistically significant number of other residential properties within the City of St. Louis are being assessed at a lower ratio of market value than the subject property
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for City of St. Louis for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2011 is set at $55,370.
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.The application shall contain specific 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, MO65102-0146, 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 appeal is based will result in summary denial. [20]
The Collector of the City of St. Louis, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a 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 June 13, 2012.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 13thday of June, 2012, to:Charles Pauli, 5942 Crane Circle, St. Louis, MO 63109, Complainant; Rich Kismer, Associate City Counselor, 314 City Hall, St. Louis, MO 63103, Attorney for Respondent; Ed Bushmeyer, Assessor, 120 City Hall, St. Louis, MO 63103; Gregory Daly, Collector, 110 City Hall, St. Louis, MO 63103.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[2] 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).
[3] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[4] 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).
[6] 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.
[7] 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).
[8] 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).
[10] 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).
[13] 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).
[14] 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).