State Tax Commission of Missouri
|v.||)||Appeal No. 16-57008|
|TOM COPELAND, ASSESSOR,||)|
|FRANKLIN COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Assessor is SET ASIDE. Weighing all the evidence, Respondent presented substantial and persuasive evidence of the true market value of the subject property, as of January 1, 2015, of $54,000. The assessed value for the subject property for tax year 2016 is set at $17,280.
Complainant appeared pro se.
Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer John Treu.
Complainant appeals on the ground of overvaluation. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2015. 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 Franklin County Board of Equalization.
- Evidentiary Hearing. The Evidentiary Hearing was held on January 26, 2017 at the Franklin County Administration Building, Union, Missouri.
- Identification of Subject Property. The subject property is identified by map parcel number or locator number 22-7-36.0-2-024-305.200. It is further identified as 545 S. Main Street, St. Clair, Franklin County Missouri. (Exhibit A and Exhibit 1)
- Description of Subject Property. The subject property consists of a 2,316 square foot commercial lot improved by a one-story, metal and wood building. The subject property has 1,292 square feet of gross building area and was constructed in 2007. (Exhibit 1)
- Assessment. The Assessor valued the property at $72,560, commercial assessed value of $23,219. (Complaint for Review of Assessment)
- Complainant’s Evidence. Complainant offered into evidence the following:
|Exhibit A||Closing Statement Showing a Sales Price of $39,000 on August 5, 2016|
|Exhibit B||Plot of Subject & Adjoining Property with Values|
|Exhibit C||Office Building for Sale @ $44.83/square foot|
|Exhibit D||Office Building for Sale @ $29.97/square foot|
|Exhibit E||Office Building for Sale @ $45/square foot|
|Exhibit F||Moody’s Document|
|Exhibit G||Presentation of Eric Rosengren, CEO of Federal Reserve|
|Exhibit H||Pictures of Subject Property.|
Exhibits A through E, G and H were received into evidence without objection. Respondent objected to Exhibit F on the basis of relevance. The objection was overruled and Exhibit F was received into evidence to be given such weight, if any, which the Hearing Officer deemed appropriate.
- No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2015 to January 1, 2016 therefore the assessed value for 2015 remains the assessed value for 2016. Section 137.115.1, RSMo.
- Respondent’s Evidence. Respondent offered into evidence Exhibit 1. Exhibit 1 consisted of an appraisal report. Exhibit 1 was received into evidence without objection.
- Substantial and Persuasive Evidence to Support Appraiser’s Value. Substantial and persuasive evidence was presented to support the Appraiser’s value.
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 commercial real property is assessed at 32% of true value in money (Section 137.115.5, RSMo).
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, 2015. 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). 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.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. 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). The owner’s opinion is without probative value, however, where it is shown to have been based upon improper elements or an improper foundation. Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008).
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. 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) (internal citations omitted).
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. v. STC, 854 S.W.2d 526, 529 (App. E.D. 1993)
Evidence of True Value
Complainant presented no evidence based upon the sales approach, the cost approach or the income approach. Complainant proposed a value of $39,000 which is the price paid for the property on August 5, 2016, 20 months after the valuation date (Exhibit A). Exhibits B through H were of little relevance as they provided no evidence of the true market value of the subject property on January 1, 2015.
Respondent presented an appraisal report and testimony of the appraiser. 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 adjustments made by the appraiser were consistent with generally accepted guidelines for the appraisal of property of the subject’s type. The adjustments properly accounted for the various differences between the subject and each comparable. The appraiser utilized three comparable properties with a range of adjusted sales prices per square foot between $26.64/square foot and $49.10/square foot. This resulted in an adjusted mean sale price per square foot of $41.02/square foot. The appraiser opined a true market value for the subject property, as of January 1, 2015, of $54,000
After review of the evidence pertaining to the purchase of the subject property and the appraisal report, the Hearing Officer concluded the appraisal report, with an effective date of January 1, 2015, was the most substantial and persuasive.
The assessed valuation for the subject property is SET ASIDE. The assessed value for the subject property for tax year 2016 is set at $17,280.
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 Franklin 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 February 14, 2017.
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 14th day of February, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.