State Tax Commission of Missouri

CHRISTINA SWYERS,	)
	)
Complainant,	)
	)
v.	)	Appeal Number 13-34026
	)
TERRY ROESCH, ASSESSOR,	)
JEFFERSON COUNTY, MISSOURI,	)
	)
Respondent.	)

DECISION AND ORDER

HOLDING

 Decision of the County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Complainant failed to present substantial and persuasive evidence to establish true value of the subject property.

True value in money for the subject property for tax years 2013 and 2014 is set at $194,200, residential assessed value of $36,900.

Complainant appeared in person

Respondent appeared by counsel David Senkel

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

Complainant appeals, on the ground of overvaluation, the decision of the Jefferson 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, 2013.1 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 Jefferson County Board of Equalization.

2.Evidentiary Hearing.The Evidentiary Hearing was held on May 15, 2014 at the Jefferson County Administration Building, Hillsboro, Missouri.

3.Identification of Subject Property.The subject property is identified by map parcel number 02-1.0-02.0-3-001-222.It is further identified as 139 Keystone, Fenton, Missouri. 2

4.Description of Subject Property.The subject property consists of a 14,810 square foot lot improved by single family,one and one half story home of average quality, with 2,050 square feet of living area. Amenities include two bedrooms, two and one half bathrooms, basement, with a bonus area upstairs.

5.Sale of Subject.The subject property was purchased by Complainant in 2012 for $140,000.See, Methods of Valuation, infra.

6.Assessment.The Assessor appraised the property at $194,600, an assessed residential value of $36,900.
The Board of Equalization sustained the assessment.

7. Evidence.Complainant offered into evidence the following exhibits:

Exhibits	Description
A	Information from the County’s website
B	Complainant’s Sales Comparable
C	Information on 1013 Big Sky
D	Information on 406 Silver Maple
E	Information on 442 Winter Bluff
F	Information on 541 Winter Bluff
G	Floor Plan of Subject
H	Contract for Sale of Subject

Respondent objected to the admission of Exhibit B on the basis of hearsay and failure to establish
foundation.Objections were sustained.

Respondent offered into evidence Exhibit 1, the appraisal report of State Certified Residential Appraiser Todd Melkus.  Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessment above that value.

8.No Evidence of New Construction & Improvement.The Complainant testified that she made some improvements since she purchased the property.She added a fence in 2012 and a deck in August 2013.There was no evidence to establish that the new construction and improvement from January 1, 2013, to January 1, 2014 added any additional market value, therefore the assessed value for 2013 remains the assessed value for 2014.3

9.Presumption of Correct Assessment Not Rebutted.Complainant’s evidence was not 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 $140,000, as proposed.

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.5

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.5 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. 6 

Presumption In Appeal

There is a presumption of validity, good faith and correctness of  assessment by the County Board of Equalization.7 This presumption is a rebuttable rather than a conclusive presumption.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.8

Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.9 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.10

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.11 True value in money is defined in terms of
value in exchange and not value in use. 12 It is the fair market value of the subject property on the valuation date. 13 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.14

 

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.15

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.16

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. 17 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.18  Mr. Melkus appraisal report complied with the standards set forth by the Supreme Court.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. 19 However, one sale is not conclusive of market value.

Opinion Testimony by Experts

If specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert on that subject, by knowledge, skill, experience, training, or education, may testify thereto. The facts or data upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing and must be of a type reasonably relied upon by experts in the field in forming opinions or inferences upon the subject and must be otherwise reliable, the facts or data need not be admissible in evidence. 20 Mr. Melkus testimony and appraisal report was admitted as an opinion of an expert in the field.

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, 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.

Owner’s Opinion of Value

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 “Where the basis for a test as to the reliability of the testimony is not supported by a statement of facts on which it is based, or the basis of fact does not appear to be sufficient, the testimony should be rejected.”25

A taxpayer does not meet his burden if evidence on any essential element of his case leaves the Commission “in the nebulous twilight of speculation, conjecture and surmise.”26

The Complainant testified that her property’s true value was $160,000.She based it upon the price
she paid for the property.The Assessor’s expert report provided both the sales comparison approach and the
cost approach.Both methods established a value supporting the valuation of the Board. The comparable properties were similar in location (within .37 miles), square footage (within 700 square feet) and amenities.The expert did make adjustments to the comparables for the differences.The major difference between the subject and the comparable properties was the bedroom count – the subject having two bedrooms and the comparables having
three.The appraiser noted the difference and made an adjustment.The appraiser testified that the amount of the adjustment was based upon the ability to convert the bonus room into an additional bedroom.

In order to obtain a reduction in assessed value based upon discrimination, the Complainants 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.27 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. 28 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  29.  No other methodology is sufficient to establish discrimination.30

Complainant Fails To Prove Discrimination

The Complainant did not appeal on the basis of discrimination but made the allegation at the time of the hearing. Although not a basis of the Complaint, the Hearing Officer will address the issue.

Where there is a claim of discrimination based upon a lack of valuation consistency, Complainant has the burden to prove the level of assessment for the subject property in 2013, 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.

Complainant must then prove the average level of assessment for residential property in Jefferson County for 2013.This is done by (a) independently determining the market value of a representative and statistically significant sample of residential properties in Jefferson County; (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 the sample of Jefferson County must demonstrate a disparity that is grossly excessive. 31

Even if Complainant had established her market value, her discrimination claim would still fail because she did not demonstrate that a statistically significant number of other residential properties within Jefferson County are
being assessed at a lower ratio of market value than her property.Complainant’s claim of discrimination is
based upon six properties which sold for prices in excess of their appraised value.

Because Complainant failed to establish the market value of her property and has failed to establish that she is being assessed at a higher percentage of market value than a statistically significant number of other properties in Jefferson County, she could not have established a claim of discrimination.

ORDER

The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Jefferson County for the subject tax day is SUSTAINED.

The assessed value for the subject property for tax years 2013 and 2014 is set at $36,900.

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. 32

Disputed Taxes

The Collector of Jefferson 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 21^st day of May, 2014 .

STATE TAX COMMISSION OF MISSOURI

 Maureen Monaghan

Hearing Officer

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