STATE TAX COMMISSION OF MISSOURI
|DANELLA SMITH,||)||Appeal No. 21-30130|
|Complainant(s),||)||Parcel/locator No(s): 32-740-26-10-00-0-00-000|
|GAIL MCCANN-BEATTY, ASSESSOR,||)|
|JACKSON COUNTY, MISSOURI,||)|
DECISION AND ORDER
Danella Smith (Complainant) appeals the Jackson County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2021, was $120,000, with an assessed value of $22,800. Complainant claims the property is overvalued and proposes a value of $114,000. Complainant claims the property is subject to discrimination. Complainant did not produce substantial and persuasive evidence establishing overvaluation or discrimination. The BOE’s decision is affirmed. Complainant, pro se, and Respondent, represented by counsel, Jennifer Ware, were present for the evidentiary hearing held via WebEx on February 2, 2022.
FINDINGS OF FACT
- Subject Property. The subject property is located at 11504 E 58th Terr, Jackson County, Missouri. The parcel/locator number is 32-740-26-10-00-0-00-000.
The subject property consists of a 1,684 square foot, ranch style single family home. The subject property features three bedrooms, two and a half bathrooms, an in ground pool, two car garage and a basement. Complainant purchased the subject property in 2003 for $140,000.
- Respondent and BOE. Respondent classified the subject property as residential and determined the TVM on January 1, 2021, was $120,000, with an assessed value of $22,800. The BOE classified the subject property as residential and independently determined the TVM on January 1, 2021, was $120,000, with an assessed value of $22,800.
- Complainant’s Evidence. Complainant testified the TVM of the subject property on January 1, 2021, was $114,000. Complainant submitted Exhibit A, Uniform Residential Appraisal Report, which is admitted into evidence. Complainant testified that her home has various condition issues including bad guttering, cracks in walls of basement and garage and cracks in the driveway. There are multiple pages of photographs of the condition of the property within the appraisal. (Exhibit A at 10 through 15) The photographs were taken of the property when the on-site appraisal was conducted by Nathaniel Petty, a Certified Residential Real Estate Appraiser, on July 9, 2019. (Exhibit A at 1, 3, and 21) Complainant testified that no improvements had been completed on the property between January 1, 2019, and January 1, 2021. Exhibit A lists the property as being in fair-average condition.
Exhibit A utilizes the comparable sales approach to estimate the market value of the subject property from sales of four comparable properties. The comparable properties were all sold or under contract in April or June of 2019. The comparable properties are located within one quarter of a mile of the subject property. The comparable properties are similar to the subject property with respect to location, age, quality and style. The comparable properties differ from the subject property with respect to features. Exhibit A states “the values indicated by the Sales Comparison Approaches indicate a value range of $113,700 to $118,250 for the subject. […] [T]he greatest weight & reliability lies in the Sales Approach thus, a final value estimate of $114,000 is supportable.” (Exhibit A at 4)
The key property data in Exhibit A are as follows:
|Subject Property||11419 E 58th Ter||5903 Claremont||11418 E 58th Ter||11301 E 58th Ter|
There was no evidence presented that Complainant is a licensed appraiser or a person possessing appraisal training. Complainant testified that the Jackson County Assessor’s office valued her property higher than other residences in her neighborhood.
- Respondent’s Evidence. Respondent submitted the testimony of David Davis, and Exhibit 1, Summary Report, which is admitted into evidence. Mr. Davis testified he has five to six years of experience as a Residential Real Estate Appraiser for Jackson County. Mr. Davis testified he utilized the sales comparison approach to estimate the January 1, 2021, market value of the subject property. (Exhibit 1) Mr. Davis’ testimony concluded the market value was $120,000 and utilizes the Exhibit 1, Support Report, to support this conclusion.
Exhibit 1 states the “subject is a ranch style home in fair to average condition. The complainant’s appraisal cited interior maintenance issues, particularly in the basement.” (Exhibit 1 at 4) Mr. Davis testified that Exhibit 1 utilizes the sales comparison approach to estimate the market value of the subject property from recent sales of three comparable properties. The comparable properties are located within one mile of the subject property. Mr. Davis testified that the third comparable property was most similar to the subject property with respect to condition, type, and size. Mr. Davis testified that he conducted an outdoor on-site inspection on November 23, 2021, and spoke with the homeowner on November 24, 2021, confirming the details and condition of the property.
- Value. The TVM of the subject property on January 1, 2021, was $120,000, with an assessed value of $22,800.
CONCLUSIONS OF LAW
- Assessment and Valuation
Pursuant to Article X, Sections 4(a) and 4(b), Mo. Const. of 1945 real property and tangible personal property is 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. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). 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 TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
To obtain a reduction in assessed value based upon discrimination, a complaining taxpayer must (1) prove the true value, also known as the fair market value (FMV), of the subject property as of the taxing date, and (2) show an intentional plan of discrimination by the assessor resulting in an assessment at a greater percentage of value than other property within the same class and the same taxing district, or, in the absence of such an intentional plan, show that the level of assessment is so grossly excessive as to be inconsistent with an honest exercise of judgment. Zimmerman v. Mid–America Financial Corp., 481 S.W.3d 564, 571 (Mo. App. E.D. 2015), quoting Savage v. State Tax Comm’n of Missouri, 722 S.W.2d 72, 78 (Mo. banc 1986). 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. State ex rel. Plantz v. State Tax Commission, 384 S.W.2d 565, 568 (Mo. 1964). 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. Savage at 79. No other methodology is sufficient to establish discrimination. Cupples-Hesse, supra.
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. For this reason, the comparable sales approach is typically used to value residential property. “The comparable sales approach uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties.” Id. at 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012). “It is within the purview of the hearing officer to determine the method of valuation to be adopted in a given case.” Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 9 (Mo. App. S.D. 2020). The hearing officer “may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification or assessment of the property.” Section 138.430.2. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties, or based solely upon evidence presented by the parties. Id.
- Complainant’s Burden of Proof
The BOE’s valuation is presumptively correct. Rinehart v. Laclede Gas Co., 607 S.W.3d 220, 227 (Mo. App. W.D. 2020). To prove overvaluation, a taxpayer must rebut the BOE’s presumptively correct valuation and prove the “value that should have been placed on the property.” Snider, 156 S.W.3d at 346. The taxpayer’s evidence must be both “substantial and persuasive.” Id. “Substantial evidence is that 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.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”). A taxpayer does not meet his burden if evidence on any essential element of his case leaves the STC “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).
- Complainant Did Not Prove Overvaluation.
Complainant’s testified the subject property’s value is $114,000. Complainant’s argument in support of this value is based on the appraisal conducted on the property in 2019 and the unchanged condition of the property since the appraisal was conducted.
Complainant presented an appraisal of the subject property conducted in July 2019 to determine a value of the subject property; however, the appraisal fails to adjust for market appreciation between July 2019 and January 1, 2021. Hence for the subject property’s 2021 valuation, the comparable sales approach taken within Exhibit A is no longer valid, as the appraisal was conducted in 2019, nearly two years prior to the valuation date of January 1, 2021, and was not supported by a foundation that included the testimony of the appraiser who wrote the report. See Snider, 156 S.W.3d at 348 (noting comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.) To rely on the appraisal report under the circumstances would be speculative and, therefore, is not substantial and persuasive on the issue of the subject property’s TVM as of January 1, 2021. Overall, the condition issues and the appraisal do not constitute persuasive evidence to adopt the taxpayer’s opinion of value.
Although not required given the burden of proof, Respondent presented Exhibit 1 and testimony that the data in Exhibit 1 supported the BOE’s valuation of the subject property. Respondent’s evidence persuasively supports the TVM of $120,000.
- Complainant Did Not Prove Discrimination.
Complainant did not prove discrimination for the subject property. Missouri courts have consistently held that (1) a taxpayer alleging discrimination must show the true value in money of his property as a necessary part of her discrimination claim; and (2) the proper method of determining discrimination is to compare the actual level of assessment of the subject property as determined by the assessor to the common level of assessment for the subject property’s subclass. Mid-America Financial Corp., 481 S.W.3d at 574, citing Savage, 722 S.W.2d at 72.
Regarding the first point, Complainant did not rebut the correctness of the BOE’s valuation. As discussed above, Complainant did not present substantial and persuasive evidence rebutting the presumption of correctness of the BOE’s value and establishing that her value was correct. Complainant did not present any recent comparable sales or a properly-authenticated appraisal report supported by the testimony of the appraiser who performed the appraisal to establish the TVM was lower than $120,000. Therefore, Complainant failed to establish a market value which would point to discrimination.
Regarding the second point, Complainant presented no evidence of additional properties for comparison with the subject property in order to establish an intentional plan of discrimination by Jackson County. There was no evidence presented that a statistically significant number of other residential properties within Jackson County are being assessed at a lower ratio of market value than the subject property. Complainant presented no evidence of properties which sold for prices in excess of their appraised value and testified that the subject property was appraised higher based on her observations, but presented no comparable sales in support of her testimony. Because the Complainant failed to establish the market value of the subject property and failed to establish that it is being assessed at a higher percentage of market value than a statistically significant number of other properties in Jackson County, the claim of discrimination fails.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $120,000, with an assessed value of $22,800.
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person 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.
The Collector of Jackson 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.
SO ORDERED February 25, 2022.
STATE TAX COMMISSION OF MISSOURI
Erica M. Gage
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on February 25, 2022, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
 The exhibit at issue consisted of statements made by individuals not present at the evidentiary hearing. Hearsay evidence is objectionable because the person who makes the statement offered is not under oath and is not subject to cross-examination.” Saint Louis Univ. v. Geary, 321 S.W.3d 282, 291 (Mo. banc 2009). Exhibit A is hearsay given that no foundation was laid for its admission, but Respondent made no objection to its admittance; therefore, the exhibit is admitted and given the weight deemed appropriate.