State Tax Commission of Missouri
DANNY & J. GAIL FAUSETT,)
)
Complainants,)
)
v.) Appeal Number 09-59500
)
JAMES KECK, ASSESSOR,)
HENRY COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Louis County Board of Equalization sustaining the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax years 2009 and 2010 is set at $116,920, residential assessed value of $22,210.Complainants appeared pro se.Respondent appeared in person and by Counsel, Richard Shields, Prosecuting Attorney.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.
SUMMARY
Complainants appeal, on the ground of overvaluation, the decision of the Henry County Board of Equalization, which sustained the valuation of the subject property.The Assessor determined an appraised value of $117,900, assessed value of $22,400, as residential property.Complainants proposed a value of $102,900, assessed value of $19,550.A hearing was conducted on October 28, 2009, at the Henry County Courthouse, Clinton, 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.Complainants timely appealed to the State Tax Commission from the decision of the Henry County Board of Equalization.
2.Subject Property.The subject property is located at 810 Iowa Circle, Clinton, Missouri.The property is identified by map parcel number 18-1-12-2-6-1.025.The subject lot was purchased in August 2007 and the subject house was completed in February 2008.The total purchase price for the lot and improvements was $142,500.[1]
3.No New Construction and Improvement.There was no evidence of new construction and improvement from January 1, 2009, to the date of hearing, and Complainants had no plans for any new construction and improvement prior to January 1, 2010.Therefore, in the absence of new construction and improvement made between date of hearing and December 31, 2009, the value set for 2009 will remain the value for 2010.[2]
4.Complainants’ Evidence.Mr. Fausett testified in his own behalf and offered into evidence Exhibit A – Valuation Information.Exhibit A consisted of the following documents.Objections on the grounds of hearsay and lack of foundation were sustained to pages 2, 7, 8, 9 and 10.
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PAGE # |
DESCRIPTION |
DISPOSITION |
|
1 |
Typed and Printed Statement of Taxpayers |
Received |
|
2 |
Chart of Properties in Subject Subdivision |
Excluded |
|
2A |
Property Record Card for 806 Iowa Circle |
Received |
|
3 |
2 Photographs of Drainage Ditch/Backyard Landscaping at Subject |
Received |
|
4 |
Photograph of front of Subject and next door home |
Received |
|
5 |
Photograph of front of next door home and Subject |
Received |
|
6 |
Photograph of front of next door home and part of Subject |
Received |
|
7 |
Information Sheet/Map – Old Country Club Village Home Styles |
Excluded |
|
8 |
MultiList Sales Information Sheet 812 Iowa Circle |
Excluded |
|
9 |
MultiList Sales Information Sheet 800 South Utah |
Excluded |
|
10 |
MultiList Sales Information Sheet 814 Iowa Circle |
Excluded |
Mr. Fausett stated his opinion of the fair market value of the property as of January 1, 2009, to be $102,900.The opinion of value was based upon the owners’ belief that three factors had reduced the value of Complainants’ home.The three factors asserted by Mr. Fausett to be negative influences on the property under appeal were: (1) the potential for water drainage in the back yard coming into the subject house due to the house being built lower than it should have been; (2) the subject has a rock and landscaped drainage system at the back of the house, instead of sod, like other homes; and (3) the house next door is a smaller house and has only a one car garage.
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, 2009, to be $102,900, as proposed.
5.Respondent’s Evidence.Respondent testified as to the valuation of the subject property under the Hunnicut mass appraisal cost methodology.A correction to the valuation was reported after review in preparation for the hearing that reduced the true value in money from $117,900 to $116,920.This resulted in a corrected residential assessed value of $22,210.
The following Exhibits were received into evidence on behalf of Respondent.
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EXHIBIT |
DESCRIPTION |
|
1 |
Sales Letter on Subject |
|
2 |
3 Photographs of property next door to Subject |
|
3 |
4 Photographs of Subject |
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4 |
4 Photographs of Subject |
|
5 |
Photograph of Subject Garage |
|
6 |
Enlarged Property Record Card for Subject |
|
7 |
Chart: Per Square Foot Sales/Appraised Values-Subject & 10 subdivision properties |
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.[3]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[4]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.[5]
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.[6]True value in money is defined in terms of value in exchange and not value in use.[7]It is the fair market value of the subject property on the valuation date.[8]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.[9]
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.[10]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.[11] Complainants failed to present a recognized methodology to establish value for real property in an appeal before the Commission.
Complainants’ Burden of Proof
In order to prevail, Complainants 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, 2009.[12]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.”[13]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[14]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.[15]
The owner of property is generally held competent to testify to its reasonable market value.[16]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[17]“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.”[18]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.”[19]
In the present case, the owners were of the opinion that three specific factors were negative influences on the value of their home.[20]However, no market data was presented from which the Hearing Officer can measure, analyze or evaluate the claims of the owners.Considering each of the factors individually and collectively the Hearing Officer is still left, in the words of the words of the Rossman decision “in the nebulous twilight of speculation, conjecture and surmise.”
The essential elements of Complainants’ case rests upon the extent to which the factors cited may have reduced the value of the subject property.Complainants’ claim that the value at purchase in February 2008 had been reduced in 11 months by $39,600 or approximately 28%[21] is not established by any market data.There is no basis in fact that the fair market value of the subject on January 1, 2009, was only $102,900, therefore, Mr. Fausett’s testimony advancing that opinion of value must be rejected.The owner’s opinion does not rest upon proper elements or a proper foundation and can be given no probative weight in the decision.
Complainants have failed to meet their burden of proof, the presumption of correct assessment was not rebutted by Complainants’ evidence.However, since the Board had sustained the value determined by the Assessor under the mass valuation system employed in Henry County, the correction testified to by Mr. Keck does rebut the presumption of correct assessment to the extent of reducing the value to $116,920.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Henry County for the subject tax day is SET ASIDE.
The assessed value for the subject property for tax years 2009 and 2010 is set at $22,210.
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 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, 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. [22]
The Collector of Henry 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 December 2, 2009.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 2ndday of December, 2009, to:Danny Fausett, 810 Iowa Circle, Clinton, MO 64735, Complainant; Richard Shields, Prosecuting Attorney, 100 West Franklin Street, Clinton, MO 64735, Attorney for Respondent; James Keck, Assessor, 100 W. Franklin, Room 3, Clinton, MO 64735; Gene Pogue, Clerk, 100 W. Franklin, Clinton, MO 64735; Mildred Johnson, Treasurer and ex officio Collector, 100 W. Franklin, Clinton, MO 64735.
___________________________
Barbara Heller
Legal Coordinator
[4] 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).
[5] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[6] 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).
[7] Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[9] 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.
[10] 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).
[11] 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).
[13] 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).
[16] 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).
[17] 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).