STATE TAX COMMISSION OF MISSOURI
|DAVID ANDERSON & BARBARA ANDERSON,||)|
|v.||)||Appeal No. 17-10085|
|JAKE ZIMMERMAN, ASSESSOR||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessment made by the Board of Equalization of St. Louis County (BOE) is AFFIRMED. Complainants David Anderson and Barbara Anderson did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainant David Anderson (Complainant) appeared pro se; Barbara Anderson (Mrs. Anderson) appeared not.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by Counsel Steven Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent initially set the true value in money (TVM) of the subject property, as residential property, at $358,900. The BOE set the TVM of the subject property, as residential property, at $348,900, thereby lowering Respondent’s valuation. 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 or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes this appeal to determine the true value in money for the subject property as the property existed on January 1, 2017, under the economic conditions, as they existed on January 1, 2017.
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 STC.
- Evidentiary Hearing. An Evidentiary Hearing was held on March 28, 2018, at the St. Louis County Government Administration Building, 41 S. Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 23O610121. It is further identified as 521 Taylor Young Drive, Kirkwood, St. Louis County, Missouri. (Complaint; Exhibit 1)
- Description of Subject Property. The subject property consists of a .8418 acre residential lot improved by a 1,977 square-foot, ranch-style, single-family home built in 2008. (Exhibit A) The home includes two bedrooms; three full bathrooms; a full-unfinished basement; 850 square feet of “recreation room” area; a two-car attached garage; a porch; and a deck. (Exhibit A) The exterior of the home consists of frame construction. The subject property has a construction grade factor of C+ and a condition, desirability, and utility rating of Good. (Exhibit A)
- Assessment. Respondent initially valued the subject property at $358,900, as residential, as of January 1, 2017.
- Board of Equalization. The BOE valued the subject property at $348,900, as residential, as of January 1, 2017, thereby lowering Respondent’s valuation.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM was $300,000. To his opinion of value, Complainant offered the following evidence:
|Exhibit A||Five comparable properties used by Respondent to value subject property obtained from St. Louis County Real Estate Database||Admitted|
|Exhibit B||2017 Assessment Information for subject property after the BOE’s decision showing a land value of $139,400 and an improvements value of $209,500||Admitted|
|Exhibit C||2017 Change of Assessment Notice for subject property dated May 8, 2017||Admitted|
|Exhibit D||BOE Findings and Notice of Decision||Admitted|
|Exhibit E||Ownership, Legal, and Assessments information for subject property obtained from St. Louis County Real Estate Database||Admitted|
|Exhibit F||Newspaper advertisement of Remax Results realtor showing addresses and list prices of two-bedroom properties in the Kirkwood School District for March 2017, October 13-19, 2017, and December 8-14, 2017||Admitted|
|Exhibit G||Five comparable properties used by Respondent to value a property in the same subdivision as the subject property obtained from St. Louis County Real Estate Database||Admitted|
|Exhibit H||List of home sales within 5,000 feet of subject property between January 1, 2014, and March 20, 2017, obtained from St. Louis County Real Estate Database||Admitted|
|Exhibit I||Complainant’s comparable property 109 N. Ballas Road, Unit A; 2017 appraised value $318,600||Admitted|
|Exhibit J||Complainant’s comparable property 535 Central Place; 2017 market value estimate $190,800||Admitted|
|Exhibit K||Complainant’s comparable property 920 Glenmoor Avenue; 2017 market value estimate $232,200||Admitted|
|Exhibit L||Complainant’s comparable property 1007 Grandview Drive; 2017 market value estimate $176,800||Admitted|
|Exhibit M||Complainant’s comparable property 1007 Northview Court; 2017 market value estimate $230,100||Admitted|
|Exhibit N||Complainant’s comparable property 429 W. Adams; 2017 market value estimate $150,700||Admitted|
|Exhibit O||Ownership/Legal Information for subject property in tax year 2013 showing appraised value of $384,800||Admitted|
Respondent did not object to Complainant’s exhibits, all of which were received into the record.
Complainant argued that Respondent had made a mistake in choosing comparable properties and that Complainant had found more reliable comparables. Complainant argued that Respondent had made a mistake in comparing the subject property to dissimilar properties, which required correction. Complainant argued that the subject property is compliant with the requirements of the Americans with Disabilities Act (ADA compliant) in that it has a hall that is 40 inches wide and doors that are 36 inches wide. Complainant testified that he and Mrs. Anderson moved into the home in 2009 specifically because the home had been built to be ADA compliant. Complainant further testified that the lot of the subject property was very steep and needs to be terraced. Complainant testified that market interest in the subject property “drops considerably” due to the uniqueness of the home and the land.
On cross-examination, Complainant testified that he and Mrs. Anderson had the home built. When asked about the costs for building the house, Complainant objected on the ground that the costs were not relevant and were immaterial to the issue of TVM as of January 1, 2017. The Hearing Officer sustained the objection. Complainant testified that he is not a certified appraiser and has no specific training to make adjustments to the sale prices of comparable properties. Complainant testified that he took into consideration the square footage and the use of the comparable home in Exhibit I. Complainant testified that the comparable home in Exhibit I had a crawl space and no finished basement and had been built in 1984.
In rebuttal, Complainant testified that he had done his due diligence in looking at the market and websites and in making comparisons as well as any assessor.
- Respondent’s Evidence. Respondent advocated that the BOE’s valuation of the subject property as of January 1, 2017, $348,900, was correct. Respondent offered the following evidence:
|Exhibit 1||BOE Findings and Notice of Decision valuing the subject property at $348,900.||Admitted|
Complainant did not object to Respondent’s exhibit, which was received into the record.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessment by the BOE.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear this appeal and to correct any assessment that is shown to be unlawful, unfair, arbitrary or capricious, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, 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, real property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying, or reversing the determination of the BOE, correcting any assessment which is unlawful, unfair, improper, arbitrary, or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2).
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, 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 RSMo (2000) as amended. 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.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.
In the present appeal, the BOE lowered the initial valuation of Respondent, and Complainant is now seeking to lower the BOE’s assessment; therefore, the BOE presumption applies to Complainant.
Complainant’s Burden of Proof
To obtain a reduction in assessed value based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
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, 2017. Hermel, supra. There is no presumption that Complainant’s opinion is correct. The taxpayer in an STC appeal still bears the burden of proof because 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); Industrial Development Authority of Kansas City v. State Tax Commission of Missouri, 804 S.W.2d 387, 392 (Mo. App. 1991). A valuation which does not reflect the true market value of the property under appeal is an unlawful, unfair, and improper assessment.
Presumption in Appeal
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, 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).
There is no presumption that the taxpayer’s opinion is correct. Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc. v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc., 827 S.W.2d at 783. 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. E.D. 1980).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money and 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 deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer, as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
In this appeal, no expert witness testified, and no evidence prepared by an expert witness was submitted.
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the STC. 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, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “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 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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.
Complainants’ evidence was neither substantial nor persuasive to rebut the presumption of correct assessment by the BOE. Substantial evidence is that which is relevant, adequate, and reasonably supports a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. Persuasive evidence is that which causes the trier of fact to believe, more likely than not, the conclusion advocated is the correct conclusion. Id.
In particular, Complainant argued that the comparable properties in Exhibits I, J, K, L, M, and N, should have been used to value the subject property. According to those exhibits, the appraised value or market value estimate of the comparable properties ranged from $150,700 to $318,600. However, these exhibits did not provide evidence that can be considered relevant, adequate, and reasonable to support a conclusion that the subject property’s TVM was $300,000 as of January 1, 2017. Exhibits I through N did not provide evidence that compels the conclusion that, more likely than not, a TVM of $300,000 as of January 1, 2017, is the correct conclusion. Exhibits I through N did not utilize any of the three generally accepted approaches to valuing property for purposes of tax assessment. To the extent that Exhibits I through N attempted to utilize the sales comparison approach to determining the TVM of the subject property, it is important to note that these exhibits failed to make any market-based dollar adjustments to the appraised values or market value estimates of the comparable properties to support Complainant’s opinion of the subject property’s TVM. A closer look at the comparable properties in Exhibits I through N reveals that there were important differences between them and the subject property, which calls into question whether the comparable properties could be compared to the subject property, even if market-based adjustments had been made. For example, the comparable properties were built between 1907 and 1953. The subject property was built in 2008. The total living area of the comparable properties ranged between 891 square feet and 1,352 square feet. The total living area of the subject property is 1,977 square feet. More importantly, Exhibits I through N compared the comparable properties to other properties similar to the comparable properties for purposes of informing taxpayers of the basis for the appraised value or market value estimate of the comparable properties. To the extent that Complainant argues that the uniqueness of the subject property should have been factored into its valuation, the record is devoid of any objective evidence establishing that an ADA compliant residence should be valued at an amount less than an otherwise identical residence.
Consequently, the Hearing Officer was not presented with substantial and persuasive evidence establishing that the subject property’s TVM was $300,000.
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax year 2017 is set at $66,291 residential ($348,900 TVM).
Application for Review
A party may file with the STC 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 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 St. Louis 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 July 3rd, 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 3rd day of July, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
 Immediately prior to the start of the evidentiary hearing, Complainant requested a continuance on the ground that his subpoena duces tecum had not yet been served upon Respondent. The record in this case reveals that the parties had engaged in discovery in the months between a scheduled prehearing conference and the evidentiary hearing. Complainant filed motions to compel discovery, which the Hearing Officer denied in interlocutory rulings. Complainant filed for a subpoena duces tecum on or about March 19, 2018. The STC issued the subpoena, which Complainant stated he received on March 20, 2018, eight days before the hearing; however, Complainant failed to serve the subpoena on the ground that it would have been served seven days or less before the date of the evidentiary hearing, in violation of the administrative tribunal’s rules. Respondent opposed a continuance of the evidentiary hearing on the ground that documents requested and in Respondent’s possession had been produced. The Hearing Officer denied the request for continuance.