State Tax Commission of Missouri
DAVID M. TRAINOR,)
)
Complainant,)
)
v.)Appeal No.11-72002
)
JUDY HARMON, ASSESSOR,)
MONROE COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On February 8, 2012, Senior Hearing Officer W. B. Tichenor entered his Decision and Order (Decision) affirming the assessment by the Monroe County Board of Equalization.
Complainant filed his Application for Review of the Decision.[1]
CONCLUSIONS OF LAW
Standard Upon Review
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.[2]
The Hearing Officer as the trier of fact may consider the testimony of a 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 an owner who testifies
on the issue of value, but may believe all or none of the owner’s testimony and accept it in part or reject it in part.[3]
The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[4]
DECISION
Complainant in his Application for Review sets forth various points of disagreement with the Decision.None of the arguments raise a claim of a misapplication of the law by the Hearing Officer.Nor do the arguments assert any errors of fact.The letter of Mr. Trainor essentially goes over arguments which apparently were made at the evidentiary hearing and were found to not be persuasive by the Hearing Officer.
Mr. Trainor’s main point of contention is the valuation of the three agricultural buildings.The Hearing Officer addressed this at page 9 of the Decision.He found that Mr. Trainer testified to his opinions of value for each of the buildings and there was no material difference between those opinions of value and the values determined by the Board.The transcript supports the Hearing Officer’s finding.[5]
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or
capricious manner or abused his discretion as the trier of fact and concluder of law in this appeal.[6]
The Hearing Officer did not err in his determinations.
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is incorporated by reference, as if set out in full, in this final decision of the Commission.
Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.
If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.
If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of Monroe County, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.
SO ORDERED March 27, 2012.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
DECISION AND ORDER
HOLDING
Decision of the Monroe County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax years 2011 and 2012 is set at $205,500, assessed value of $35,060.Complainant appeared pro se.Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the Monroe County Board of Equalization, which reduced 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, 2011.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 Monroe County Board of Equalization.A hearing was conducted on November 17, 2011, at the Monroe County Courthouse, Paris, Missouri.
2.Assessment. The Assessor appraised the property at $223,700, a total assessed value of $38,800.[7]The residential valuation was $170,800, assessed value of $32,450.[8]The agricultural valuation was $52,900, assessed value of $6,350.[9] The Board reduced the residential value to $148,500, assessed value of $28,220 and sustained the agricultural value.[10]
3.Subject Property.The subject property is located at 34557 Route D, Santa Fe, Missouri.The property is identified by map parcel number 22-4.1-18-0-0-3.
The property consists, in part, of a one acre residential tract improved by a home built in 1985, with a base area of 3,732 square feet and an adjusted area of 5,256 square feet.The home is brick with a finished basement.[11]
The property also has 80.17 acres that are valued according to agricultural land productivity values.The agricultural improvements consist of a 2,232 square foot shed (built in 1998), a 2,304 square foot shed (build in 2003), and a 3,776 square foot barn (build in 2002).The appraised values for these buildings set by the Board were: $7,730, $20,500 and $9,430, respectively.[12]
4.Complainant’s Evidence.Complainant testified in his own behalf[13] and offered into evidence the following exhibits which were received without objection.
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EXHIBIT |
DESCRIPTION |
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A |
Photographs of subject outbuildings |
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B |
Complainant’s Cost Calculations for agricultural buildings |
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C |
Tax History on valuation of house and agricultural buildings |
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D |
Information of Class B44 Building |
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E |
Newspaper listing on prices for pole barns |
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F |
Photographs and information on two home sales |
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G |
Auction Flyer on Real Estate and Estate Auction |
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H |
Property Record Cards on Subject |
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I |
Classification Formulas for Barns for Monroe County |
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J |
Depreciation Schedules for Homes and Metal Buildings for Monroe County |
Complainant testified at hearing to an opinion of value for the residential portion of the property to be $150,000.[14]Accordingly, the claim of overvaluation for the residential portion was deemed to be abandoned.Complainant did not challenge the agricultural land value.Complainant only challenged the value of the three agricultural improvements.
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, 2011, for the property under appeal.See, Complainant Fails To Prove Value, infra.
5.New Construction.Complainant testified that during 2011 work was being done on enclosing an open porch into a mudroom.It was anticipated the work would be completed by the end of 2011.The estimated total cost for this conversion of the open porch to an enclosed mudroom would be approximately $2,700.[15]The Hearing Officer is unable to conclude that this construction would in fact had significant contributory value to the subject residence for the 2012 assessment, therefore the assessed value for 2011 remains the assessed value for 2012.[16]
6.Respondent’s Evidence.Respondent testified in her own behalf and offered into evidence the following exhibits which were received into the record.
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EXHIBIT |
DESCRIPTION |
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1 |
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2 |
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3 |
MLS data sheet on property at 24704 Monroe Rd 326, Stoutsville, MO |
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4 |
MLS data sheet on property at 36874 Monroe Rd 580, Stoutsville, MO |
Respondent’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, 2011, for the property under appeal.See, Respondent Fails To Prove Value, infra.
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.[19]
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.[20]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.[21]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[22]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.The presumption of correct assessment is rebutted when the taxpayer or Respondent when advocating a value different than the Board’s value 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.[23]Neither Complainant nor Respondent presented substantial and persuasive evidence to establish that the Board’s assessment was in error.
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.[24]True value in money is defined in terms of value in exchange and not value in use.[25]It is the fair market value of the subject property on the valuation date.[26]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.[27]
The evidence presented by each party failed to establish a valuation which met the Standard for Valuation.
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.[28]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.[29]Neither Complainant, nor Respondent presented an opinion of value based upon a recognized methodology for the appraisal of real property in an appeal before the Commission.
Complainant Fails To Prove Value
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, 2011.[30]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.”[31]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.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[32]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.[33]
Exhibits and Testimony
The exhibits received on behalf of Complainant did not provide substantial and persuasive evidence to establish a value for the subject property that was significantly different from the value set by the Board.[34]The evidence presented provided no basis for a reduction in the value of the residential or agricultural portions of the subject property.
Exhibits A & B – Photographs and Cost Information:The exhibits provide photographs of the agricultural buildings which are on Complainant’s land and the taxpayers notations relative to the year of construction for each of the buildings and the cost for construction.Mr. Trainor’s testimony gave his opinions of value for each of the three buildings to be the cost he had in each building.The values for the three buildings given by the taxpayer were: Shed – $11,180; Barn/Shop – $11,103 and Barn/Shed – $20,458.[35]
Exhibit C – Tax History on Buildings:The exhibit provides no relevant information to establish the value of either the residential portion of the taxpayer’s property or the value of the three contested agricultural buildings.
Exhibit D – Information on a B44 Building:The document provides no relevant information to establish that the value on this building of $20,500 was in error.
Exhibit E – Newspaper Information on Pole Barns:The document is hearsay that has no relevant information to establish true value in money for any of the subject’s agricultural
buildings.Complainant did not establish that the use of newspaper listings is a recognized methodology to appraise property or establish a value for agricultural buildings.
Exhibits F & G – Information on Home Sales:The documents are hearsay that have no relevant information to establish the fair market value of the subject’s residential property.Such information is not recognized as an appropriate methodology to establish the value of a residence.
Exhibit H – Subject’s Property Record Card:The exhibit provides no information that the value placed on the taxpayer’s house or agricultural buildings was in error.
Exhibit I – Classification Formulas for Barns:The exhibit provides no information that the value placed on the taxpayer’s agricultural buildings was in error.
Exhibit J – Depreciation Schedule:The exhibit provides no information that the value placed on the taxpayer’s house or agricultural buildings was in error.
Owner’s Opinion Supports Board Valuation
Mr. Trainer testified at hearing and gave his opinion of value for the residential portion of his property and for the three agricultural buildings which were the main issue he presented.No challenge to the agricultural land value was presented.
The owner of property is generally held competent to testify to its reasonable market value.[36]The first element under the taxpayer’s burden of proof it to provide an opinion of value for the property under appeal.In this case, Mr. Trainer stated his opinion of value for the residential property to be $150,000, albeit, his belief that would be the top value a buyer would have given for the residential site on January 1, 2011.The Board’s value for the residence was $148,500.Essentially, the taxpayer was in agreement with the residential value.There was no material dispute on this point.
As to the three agricultural buildings on the subject property, Mr. Trainer testified to his opinions of value for the three buildings to be $11,180, $11,103 and $20,458.The Board values for these respective buildings are: $7,730, $9,430 and $20,500.In other words, here again, there is no material difference between the Board values and the owner’s opinions.If anything, the owner’s opinions of value on the first two buildings is higher than the Boar values.As to the third building the variance between the values of only $42 is not significant.
On each valuation point the owner’s opinion was in general agreement with the Board’s valuation for the subject property.The owner’s opinion and Complainant’s evidence failed in any way to rebut the presumption of correct assessment by the Board.In point of fact, based upon Mr. Trainer’s opinions of value, there was no legitimate dispute as to the assessment of the property under appeal.Accordingly, the Board’s valuation must be affirmed.
Respondent Fails To Prove Value
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[37]The information presented in Respondent’s exhibits and testimony did not constitute a valuation of the subject property under any accepted appraisal methodology that could rebut the presumption of correct assessment by the Board.In particular, with regard to the valuation of the residence, Respondent’s evidence was not substantial and persuasive to establish value for the subject home.While information contained in MLS data can be use and relied upon in an appraisal of real estate, the presentation of such information, without being used to develop and appraisal, does not provide an indicated value for the property under appeal.
Conclusion
Neither the Complainant nor Respondent presented substantial and persuasive evidence that rebutted the presumption of correct assessment by the Board.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Monroe County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2011 and 2012 is set at $$35,060, $28,220 – residential and $6,840 – agricultural.
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, 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 application for review is based will result in summary denial. [38]
Disputed Taxes
The Collector of Monroe 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 8, 2012.
STATE TAX COMMISSION OFMISSOURI
W. B. Tichenor
Senior Hearing Officer
[2] 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).
[3] 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).
[4] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[6] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[8] Residential property is assessed at 19% of its appraised value (true value in money, fair market value).Section 137.115.5 RSMo.
[9] Agricultural land is assessed at 12% of its Agricultural Land Productive Value (12 CSR 30-4.010) and agricultural improvements are assessed at 12% of their appraised value (true value in money, fair market value).Section 137.115.5 RSMo.
[17] Consisted of the following documents: (1) Summary statement; (2) Notice of Change in Assessed Value on Subject; (3) 2011 Property Record Card – Subject; (4) Minutes of BOE Meeting, 7/18/11; (5) Photographs of subject house and agricultural buildings and two comparison homes
[22] 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)
[23] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[24] 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).
[25] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[27] 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.
[28] 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).
[29] 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).
[31] 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).