STATE TAX COMMISSION OF MISSOURI
| DEBORAH RIMMEY, | ) | |
| Complainant, | ) | Appeal No. 19-20135 |
| ) | Parcel No. 5986-00-0240-0 | |
| ) | ||
| v. | ) | |
| ) | ||
| MICHAEL DAUPHIN, ASSESSOR, | ) | |
| CITY OF ST. LOUIS, MISSOURI | ) | |
| Respondent. | ) |
DECISION AND ORDER
Deborah Rimmey (Complainant) appeals the City of St. Louis Board of Equalization’s (BOE) decision finding the classification of the subject property on January 1, 2019, was commercial. Complainant claims the property is misclassified and proposes a classification of residential. An evidentiary hearing was held on March 6, 2020, and both parties were allowed time to and did submit post-hearing briefs. Complainant did not produce substantial and persuasive evidence establishing misclassification. The BOE’s decision is affirmed.[1]
Complainant is represented by counsel Drew Bolinger. Respondent is represented by counsel Deborah Deuster.
FINDINGS OF FACT
- Subject Property. The subject property is located at 6541 Winona Avenue in St. Louis, Missouri. The parcel/locator number is 5986-00-0240-0. Complainant is the owner of the subject property. (WDT Complainant No. 2.)
The subject property consists of an approximate 4,375 square foot lot and an approximate 1,200 – 1,600[2] square foot home that is located in a residential neighborhood and surrounded by single-family residential homes. (WDT Complainant Nos. 11-12.) The home has four bedrooms, two bathrooms, and a swimming “pool for private use by the tenants.” (Ex. 3 VRBO at 1; Ex. 3 HomeAway at 1; WDT Complainant No. 13.)
- Assessment and Valuation. Respondent classified the subject property as commercial and determined the true value in money (TVM) on January 1, 2019, was $197,800. The BOE also classified the subject property as commercial and determined the TVM on January 1, 2019, was $197,800.
- Complainant’s Evidence. Complainant asserts that the proper classification of the subject property as of January 1, 2019, is residential pursuant to sections 137.016.1(1) and 137.016.5 and does not challenge the BOE’s determination of the TVM of the subject property. Complainant testified and submitted the following exhibits:
| Exhibit | Description | Ruling |
| A | Assessor Change of Assessment Notice dated May 2019 | Admitted |
| B | Zoning map of properties on Winona Ave. | Admitted |
| C (WDT Complainant) | Prefiled Direct Testimony of Deborah D. Rimmey | Admitted |
Respondent did not object to Complainant’s exhibits, and Exhibits A through C were received into evidence.
- Respondent’s Evidence. Respondent asserts that the BOE properly classified the subject property as commercial as of January 1, 2019. Respondent presented the testimony of Deputy Assessor Shawn Ordway and submitted the following exhibits:
| Exhibit | Description | Ruling |
| 1 | Shawn T. Ordway Curriculum Vitae | Admitted |
| 2 | Guidelines on Classification of Short-term Rentals for the City of Saint Louis, Office of the Assessor | Admitted |
| 3 HomeAway | Snapshots from the internet from 2019 regarding subject property on HomeAway website | Admitted |
| 3 VRBO | Snapshots from the internet from 2019 regarding subject property on VRBO website | Admitted |
| 8 (WDT Ordway) | Prefiled direct testimony of Shawn T. Ordway[3] | Admitted |
| 8(a) | Prefiled rebuttal testimony of Shawn T. Ordway[4] | Admitted |
| 9 | Voluntary Agreement for City of St. Louis Transient Occupancy Tax between Airbnb and the License Collector of the City of St. Louis, dated Oct. 23, 2018 (with affidavit) | Admitted |
| 10 | March 2, 2020, print out of the Office of the License Collector web page Hotel/Motel Room Tax (with affidavit) | Admitted |
| 11 | Print out from Airbnb website of occupancy tax collection and remittance by Airbnb in Missouri | Admitted |
| 12 | VRBO Rental Rules | Admitted |
| 13 | Airbnb Rental Rules | Admitted |
| 14 | Airbnb and VRBO completed reservations for 2018 and 2019 | Admitted |
| 15 | Terms of Service for Airbnb | Admitted |
| 16 | Terms and Conditions for HomeAway | Admitted |
Complainant did not object to Respondent’s exhibits, and Exhibits 1, 2, 3 HomeAway, 3 VRBO, 8, 8(a), 9, 10, 11, 12, 13, 14, 15, and 16 were received into evidence.
- Evidence at Hearing. The evidence shows the following: About six years prior to the evidentiary hearing, Complainant began to rent the subject property on rental platforms such as Airbnb and VRBO. (Tr. 16:14.) As of January 1, 2019, Complainant regularly offered the subject property for short-term rental. (Tr. 16:24.) As of January 1, 2019, the subject property was not the primary residence of Complainant, her 19-year-old daughter, nor her 21-year-old son. (Tr. 15:38; Tr. 18:00.) In 2018, the subject property was actually rented a total of 148 nights, which included seven nights on Airbnb and 141 nights on VRBO. (Tr. 20:08; Ex. 14 at 1, 2.) In 2019, the subject property was actually rented a total of 116 nights, which included 23 nights on Airbnb and 93 nights on VRBO. (Tr. 22:44-23:15; Ex. 14 at 3, 4; WDT Complainant No. 15.) During 2018 and 2019, the subject property was removed from rental platforms sometimes for Complainant’s children’s use, birthday parties, maintenance, repairs, and personal family use. (Tr. 16:36-17:06.) In 2019, Complainant’s college-age children stayed at the subject property approximately 75 days, and families of St. Louis Children’s Hospital patients used the property, free of charge, for approximately 14 days. (WDT Complainant Nos. 19-20.) Complainant testified that insurance is provided through Airbnb and VRBO, and she does not believe that she has homeowner’s insurance for the subject property. (Tr. 18:43-19:02.) Rental rules for the subject property were posted for VRBO and Airbnb. (Tr. 22:19-42; Ex.12; Ex. 13.) For 2019, Complainant did not appeal the assessment of business personal property taxes for the equipment, furniture, and fixtures located at the subject property. (Tr. 50:53-52:17; WDT Ordway No. 27.)
- Classification. Complainant did not prove by substantial and persuasive evidence that the subject property was misclassified. Therefore, the BOE’s classification of the subject property as commercial as of January 1, 2019, is affirmed.
CONCLUSIONS OF LAW
- Assessment and Valuation. 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). Commercial real property is assessed at 32% of its TVM as of January 1 of each odd-numbered year 137.115.5(1)(c). “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).
- Evidence. 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). 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. “Determining whether a property’s use falls within one of the subclassification definitions set forth in section 137.016.1 is an issue of fact for the STC.” Rinehart v. Bateman, 363 S.W.3d 357, 366 (Mo. App. W.D. 2012).
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s classification is presumptively correct. Rinehart, 363 S.W.3d at 367. “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Id. (internal quotation omitted). “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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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”).
- Complainant Did Not Prove Misclassification. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct classification by the BOE.[5] Section 137.016.1(3) defines “[u]tility, industrial, commercial, railroad and other real property,” in part, as “all real property used directly or indirectly for any commercial, mining, industrial, manufacturing, trade, professional, business, or similar purpose.” While Complainant produced evidence that the subject property was sometimes used by her and her family for personal purposes and by families of St. Louis Children’s Hospital patients, Complainant’s evidence was not sufficient to rebut the presumption of correct classification by the BOE. The evidence showed that the subject property was neither the primary residence of Complainant nor her children and was regularly offered for short-term rental through vacation rental platforms in 2018 and 2019. Further, the assessment of the personal property located at the subject property as business personal property was not challenged by Complainant; the insurance for the subject property is provided through VRBO and Airbnb; and there is no evidence that Complainant has homeowner’s insurance on the subject property.
CONCLUSION AND ORDER
The BOE’s decision is affirmed. The proper classification of the subject property is commercial with an appraised value of $197,800 as of January 1, 2019.[6]
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.
Disputed Taxes
The Collector of the City of St. Louis, 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 September 24, 2021.
Laura A. Storck-Elam
Senior Hearing Officer
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 September 24, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina Mejia
Legal Coordinator
[1] 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.
[2] Exhibit C, the Prefiled Direct Testimony of Complainant, indicates that the structure is “approximately 1,200 – 1,600 sq./ft. depending on whether the upper half story is included in the calculation.”
[3] Although Mr. Ordway also referenced Exhibits 4, 5, 6, and 7, these four exhibits were not offered and received into evidence at the March 6, 2020, evidentiary hearing. Exhibits 4, 5, 6, and 7 were referenced in Exhibit 8, the written direct testimony of Mr. Ordway, to show that Complainant did not reside at the subject property and resided at a different property. These facts were not disputed at the evidentiary hearing.
[4] Mr. Ordway’s references to Exhibit 8, an agreement between Airbnb and the License Collector of the City of St. Louis, and Exhibit 9 appear to mean Exhibits 9 and 10, respectively.
[5] The determination that Complainant did not rebut the presumption of correct classification by the BOE is limited to the specific facts of this appeal. Decisions of administrative agencies are not precedent. Spire Missouri, Inc. v. Pub. Serv. Comm’n, 618 S.W.3d 225, 235 (Mo. banc 2021).