State Tax Commission of Missouri
| DONALD HALL, | ) | |
| ) | ||
| Complainant, | ) | |
| ) | ||
| v. | ) | Appeal Number 14-47012 |
| ) | ||
| KAYLA HENRY, ASSESSOR, | ) | |
| CAMDEN COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Assessor is SET ASIDE. Respondent presented substantial and persuasive evidence to establish the true (market) value of the subject property.
True value in money for the subject property for tax year 2014 is set at $151,000, commercial assessed value of $48,320.
Complainant appeared in person.
Respondent appeared in person and by counsel, Prosecuting Attorney Michael Gilley. Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
Complainant appeals, on the ground of overvaluation. The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2013. 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 and improvement to the property. Section 137.115.1 RSMo
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.
- Evidentiary Hearing. The Evidentiary Hearing was held on August 31, 2015 at the Camden County Courthouse.
- Identification of Subject Property. The subject property is identified by map parcel number 072.003.3000.0000038.001. It is further identified as 13994 Highway 5, Sunrise Beach, Missouri.
- Description of Subject Property. The subject property consists of a tract of land with 106-109 feet of road frontage, improved by a 1 story, steel construction, warehouse building with 3 overhead doors and office space. The improvement is approximately 800 square feet.
- Assessment. The previous Assessor appraised the property at $173,170.
- Complainant’s Evidence.
| Exhibit | Description |
| A | Tax Receipt from 2012 on the vacant lot which Complainant sold |
| B | Tax Receipt from 2012 on three parcels |
| C | Real Estate Tax Collection Detail – 2013 – Taxes Paid |
| D | Real Estate Tax Collection Detail – 2013 – Taxes Paid – Adjacent Lot |
| E | Tax Statement 2014 of the parcel sold |
| F | Tax Statement 2014 on subject property |
| G | Settlement Statement dated 11/28/2013 |
| H | Letter from Maureen Monaghan, State Tax Commission, dated 12/22/14 |
| I | Letter to Maureen Monaghan, dated 1/23/15 |
| J | MLS information on 3121 Old Rt. 5 |
| K | Map of the parcels |
| L | Property Record Card of Scotty’s Drive In |
Exhibits A – I were filed in advance pursuant to the Exchange Order. Exhibits J-L were offered during the hearing. Objections were made to J-L in that the Complainant failed to provide the exhibits in advance of the hearing. Exhibit J was provided as a sale comparable. Certified Appraiser Woodard testified that the property in Exhibit J was not comparable due to the location and type of building. Exhibit K was utilized by both parties to understand the various parcels being discussed by the witnesses. Exhibit L was the Assessor’s Property Record Card on another property. The Assessor’s value does not establish market value of a property and Certified Appraiser Woodard testified to the differences in the properties (subject parcel and the parcel in the offered record) and concluded that it was not a comparable property for valuation purposes. The Complainant testified that his opinion of value was $100,000.
- Respondent’s Evidence.
| Exhibit | Description |
| 1 | Appraisal Report dated 3/17/15 effective 1/1/14 by certified General Appraiser Woodard |
| 2 | Written Direct Testimony of Woodard and Henry |
| 3 | Property Record Card of the subject parcel |
| 4 | Warranty deed dated 6-19-1997 |
| 5 | Warranty deed dated 7-1-1989 |
| 6 | Property record card of subject |
| 7 | Letter dated April 21, 2015 to Camden County from Appraisal Research |
Exhibit 7 is a letter from the certified general appraiser that the subject front footage was actually 106 feet rather than 120 feet. The appraiser adjusted his opinion of value to $151,000.
- True Value. True Value for subject property is $151,000.
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. 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.
Complainant’s Burden of Proof
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. 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.” 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 fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value. 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). The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation. 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).
“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.” Carmel Energy at 783.
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.” See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980).
The Complainant presented assessment information regarding the subject parcel with adjacent parcels. The Complainant owned the parcels on each side of the subject property. When a portion of the property was sold, the Complainant anticipated that the true value as determined by the Assessor would be much lower and hence his tax bill would be adjusted accordingly. The Complainant argued that his tax bill was not reduced in accordance with the amount of property sold.
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. 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). True value in money is defined in terms of value in exchange and not value in use. 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).
Weight to be Given Evidence
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. 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 he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part. 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).
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. 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). 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. Div. 2 1974).
Discrimination
Complainant raised the issue of discrimination at the hearing. In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the true value in money of their property and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction. Koplar v. State Tax Commission, 321 S.W.2d 686, 690, 695 (Mo. 1959). 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 v. State Tax Commission of Missouri, 722 S.W.2d 72, 79 (Mo. banc 1986). No other methodology is sufficient to establish discrimination. Cupples-Hesse, supra.
Complainant’s discrimination claim fails because he failed to establish the market value of his property. Without establishing the market value, he cannot establish the assessment ratio. Without establishing the ratio, he cannot establish that he is being assessed at a higher percentage of market value that any other property.
However, even if Complainant had established the market value, the discrimination claim would still fail because he has not demonstrated that a statistically significant number of other commercial properties are being assessed at a lower ratio of market value than the subject property.
Respondent Proves Value
Respondent presented substantial and persuasive evidence to establish a fair market value for the subject property. Respondent’s appraiser, a State Certified General Appraiser, developed an opinion of value relying upon an established and recognized approach for the valuation of real property, the sales comparison and cost approach.
The appraiser utilized sales of three comparable properties. The properties were selected due to the construction of the properties (steel warehouse buildings), location and condition of sales. The appraiser made adjustments to the comparable sale prices for any differences and concluded a value of $151,819.
Complainant cross examined the appraiser regarding other sales in the area. The appraiser testified that he did not utilize any sales he considered “repo” sales by banks. It was his opinion that the sales did not represent market sales but were in fact distressed sales. Complainant argues that the price paid at foreclosure sale is relevant in determining value for this property. However, “[t]he market value means the fair value of the property as between one who wants to purchase and one who wants to sell, not what could be obtained under peculiar circumstances when a greater than its fair price could be obtained, nor its speculative value; not a value obtained from the necessities of another; nor, on the other hand, is it to be limited to that price which the property would bring when forced off at auction under the hammer. It is what it would bring at a fair public sale, when one party wanted to sell and the other wanted to buy.” Kansas City, W & NWR Co. v. Fisher, 49 Kans 18 (1892).
The appraiser also developed the cost approach. Under the cost approach, the appraiser developed an opinion of value of $158,506.
The appraiser placed most weight on the sales comparison approach.
Complainant crossed examined the appraiser regarding the age of the property and water contamination. The appraiser testified that he reviewed the true age of the property and its condition for a calculation of an effective age. The Appraiser, upon being cross-examined regarding water contamination on the property, testified that he was unaware of any issue and did not make that consideration when valuing the property. No reports were submitted regarding water contamination either establishing it as an issue, establishing the cost of remediation, or establishing its impact on market value.
The Respondent presented substantial and persuasive evidence – appraisal report and amended opinion of value after consideration of the reduced front footage – to establish value of $151,000.
ORDER
The assessed valuation for the subject property as determined by the Assessor for the subject property is SET ASIDE.
The assessed value for the subject property for tax year 2014 is set at $48,320.
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, 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
Disputed Taxes
The Collector of Camden 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 this 15 day of September, 2015.
STATE TAX COMMISSION OF MISSOURI
Maureen Monaghan
Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 15 day of September, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.
Jacklyn Wood
Legal Coordinator