State Tax Commission of Missouri
DOUGLAS KIRKHAM,)
)
Complainant,)
)
v.) Appeal Number 10-80501
)
PAUL ROUSE, ASSESSOR,)
PUTNAM COUNTY,MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Putnam County Board of Equalization reducing the assessment made by the Assessor is SET ASIDE.True value in money for the subject property for tax year 2010 is set at $14,000, residential assessed value of $2,660.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 Putnam 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, 2009.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 Putnam County Board of Equalization.A hearing was conducted on January 11, 2011, at the Putnam County Courthouse,Unionville,Missouri.
2.Assessment.The Assessor appraised the property for the 2010 tax year at $34,990, a residential assessed value of $6,650.The Board reduced the valuation to $22,740, a residential assessment of $4,320.[1]
3.Subject Property.The subject property is located at 205 East C Avenue, Livonia, Missouri.The property is identified by map parcel number 001+140828084.The property consists of a 60 x 116 foot lot.There is a 40 x 100 foot block storage building, with kitchen and bathroom facilities on the lot.The building was constructed in 1950.[2]On January 1, 2009, the property was owned by the Baker-Sparks American Legion Post.It was on the role of exempt property for Putnam County.[3]Complainant purchased the property in July, 2009 for $14,000.[4]
4.Complainant’s Evidence.Mr. Kirkham testified in his own behalf.He gave his opinion of value for the subject property to be $14,000 based upon his purchase on July 14, 2009.The property was listed with a real estate agent at the time of sale.Prior to the property being listed with the real estate agent, the American Legion Post had solicited bids on the property.[5]The following exhibits were received into evidence on behalf of Complainant.
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Exhibit |
Description |
|
A |
Settlement Statement, dated 7/14/09 – Sales Price $14,000 |
|
B |
Property Tax Appeals before the STC – Glossary of Terms, pp. 7 & 8 |
|
C |
Property Reassessment and Taxation – Market Value, p. 5 |
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for the property under the economic conditions of January 1, 2009 establishes the assessed value for 2010.[6]
Complainant’s evidence was 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 $14,000, as proposed.See, Complainant Proves Value of $14,000, infra.
5. Respondent’s Evidence.Respondent testified in his own behalf as to the valuation under the mass appraisal system used inPutnamCounty.Exhibit 1 – the Property Record Card on the subject property and Exhibit 2 – Photographs of the subject were received into evidence.Mr. Rouse also gave testimony to the use and assessment of the property as exempt for the 2009 tax year due to its being owned by a local American Legion Post.
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.[7]
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.[8]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.[9]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 CountyBoardof Equalization.[10]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.When some substantial evidence is produced by the Complainant, “however slight,” the presumption disappears and the Hearing Officer, as trier of facts, receives the issue free of the presumption.[11]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.[12]Upon presentation of the Complainant’s evidence[13] the presumption in this appeal disappeared.The case is decided free of the presumption.
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.[14]True value in money is defined in terms of value in exchange and not value in use.[15]It is the fair market value of the subject property on the valuation date.[16]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.[17]
Complainant’s purchase of the property under appeal in July 2009 satisfied 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.[18]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.[19] The purchase price of a property may also be considered in arriving at a conclusion of its value.[20]
Complainant Proves Value of $14,000
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.[21]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.”[22]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[23]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.[24]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[25]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[26]In the present appeal, the owner based his opinion of the fair market value on his purchase of the property in July, 2009.
Sale of Subject
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.[27]
The transfer of a property between a willing buyer and seller creates the presumption that the transaction was a market transaction.
The July 2009 purchase by Mr. Kirkham was at a time relevant to establish the true value in money of the property as of January 1, 2009.The parties to the transaction consisted of a willing buyer and willing seller.The transaction between the American Legion Post and Complainant constituted an open-market, arm’s-length transaction.No evidence was presented upon which the Hearing Officer can conclude that the Complainant’s purchase was not indicative of the property’s fair market value at the time of purchase.There is no evidence to provide a basis that the sale price need be adjusted for time of sale to arrive at a value for January 1, 2009.
Complainant’s opinion of value was founded upon the proper element of a market purchase.That opinion had a property foundation in the July 2009 transaction by which Mr. Kirkham obtained title to the property.Complainant’s testimony and Exhibit A constitute substantial and persuasive evidence to rebut the presumption of correct assessment and establish the true value in money as of January 1, 2009, to have been $14,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization forPutnamCountyfor the subject tax day is SET ASIDE.
The assessed value for the subject property for tax year 2010 is set at $2,660.
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. [28]
Disputed Taxes
The Collector of Putnam 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 15, 2011.
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 15thday of February, 2011, to:Douglas Kirkham, 1301 E. Jefferson Street, Kirksville, MO 63501, Complainant; James Garrett, Prosecuting Attorney, 1702 W. Main, Unionville, MO 63565, Attorney for Respondent; Paul Rouse, Assessor; Chrystal Perkins, Clerk; Sharon Thompson, Treasurer & ex officio Collector, Putnam County Courthouse, Unionville, MO 63565.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[1] Respondent testified that residential classification was appropriate for the property under appeal for the 2010 assessment.
[10] 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)
[11] United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) and cases therein cited.
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[14] 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).
[15] 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).
[17] 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.
[18] 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).
[19] 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).
[22] 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).
[25] 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).
[26] 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).