State Tax Commission of Missouri
FRANK ROSNER,)
)
Complainant,)
)
v.) Appeal Number 09-32503
)
SCOTT SHIPMAN, ASSESSOR,)
ST. CHARLES COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the St. Charles County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax year 2009is set at $181,360, residential assessed value of $34,460.True value in money for tax year 2010, is set at $195,530, residential assessed value of $37,150.Complainant appeared pro se.Respondent appeared by Charissa Mayes, Assistant County Counselor
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the St. Charles County Board of Equalization, which sustained 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 St. Charles County Board of Equalization.A hearing was conducted on March 29, 2010, at the St. Charles County Administration Building, St. Charles, Missouri.
2.Assessment.The Assessor appraised the subject property at $181,360, assessed residential value of $34,460.The Board of Equalization sustained that assessment.[1]
3.Subject Property.The subject property is located at 10 Vicksburg Station, St. Charles, Missouri.The property is identified by map parcel number 3-0118-5166-00-231 and Assessor’s Account Number 450000B009.The property consists of .70 of an acre lot improved by a two-story frame and brick, single-family structure of average quality construction.The house was built in 1978 and appears to be in average condition for a home constructed at that time.Overall condition and items of deferred maintenance are typical for this age house that has not been updated.The residence has a total of five rooms, with two bedrooms, two baths, and contains 1,916 square feet of living area.There is a full walkout basement and a two-car rear entry garage.[2]
4.Complainant’s Evidence.Complainant testified in his own behalf.He stated his opinion of fair market value for 2009 to be $150,000.A 22 x 31 detached two-car garage with concrete floor, electrical service, roughed in plumbing and overhead doors was completed in November 2009.Mr. Rosner opined a fair market value as of January 1, 2010, of $170,000.
The following exhibits were offered into evidence by Complainant:
|
EXHIBIT |
DESCRIPTION |
DISPOSITION |
|
A |
List of Deferred Maintenance Items |
Received |
|
B |
St. Louis Post Dispatch Article – 6/14/09-Disclosure Laws |
Obj.-Excluded |
|
C |
Multi-Listing Service Sheet on 2713 Heritage Landing |
Received |
|
D |
Multi-Listing Service Sheet on 2574 Trenton Station |
Received |
|
E |
Photographs of Subject – Condition problems |
Received |
|
F |
Repair Bid Driveway |
Obj.-Received |
|
G |
Repair Bid HVAC |
Obj.-Received |
|
H |
Repair Bid Door/Windows, etc. |
Obj.-Received |
Objection was made to Exhibit B on the grounds of relevance and hearsay.Objection was sustained.Exhibit is maintained in the Commission file, but it not part of the evidentiary record for purposes of rendering a decision.Objection was made to Exhibits F, G and H on the grounds of hearsay and relevance.Objection was overruled.[3]
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, 2009, to be $150,000, as proposed, or $170,000 for January 1, 2010.
5.Respondent’s Evidence.Respondent presented the testimony and Appraisal Report[4] of Ms. Lynne Mesey.The appraiser developed a sales comparison approach relying on five sales comparable to the subject.The sale properties were located within less than a half mile of the subject.Each sale property sold at a time relevant to the tax date of January 1, 2009.The sale properties were similar to the subject in style, quality of construction, age, condition, room, bedroom and bathroom count, living area, location, site size and other factors of comparability. Adjustments made were appropriate for the appraisal problem.The resulting range of adjusted sales prices was from $195,400 to $225,800, with a median of $215,660.Respondent’s evidence met the standard of substantial and persuasive to rebut the presumption of correct assessment by the Board and establish the value of the subject, as of January 1, 2009, to be $215,000.Respondent’s appraisal was accepted only to sustain the original assessment made by the Assessor and not for the purpose of raising the assessed value above $34,460 for tax year 2009.
6.Valuation for 2010.There was evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 does not remain as the assessed value for 2010, but must be adjusted to account for the addition of a detached garage to the subject property.[5]The Hearing Officer inquired of the Respondent as to the valuation of the property for 2010.Order was issued to permit Complainant to object to the Hearing Officer taking official notice that the Assessor had valued the new construction and improvement for 2010 at $14,170.Complainant did not object.Therefore the 2010 true value in money would be $195,530.
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.[6]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[7]The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, 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.[8]Complainant failed to present substantial and persuasive evidence to establish the value proffered of $150,000 for 2009 or $170,000 for 2010.Therefore the presumption of correct assessment was not rebutted.
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.[9]True value in money is defined in terms of value in exchange and not value in use.[10]It is the fair market value of the subject property on the valuation date.[11]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.[12]
Respondent’s Appraiser utilized the Standard for Valuation in her appraisal report.[13]
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.[14]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.[15] Complainant failed to present an approach to value to support his opinion of value.Respondent’s appraiser developed indicated values under both the cost and sales comparison approaches.
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 on January 1, 2009.[16]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.”[17]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[18]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.[19]
The owner of property is generally held competent to testify to its reasonable market value.[20]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[21]Mr. Rosner gave his opinion of value for 2009 to be $150,000 based on the general condition of the property.However, that opinion of value was not supported by any appraisal methodology recognized by the Commission.None of the exhibits tendered are sufficient individually or collectively to establish that as of January 1, 2009, that the subject property would have only sold for $150,000.There was no substantial and persuasive evidence to support the owner’s opinion of value.
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.”[22]In the present case, the only basis to conclude the value stated by the owner would be to rest on speculation, conjecture and surmise.Such cannot form the basis for finding the fair market value of any property.Complainant failed to meet his burden of proof.
Evidence of Increase in Value
In any case in St. Charles County where the assessor presents evidence which indicates a valuation higher than the value finally determined by the assessor or the value determined by the board of equalization, whichever is higher, for that assessment period, such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.[23]The Supreme Court of Missouri has recently interpreted Section 138.060.The Court stated:
“Section 138.060 prohibits an assessor from advocating for or presenting evidence advocating for a higher ‘valuation’ than the ‘value’ finally determined by the assessor. … . Because the legislature uses the singular terms ‘valuation’ and ‘value’ in the statute, however, it clearly was not referring to both true market value and assessed value.While the assessor establishes both true market value and assessed value, which are necessary components of a taxpayer’s assessment, as noted previously, the assessed value is the figure that is multiplied against the actual tax rate to determine the amount of tax a property owner is required to pay.The assessed value is the ‘value that is finally determined’ by the assessor for the assessment period and is the value that limits the assessor’s advocacy and evidence.Section 138.060.By restricting the assessor from advocating for a higher assessed valuation than that finally determined by the assessor for the relevant assessment period, the legislature prevents an assessor from putting a taxpayer at risk of being penalized with a higher assessment for challenging an assessor’s prior determination of the value of the taxpayer’s property.”[24]
Therefore, while the appraisal of Ms. Mesey provides substantial and persuasive evidence that as of January 1, 2009, the true value in money or fair market value of the Complainant’s property was $215,000, the assessed value cannot be raised above $34,460 for that year.[25]
Increase in Value for 2010 – New Construction and Improvement
Due to the construction of the detached garage in 2009, the valuation of the property must be increased to reflect this new construction and improvement during the odd numbered year.[26]The 2009 value of $181,360 is increased by $14,170 to reflect the increase in value attributable to the addition of the detached garage.The appraised value for 2010 is set at $195,530.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for St. Charles County for the subject tax day is AFFIRMED for tax year 2009; the assessed valuation is SET ASIDE for tax year 2010.
The assessed value for the subject property for tax year 2009 is set at $34,460.
The assessed value for the subject property for tax year 2010 is set at $37,150.
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 appeal is based will result in summary denial. [27]
Disputed Taxes
The Collector of St. Charles 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 May 5, 2010.
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 5thday of May, 2010, to:Frank Rosner, 10 Vicksburg Station, St. Charles, MO 63303, Complainant; Charissa Mayes, Assistant County Counselor, 100 North Third Street, Room 216, St. Charles, MO 63301, Attorney for Respondent; Scott Shipman, Assessor, 201 North Second, Room 247, St. Charles, MO 63301-2870; Ruth Miller, Registrar, 201 North Second Street, Room 529, St. Charles, MO 63301; Michelle McBride, Collector, 201 North Second Street, Room 134, St. Charles, MO 63301.
___________________________
Barbara Heller
Legal Coordinator
[3] Repair Bids: Generally, bids for needed repairs and work on deferred maintenance are received into evidence based upon the general exception to the hearsay rule that repair bids are more probative on the point for which they are offered than other evidence which the taxpayer can procure through reasonable efforts.It would not generally be practical for taxpayers to have to bring into an evidentiary hearing two or three contractors to testify as to the cost for needed repairs to a home.The Commission is not going to burden Complainants in that manner.Furthermore, the general interests of justice will best be served by admission of repair bids into evidence.
[7] 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).
[8] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[9] 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).
[10] 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).
[12] 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.
[14] 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).
[15] 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).
[17] 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).
[20] 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).
[21] 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).
[24] State ex rel. Ashby Road Partners, LLC et al v. STC and Muehlheausler, 297 SW3d 80, 87-88 (Mo 8/4/09),