STATE TAX COMMISSION OF MISSOURI
| FRED WEBER, INC. | ) | |
| ) | ||
| Complainant | ) | |
| ) | ||
| v. | ) | Appeal No. 16-81000 |
| ) | (Account 01-0296) | |
| THOMAS RUHL, ASSESSOR | ) | |
| RALLS COUNTY, MISSOURI, | ) | |
| ) | ||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by the Board of Equalization of Ralls County (BOE) is SET ASIDE. Assessed value in money for the subject properties for tax years 2016 is set at $519,452, personal property. The parties agreed to submit the appeal on the record with primary briefs. An Order was issued regarding such. Both parties timely submitted briefs.
Fred Weber, Inc. (Complainant) was represented by attorney Patrick Keefe.
Respondent Thomas Ruhl, Assessor of Ralls County, represented himself.
Appeal decided by Senior Hearing Officer John Treu.
ISSUE
Complainant appealed on the grounds of overvaluation, discrimination, and misapplication of Section 137.122 RSMo. The BOE set the true value in money (TVM) of the property at $2,745,420 in 2016. The Commission takes this appeal to determine the TVM in money of the subject property on January 1, 2016.
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. Complainant timely appealed to the State Tax Commission (STC).
- Evidentiary Hearing. The parties submitted this appeal on the record.
- Identification of Subject Property. The subject property is identified by account number 01-0296 and is business personal property of Complainant, in Ralls County, Missouri.
- Description of Subject Property. The subject property consists of large vehicles and assorted large equipment. Such type property is used in mining operations, cement production, and construction. Continental Cement Company, LLC (Continental) has an underground limestone mine in Hannibal, Ralls County, Missouri. The mine is used for the production of cement. In 2012, Continental needed an access slope and ventilation loop for the underground mine. Complainant acting by and through Bluff City Minerals, LLC was hired to excavate and construct the slope and loop for mining. Complainant’s personal property was used for excavation and construction of the slope and loop until April 2014. Beginning on April 21, 2014, some of the personal property was used in the mining process, but not in cement production.
- Board of Equalization. The BOE set a TVM of $2,745,420 in 2016.
- Complainant’s Evidence.
| Exhibit | Description |
| A | Agreement between Continental and Complainant 2012 |
| B | Complainant Account Statement from Assessor |
| C | Internal Revenue Service Publication 946 |
| D | COMPLAINANT Property Valuation Summary (7 Year) |
| E | Mobile ANFO Photographs |
| F | Caterpillar 262C Manufacturer’s Documents |
| G | Caterpillar 988H Loader Manufacturer’s Documents |
| H | Caterpillar 740 Manufacturer’s Documents |
| I | Oldenburg ANFO Rig Manufacturer’s Documents |
| J | Oldenburg DPH 2 Boom Drill Manufacturer’s Documents |
| K | Oldenburg Cannon Drill Manufacturer’s Documents |
| L | Gradall Mine Scaler XL 4100 Manufacturer’s Documents |
| M | Ralls County, MO Business Personal Property Declaration Form |
| N | COMPLAINANT BOE Appeal Form |
| O | BOE Decision |
| P | Written Direct Testimony (WDT) of Jill Rensing |
| Q | Written Direct Testimony of Roger Gagliano |
Complainant only disputes the valuation of property placed in service on or after January 2, 2006.
- Respondent’s Evidence.
| Exhibit | Description |
| WDT | Thomas Ruhl |
| 1 | Hot Line Construction Equipment Guide 2016, MiniFinalDrives.com Documents & Various Internet Documents |
| 2 | Section 137.115 RSMo |
| 3 | MACRS vs. Hot Line Comparison Sheet |
| 4 | Commercial Personal Property Reporting Sheet |
- Stipulation of the Parties. After briefing, the parties filed the following 2016 Joint Summary Spreadsheet listing the property belonging to Complainant. The property was separated into undisputed assessed valuation and disputed assessed valuation.
| Acquisition Date | Description | Disputed/Undisputed | Agreed Upon Assessed Value (AV) | |||
| 2003 | 03 Cat 773 End Dump | Undisputed | $123,070 | |||
| 2003 | 03 Tamrock Pantera 900 Drill | Undisputed | $42,120 | |||
| 1996 | 95 Cat 988F Wheel Loader | Undisputed | $54,260 | |||
| Subtotal: | $219,450 | |||||
| Acquisition Date | Description | Disputed/Undisputed | Agreed Upon AV | |||
| 2008 | 2008 Ford Truck | Undisputed | $2,330 | |||
| 2007 | 2007 Ford Truck | Undisputed | $5,850 | |||
| 2006 | 2006 Ford Truck | Undisputed | $5,360 | |||
| 2000 | 2000 Ford Truck | Undisputed | $2,550 | |||
| 1971 | 1971 Stoughton Trailer | Undisputed | $100 | |||
| 1998 | 1998 Ford Truck | Undisputed | $1,750 | |||
| 1995 | 1995 Freightliner | Undisputed | $100 | |||
| Subtotal: | $18,040 | |||||
| Acquisition Date | Description | Disputed/Undisputed | Assessor’s AV | Taxpayer’s AV | Taxpayer’s Depreciation Factor | Acquisition Cost |
| 2015 | 96″ Deutz Diesel Mine Vent Fan | Disputed | $9,750 | $10,179 | 0.8929 | $34,200 |
| 2015 | Mobile Anfo Carrier | Disputed | $31,630 | $15,609 | 0.8929 | $52,445 |
| 2014 | UG Radio Communication | Disputed | $3,780 | $4,813 | 0.7016 | $20,582 |
| 2014 | Welder | Disputed | $1,420 | $1,802 | 0.7016 | $7,705 |
| 2014 | Shark Electric Hot Press | Disputed | $840 | $1,067 | 0.7016 | $4,563 |
| 2014 | Grease Pump | Disputed | $210 | $272 | 0.7016 | $1,161 |
| 2013 | Grindex Sludge Pump | Disputed | $1,690 | $1,345 | 0.5513 | $7,317 |
| 2013 | Personnel Basket | Disputed | $1,190 | $947 | 0.5513 | $5,155 |
| 2013 | 72″ 200 HP Fan | Disputed | $15,700 | $12,496 | 0.5513 | $68,000 |
| 2013 | Ventilated Lockers | Disputed | $1,900 | $1,515 | 0.5513 | $8,245 |
| 2013 | 12″ Hardwood Benches | Disputed | $170 | $222 | 0.5513 | $1,208 |
| 2013 | Television | Disputed | $100 | $99 | 0.5513 | $541 |
| 2013 | Camera | Disputed | $100 | $126 | 0.5513 | $684 |
| 2013 | 11 Cat 262C Skid Steer Loader | Disputed | $11,230 | $3,908 | 0.5513 | $21,268 |
| 2012 | 2012 Cat 988H Wheel Loader | Disputed | $189,730 | $105,204 | 0.4288 | $736,032 |
| 2011 | 07 Cat 740 Articulator Truck | Disputed | $92,000 | $28,953 | 0.3063 | $283,579 |
| 2011 | 07 Oldenburg Anfo Rig | Disputed | $32,800 | $20,773 | 0.3063 | $203,459 |
| 2011 | 07 Oldenbur[g] DPH 2 Boom Drill | Disputed | $125,870 | $35,999 | 0.3063 | $352,590 |
| 2010 | 07 Cat XQ30 Diesel Gen Set | Disputed | $1,920 | $703 | 0.1838 | $11,471 |
| 2009 | 09 Cat 733 F End Dump | Disputed | $88,910 | $3,341 | 0.1000 | $100,242 |
| 2008 | 72″ Diesel Powered Fan | Disputed | $5,500 | $1,432 | 0.1000 | $42,974 |
| 2007 | 07 Amida 4000 Light Tower | Disputed | $990 | $305 | 0.1000 | $9,164 |
| 2007 | 01 Cat 966G Wheel Loader | Disputed | $25,780 | $7,018 | 0.1000 | $210,535 |
| 2007 | 07 Gradall Mine Scaler | Disputed | $27,910 | $23,613 | 0.1000 | $708,398 |
| 2001 | Pump-2″ BJM R1500 | Disputed | $100 | $25 | 0.1000 | $752 |
| 1988 | 88 Miller Big 40 Welder | Disputed | $196 | $196 | 0.1000 | $5,876 |
| Subtotal: | $671,810 | $281,962 | ||||
| Assessor’s AV for all Disputed and Undisputed Property | Taxpayer’s AV for all Disputed and Undisputed Property | |||||
| Grand Total: | $909,300 | $519,452 |
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, including the application of any abatement. The Hearing Officer shall issue a decision and order affirming, modifying or reversing the determination of the BOE, 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 (2000) as amended.
Issuance of Decision Absent Evidentiary Hearing
The Hearing Officer, after affording the parties reasonable opportunity for fair hearing, shall issue a decision and order affirming, modifying or reversing the determination of BOE, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). Both parties agreed to submit this appeal upon the record. The filing of exhibits and WDT establishes the basis upon which opportunity for an evidentiary hearing can be held. The Complainant has the burden to present substantial and persuasive evidence. The Hearing Officer considered all the exhibits and WDT and then proceeded to ascertain if said exhibits and WDT met the standard of substantial and persuasive evidence to establish the market value of the property.
Official and Judicial Notice
Agencies shall take official notice of all matters of which the courts take judicial notice. Section 536.070(6), RSMo. Courts will take judicial notice of their own records in the same cases. State ex rel. Horton v. Bourke, 129 S.W.2d 866, 869 (1939); Barth v. Kansas City Elevated Railway Company, 44 S.W. 788, 781 (1898). In addition, courts may take judicial notice of records in earlier cases when justice requires or when it is necessary for a full understanding of the instant appeal. Burton v. Moulder, 245 S.W.2d 844, 846 (Mo. 1952); Knorp v. Thompson, 175 S.W.2d 889, 894 (1943); Bushman v. Barlow, 15 S.W.2d 329, 332 (Mo. banc 1929); State ex rel St. Louis Public Service Company v. Public Service Commission, 291 S.W.2d 95, 97 (Mo. banc 1956). Courts may take judicial notice of their own records in prior proceedings involving the same parties and basically the same facts. In re Murphy, 732 S.W.2d 895, 902 (Mo. banc 1987); State v. Gilmore, 681 S.W.2d 934, 940 (Mo. banc 1984); State v. Keeble, 399 S.W.2d 118, 122 (Mo. 1966).
In the present appeal, the Hearing Officer takes official notice of the Order of the STC and the Decision of the Hearing Officer in appeals 14-81001 and 15-81000. The same issues in the present appeal, same arguments made by Respondent regarding the issue in the present appeal, basic facts, and parties were involved in both appeals 14-81001 and 15-81000 and in the present appeal. Respondent’s arguments regarding the same issue in the present appeal, presented in appeals 14-81001 and 15-81000, were rejected by the Hearing Officer and the STC.
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 TVM for the property under appeal. By statute, real property and tangible personal property are assessed at set percentages of TVM: residential property at 19%; commercial property at 32%; agricultural property at 12%; and personal property at 33 1/3%. Section 137.115.5 RSMo.
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining TVM and 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).
Complainant’s Burden of Proof
A presumption exists that the assessed value fixed by the BOE is correct. Cohen v. Bushmeyer, 251 S.W.3d 345, (Mo. App. E.D., March 25, 2008); Hermel, Inc. v. STC, 564 S.W.2d 888, 895 (Mo. banc 1978) “Substantial and persuasive controverting evidence is required to rebut the presumption, with the burden of proof resting on the taxpayer.” Cohen, 251 S.W.3d at 348. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp. v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959). Persuasive evidence is evidence that has sufficient weight and probative value to convince the trier of fact. Cupples Hesse Corp., 329 S.W.2d at 702. The persuasiveness of evidence does not depend on the quantity or amount thereof but on its effect in inducing belief. Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975). See also, Westwood Partnership v. Gogarty, 103 S.W.3d 152 (Mo. App. E.D. 2003);
Methods of Valuation
Section 137.122 RSMo provides a statutory standardized methodology for valuing business personal property. Said section applies to business personal property placed in service on or after January 2, 2006. A property is “placed in service” when it is ready and available for a specific use, whether or not actually in use. The methodology presented by Section 137.122 RSMo is a cost approach to value, with more than straight line (normal) depreciation. The statute requires the use of the federal Modified Accelerated Cost Recovery System (MACRS) life tables to determine the appropriate “class life” of depreciable tangible personal property used in a trade or business or for production of income “to establish uniformity in the assessment of depreciable tangible personal property….” Once the assessor determines the appropriate class life and recovery period, the assessor references the depreciation schedule as set forth in Section 137.122 RSMo for application to the original cost of the property.
| YEAR | 3 YR % | 5 YR % | 7 YR % | 10 YR % | 15 YR % | 20 YR % |
| 1 | 75.00 | 85.00 | 89.29 | 92.50 | 95.00 | 96.25 |
| 2 | 37.50 | 59.50 | 70.16 | 78.62 | 85.50 | 89.03 |
| 3 | 12.50 | 41.65 | 55.13 | 66.83 | 76.95 | 82.35 |
| 4 | 5.00 | 24.99 | 42.88 | 56.81 | 69.25 | 76.18 |
| 5 | 5.00 | 10.00 | 30.63 | 48.07 | 62.32 | 70.46 |
| 6 | 5.00 | 10.00 | 18.38 | 39.33 | 56.09 | 65.18 |
| 7 | 5.00 | 10.00 | 10.00 | 30.59 | 50.19 | 60.29 |
| 8 | 5.00 | 10.00 | 10.00 | 21.85 | 44.29 | 55.77 |
| 9 | 5.00 | 10.00 | 10.00 | 15.00 | 38.38 | 51.31 |
| 10 | 5.00 | 10.00 | 10.00 | 15.00 | 32.48 | 46.85 |
| 11 | 5.00 | 10.00 | 10.00 | 15.00 | 26.57 | 42.38 |
| 12 | 5.00 | 10.00 | 10.00 | 15.00 | 20.67 | 37.92 |
| 13 | 5.00 | 10.00 | 10.00 | 15.00 | 15.00 | 33.46 |
| 14 | 5.00 | 10.00 | 10.00 | 15.00 | 15.00 | 29.00 |
| 15 | 5.00 | 10.00 | 10.00 | 15.00 | 15.00 | 24.54 |
| 16 | 5.00 | 10.00 | 10.00 | 15.00 | 15.00 | 20.08 |
| 17 + | 5.00 | 10.00 | 10.00 | 15.00 | 15.00 | 20.00 |
For property placed in service on or after January 2, 2006, valuation under Section 137.122 RSMo is presumed to be correct but can be “. . . disproved by substantial and persuasive evidence of the [TVM] under any method determined by the [STC] to be correct . . .”
The property subject to this appeal may be used in construction, mining, or cement production. Construction personal property is in Asset Class 15.0 with 5 year recovery period. IRS publication 946 describes them as “assets used in construction by general building, special trade, heavy and marine construction contractors, operative and investment builders, real estate subdividers and developers, and others except railroads.” Mining personal property is in Asset Class 10.0 with 7 year recovery period. IRS publication 946 describes them as “assets used in the mining and quarrying of metallic and nonmetallic minerals (including sand, gravel, stone and glass) and the milling, beneficiation, and other primary preparation of such materials. Manufacture of Cement is in Asset Class 32.2 with a 15 year recovery period. IRS publication 946 describes them as “assets used in the production of cement, but does not include assets used in the manufacture of concrete or concrete products nor in any mining or extraction process.”
Complainant argued that the personal property was mining property in 2016. The Assessor advocated that the property was used in cement production. The personal property subject to this appeal was used in mining limestone. Access slopes and loops are part of the mining process. The use of the limestone once excavated does not drive the determination of the asset class. The personal property is in Asset Class 10.0 with 7 year recovery period according to the IRS publication 946. For the property placed in service on or after January 2, 2006, this methodology is presumed to be correct. Complainant presented substantial and persuasive evidence to rebut this presumption. The personal property placed in service on or after January 2, 2006 should be valued using the 7 year class life for mining property and applying the depreciation found in the depreciation table in Section 137.122 RSMo to the original costs.
Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainants must (1) prove the TVM of their property on the tax date; 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). 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 and 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 it failed to present substantial and persuasive evidence that there was 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 or that the difference in the assessment ratio of the subject property and the average assessment ratio in the county is grossly excessive.
ORDER
The valuations of the BOE are SET ASIDE. Assessed value in money for the subject personal property for tax years 2016 is set at $519,452 total. The value determinations are based upon (1) the agreed assessed values, and (2) the application of Section 137.122 RSMo methodology as applied to mining personal property placed in service on or after January 2, 2006, as Complainant presented substantial and persuasive evidence contrary to the BOE TVM of the property as of January 1, 2016.
AV – 2016
| Description | Assessed Value |
| 03 Cat 773 End Dump | $123,070 |
| 03 Tamrock Pantera 900 Drill | $42,120 |
| 95 Cat 988F Wheel Loader | $54,260 |
| 2008 Ford Truck | $2,330 |
| 2007 Ford Truck | $5,850 |
| 2006 Ford Truck | $5,360 |
| 2000 Ford Truck | $2,550 |
| 1971 Stoughton Trailer | $100 |
| 1998 Ford Truck | $1,750 |
| 1995 Freightliner | $100 |
| 96″ Deutz Diesel Mine Vent Fan | $10,179 |
| Mobile Anfo Carrier | $15,609 |
| UG Radio Communication | $4,813 |
| Welder | $1,802 |
| Shark Electric Hot Press | $1,067 |
| Grease Pump | $272 |
| Grindex Sludge Pump | $1,345 |
| Personnel Basket | $947 |
| 72″ 200 HP Fan | $12,496 |
| Ventilated Lockers | $1,515 |
| 12″ Hardwood Benches | $222 |
| Television | $99 |
| Camera | $126 |
| 11 Cat 262C Skid Steer Loader | $3,908 |
| 2012 Cat 988H Wheel Loader | $105,204 |
| 07 Cat 740 Articulator Truck | $28,953 |
| 07 Oldenburg Anfo Rig | $20,773 |
| 07 Oldenburg DPH 2 Boom Drill | $35,999 |
| 07 Cat XQ30 Diesel Gen Set | $703 |
| 09 Cat 733 F End Dump | $3,341 |
| 72″ Diesel Powered Fan | $1,432 |
| 07 Amida 4000 Light Tower | $305 |
| 01 Cat 966G Wheel Loader | $7,018 |
| 07 Gradall Mine Scaler | $23,613 |
| Pump-2″ BJM R1500 | $25 |
| 88 Miller Big 40 Welder | $196 |
| TOTAL | $519,452 |
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 Ralls 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 September 7, 2017.
STATE TAX COMMISSION OF MISSOURI
John Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 7th day of September, 2017, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood, Legal Coordinator