Glaxo Smith Kline v. Mavis Thompson, License Collector City of St Louis

December 22nd, 2014

State Tax Commission of Missouri

GLAXO SMITH KLINE )
)
Complainant, )
)
v. ) Appeals Number 11-20565 & 13-29000
) (Tax years 2011 thru 2013)
MAVIS THOMPSON )
LICENSE COLLECTOR )
CITY OF ST. LOUIS, MISSOURI )
Respondent. )

 

ORDER AFFIRMING HEARING OFFICER DECISION

 

On December 22, 2014, Hearing Officer Maureen Monaghan issued her order setting aside the value placed upon the subject property by the St. Louis City Merchants’ and Manufacturers’ Tax Equalization Board, (sustaining the assessment made by the License Collector), and finding the correct assessed value to be $1,987,338 for tax year 2011; $1,902,394 for tax year 2012; and $2,493,186 for tax year 2013. Respondent appealed.

The parties agreed to the historical cost of the personal property.  The difference in value between the parties arises in the calculation of obsolescence to construction work in progress properties and the question of whether Section 137.115.3(6) granting a 25% assessment ratio to personal property in qualifying enterprise zones has been effectively repealed.

The parties stipulated that the property was located within a qualifying enterprise zone on the relevant tax days.

Standard Upon Review

A party subject to a Decision and Order of a hearing officer with the State Tax Commission may file an application requesting the case be reviewed by the Commission.  The Commission may then summarily allow or deny their request.  The Commission may affirm, modify, reverse or set aside the decision.  The Commission may take any additional evidence and conduct further hearings.

Issues

Respondent appealed raising the following issues:

  1. The Hearing Officer erred in her finding as to 65% Good on Construction in Progress as the Complainant failed to show this percentage equated to the actual true value in money of the subject property, a failure which the Hearing Officer expressly acknowledged, and as the License Collector of the City of St. Louis is not bound regarding percent good construction in progress by other state offices or jurisdictions.

 

  1. The Hearing Officer erred in finding that Complainant is entitled to a reduction in assessed value of certain property due to a former and defunct State Enterprise Zone statute which is no longer the law in the State of Missouri, a fact which the Hearing Officer concedes, at p. 9-10 of the Decision, but then fails to rule in accordance with.

 

DISCUSSION AND RULING

  1. The Hearing Officer erred in her finding as to 65% Good on Construction in Progress as the Complainant failed to show this percentage equated to the actual true value in money of the subject property, a failure which the Hearing Officer expressly acknowledged, and as the License Collector of the City of St. Louis is not bound regarding percent good construction in progress by other state offices or jurisdictions.

 

The machinery and equipment, which is the subject of this appeal, consists of a variety of machinery, tools, and appliances utilized by Complainant in its facility at 320 South Broadway, St. Louis, Missouri.  Complainant is a pharmaceutical manufacturer with an NAICS code of 32. Pharmaceutical manufacturers formerly had an SIC code of 28.  The City of St. Louis License Collector does not discount (apply an obsolescence factor) construction-in-progress property (CIP).   The City of St Louis Assessor discounts CIP at 65% good (35% obsolescence).  The Hearing Officer found that Complainant was not entitled to a reduction based upon true value of its CIP property but was entitled to a reduction based upon the discriminatory impact of the License Collector’s decision to assess at 100% of market value.  In short, the Hearing Officer found that Complainant was not required to show actual obsolescence if it could demonstrate a pattern and practice of differing treatment of other similarly situated property owners (discrimination).

Respondent argues that she is not bound by the assessment policies of the Assessor of the City of St. Louis, or any other taxing jurisdiction.  However, the Respondent is bound by the Constitution of Missouri.  It states, at Article X, Section 3:  “Taxes . . .shall be uniform upon the same class of subclass of subject within the territorial limits of the authority levying the tax . . .”  The test is not whether actual obsolescence was demonstrated, but rather, whether or not Complainant was treated differently than a statistically significant number of similarly situated taxpayers within the taxing jurisdiction.  The evidence was that the assessor for the City of St. Louis routinely allows a 35% obsolescence factor to work in progress.  The license collector of the same jurisdiction routinely rejects an obsolescence factor.  The Hearing Officer was correct in finding that “Complainant suffers from discrimination as to their CIP business personal property in that their property is taxed differently from other similarly classified property within the jurisdiction.”

 

  1. The Hearing Officer erred in finding that Complainant is entitled to a reduction in assessed value of certain property due to a former and defunct State Enterprise Zone statute which is no longer the law in the State of Missouri, a fact which the Hearing Officer concedes, at p. 9-10 of the Decision, but then fails to rule in accordance with.

 

No one argues that Missouri has a system allowing for Enterprise Zones.  Enterprise Zones were subsequently replaced with Enhanced Enterprise Zones.  Respondent incorrectly argues that the provisions of Section 137.115.3(6) granting a 25% assessment ratio to certain personal property located within a “state enterprise zone” can no longer be given effect because state enterprise zones were repealed in that the term “state enterprise zone” was not changed to “enhanced enterprise zone” in Section 137.115 when the law was changed; and, therefore, Section 137.115.3(6) was repealed by implication.  Further, Respondent argues that the Enhanced Enterprise Zones were never meant to allow reduced assessments on certain personal property.

The simple fact is that Section 137.115.3(6) RSMo. is still law.  That section is frequently amended by the legislature – most recently in 2013.  From this we can reasonably assume that the legislature was aware of the specific wording of Section 137.115.3(6) RSMo. and did not believe that said section required amending or deleting.

It is also reasonable to note that all enterprise zones are created by state statute and administered by the Director of the Department of Economic Development, a state agency.  Section 135.210, Section 135.250 RSMo.  All enterprise zones can be characterized as “state” zones.

Additionally, under Section 135.200(3), most recently amended in 2011, a qualifying “facility” is “any building used as a revenue-producing enterprise located within an enterprise zone, including the land on which the facility is located and all machinery, equipment and other real and depreciable tangible personal property acquired for use at and located at or within such facility and used in connection with the operation of such facility”.  Respondent’s argument that Section 137.115.3(6) must be repealed inasmuch as Enhanced Enterprise Zones do not include personal property, is not well taken.

When engaging in statutory construction, the primary purpose is to ascertain the legislature’s intent from the language used and to give effect to that intent if possible.  The Court must presume that the legislature intended the provisions of the statute to have effect.  “The construction of statutes is not to be hypertechnical, but instead is to be reasonable and logical and give meaning to the statutes.”  Lewis v. Gibbons, 80 S.W.3d 461.  Provisions of a legislative act must be construed together and all provisions must be harmonized.  Statutes in pari materia are to be consulted for the construction of each other though some of the statutes may have expired, or even been repealed, and whether they are referred to or not.  Chester Bross Const v. Missouri Department of Labor and Industrial Relations 11 S.W.3d 425 (Mo App ED 2003)

The interpretation of Section 137.115.3 RSMo. must be read and interpreted in a reasonable and logical manner to give meaning to the statute.  We reject Respondent’s contention that we are not required to enforce said statute.

Section 137.115.3(6) RSMo creates four requirements for personal property to be assessed at 25% rather than 33 1/3% of its true value in money.  The property must be:

  1. a. Used as pollution control equipment; or
  2. Used as tools and equipment used for retooling for the purpose of introducing new product lines or used for making improvements to existing products;
  3. Purchased after August 28, 1998;
  4. Located in an enterprise zone; and
  5. Used by a company identified by any standard industrial classification number cited in subsection 135.200(6), RSMo. [now an NAICS code found in subdivision (7)]

Complainant’s property met all criteria.

The Hearing Officer did not err in overruling the decision of the St. Louis City Merchants’ and Manufacturers’ Tax Equalization Board.  Respondent has failed to state any error warranting a change in the Hearing Officer’s value.

ORDER

The Decision and Order of the Hearing Officer, including the findings of fact and conclusions of law therein, is AFFIRMED and incorporated by reference, as if set out in full, in this final decision of the Commission.

Judicial review of this Order may be had in the manner provided in Sections 138.432 and 536.100 to 536.140, RSMo within thirty days of the mailing date set forth in the Certificate of Service for this Order.

If judicial review of this decision is made, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the courts unless disbursed pursuant to Section 139.031.8, RSMo.

If no judicial review is made within thirty days, this decision and order is deemed final and the Collector of  the City of St. Louis, as well as the collectors of all affected political subdivisions therein, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.

SO ORDERED this 28th day of April, 2015.

 

STATE TAX COMMISSION

 

Bruce E. Davis, Chairman

Randy Holman, Commissioner

Victor Callahan, Commissioner

 

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 30th day of April, 2015, to: Complainants(s) counsel and/or Complainant, the county Assessor and/or Counsel for Respondent and county Collector.

tcampbell@polsinelli.com

moakm@stlouis-mo.gov

zazae@stlouis-mo.gov

thompsonm@stlouis-mo.gov

phillipsa@stlouis-mo.gov

 

Jacklyn Wood

Legal Coordinator

State Tax Commission of Missouri

 

GLAXO SMITH KLINE ) Appeal No. 11-20565
) 13-29000
) (2011, 2012, 2013)
)
              Complainant )
)
v. )
)
MAVIS THOMPSON, LICENSE COLLECTOR )
CITY OF ST LOUIS, MISSOURI )

 

 

DECISION AND ORDER

HOLDING

Decision of the St. Louis City Merchants’ and Manufacturers’ Tax Equalization Board

sustaining the assessment made by the License Collector, SET ASIDE, Hearing Officer finds true value in money for the subject property           as follows:

YEAR ASSESSED VALUE
2011 $1,987,338
2012 $1,902,394
2013 $2,493,186

 

Complainant appeared by Counsel, Thomas Campbell, St. Louis, Missouri.

Respondent appeared by Counsel, Matthew Moak and Erika ZaZa, Associate City Counselors.

Case heard by Hearing Officer Maureen Monaghan.

ISSUE

The issue in this appeal is the true value in money and assessed value of Complainant’s machinery and equipment as of January 1, 2011, January 1, 2012, and January 1, 2013.  The parties stipulated to the true value for the Complainant’s personal property for years 2011, 2012 and 2013.  The parties stipulated to the historical cost for the personal property deemed to be “construction in progress” property in 2011, 2012 and 2013.  After stipulation of the values and costs, the remaining issues before the Hearing Officer were:

  1. The appropriate level of assessment;
  2. The true value of the personal property deemed to be construction in progress; and
  3. The application of penalties.

 

SUMMARY

Complainant appeals the subject machinery and equipment value set by the License Collector and reviewed by the St. Louis City Board of Merchants’ and Manufacturers’ Tax Equalization (Board).  The value set by the License Collector was as follows:

Year True Value Assessed Value
2011 $18,763,209 $6,254,403
2012 $10,230,106 $3,410,035
2013 $13,637,889 $4,545,963

 

The following exhibits were filed by the Complainant:

Exhibit Description
A STC Decision and Order (NPT) August 8, 2012
B 2011 Amended Property Declaration
C 2011 Amended Assessment Summary
D Enterprise Zone Map and Custodian Affidavit
E 2011 CIP Summary Sheet
F 2011 Additions and Retirements
G 2012 Amended Property Declarations
H 2012 Amended Assessment Sheets
I 2012 CIP Summary Sheet
J 2012 Additions and Retirements
K 2013 Amended Property Declarations
L 2013 Amended Assessment Summary
M 2013 CIP Summary Sheet
N 2013 Additions and Retirements
O Written Direct Testimony of Edward Moeller

 

The following exhibits were filed by the Respondent:

Exhibit Description
1 Letter dated 5/2/2011 to “Valued Business Owner”
2 Declaration 2011
3 Declaration 2011
4 License and Permit System Values and Payments showing file date of 6/30/11 and total paid of $25,513.10
5 Letter dated 5/11/2012 to Mr. Steve Levick from Board of Merchants’ and Manufacturers’ informing him that the Assessed Value as set forth in the 2011 Declaration is approved
6 2012 Declaration – “see attached” – dated June 28, 2012 – $3,489,773
7 Notice of Assessment Change.  Assessed value as filed by taxpayer for year 2011 $6,254,403 and Assessed value approved by the Board for tax year 2012 $7,818,004
8 2013 Declaration – signed 6/27/13 – “see attached”
9 Signed page 2 of Declaration dated 10/20/2013
10 Manufacturers’ Tax Bill dated 10/28/13 – approved assessed value $4,545,963 – no penalty assessed
Written Direct Testimony of Darius Chapman
11 Senate Bill 1155
12 Section 137.115 RSMo.
13 Chapter 135 RSMo
14 Letter dated 10/8/14 to Erika ZaZa from Kenneth Voss – Objection by the Complainant – Sustained
Written Direct Testimony of Shawn Ordway
Rebuttal Written Testimony of Darius Chapman
Written Rebuttal Testimony of Kenneth Voss

 

Complainant objected to Exhibit 14 and the Written Rebuttal Testimony of Kenneth Voss and such objections were sustained.

The appeals were consolidated and set for hearing.  On October 24, 2014, a prehearing conference was conducted.  The parties agreed to the true value of the personal property for tax years 2011, 2012 and 2013.  The parties agreed to the historical cost for the construction in progress for 2011, 2012 and 2013.  The parties agreed to the address and location of the business personal property and that said location was designated by ordinance as an enterprise zone.

FINDINGS OF FACT

  1. Jurisdiction over this appeal is proper.
  2. The machinery and equipment, which is the subject of this appeal, consists of a variety of machinery, tools, and appliances utilized by Complainant in its facility at 320 South Broadway, St. Louis, Missouri. Complainant is a pharmaceutical manufacturer with an NAICS code of 32; pharmaceutical manufacturers formerly had an SIC code of 28.
  3. The parties stipulated to the true values for the following properties in 2011:
Supplies $2,200
3 year recovery $272,650
5 year recovery $4,457,630
Seven year recovery $280,070
TOTAL $5,012,550

 

 

 

The parties agree that the construction in progress (CIP) historical costs for 2011 is $2,809,574.  The parties do not agree as to CIP’s true value (taxable value).

  1. The parties stipulated to the true values for the following properties in 2012:
Supplies $4,435
3 year recovery $327,680
5 year recovery $6,394,367
Seven year recovery $221,669
TOTAL $6,948,151

 

 

 

The parties agree that the construction in progress (CIP) historical costs for 2012 is $240,000.  The parties do not agree as to CIP’s true value (taxable value).

  1. The parties stipulated to the true values for the following properties in 2013:
Supplies $4,850
3 year recovery $605,715
5 year recovery $7,506,417
Seven year recovery $170,200
TOTAL $8,287,182

 

 

 

The parties agree that the construction in progress (CIP) historical costs for 2013 is $1,446,000.  The parties do not agree as to CIP’s true value (taxable value).

  1. The personal property subject to the appeals was located at 320 South Broadway, St. Louis, Missouri in 2011, 2012 and 2013.
  2. 320 South Broadway is located within the designated boundaries of the enterprise zone of the City of St. Louis pursuant to City of St. Louis Ordinance.
  3. The Complainant purchased equipment used for retooling for the purpose of introducing new product lines or improving existing products in the following amounts:
Tax Year CIP – Historical Cost
2011 $2,809,574
2012 $240,000
2013 $1,446,000

 

  1. Personal property under construction is not “placed in service” as defined in Section 137.122 RSMo.
  2. The City of St. Louis License Collector does not discount (apply an obsolescence factor) construction-in-progress property (CIP).   The City of St Louis Assessor discounts CIP at 65% good (35% obsolescence).
  3. The Complainant filed an asset listing with the City License Collector on June 30, 2011, June 28, 2012 and June 27, 2013.

CONCLUSIONS OF LAW

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.  By statute, real and tangible personal property are assessed at set percentages of true value in money. Section 137.115.5, RSMo.

Burden of Proof

There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.  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).  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 fair market value should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

Assessment Ratio

Tangible personal property is valued at market value and classified annually. § 137.115.1, RSMo. The assessment level for a class or subclass of property is a statutorily fixed percentage of its market value. The assessed value is derived by multiplying the market value times the assessment level, i.e., the percentage of market value for that class or subclass of property. Generally, tangible personal property is assessed at 33 1/3 percent of its true value in money.      § 137.115.1, RSMo. The exceptions, followed by their respective assessment levels, are: grain in an unmanufactured condition, one-half of one percent; livestock, 12 percent; farm machinery, 12 percent; historic motor vehicles, 5 percent; aircraft that are home built from a kit, 5 percent;  noncommercial aircraft that are at least twenty-five years old and fly less than fifty hours per year, 5 percent; pollution control equipment, 25 percent; and  state enterprise zone retooling equipment for new or improved products, 25 percent.  § 137.115.3.

 

  • 137.115.3(6) states:

 

“Tools and equipment used for pollution control and tools and equipment used in retooling for the purpose of introducing new product lines or used for making improvements to existing products by any company which is located in a state enterprise zone and which is identified by any standard industrial classification number cited in subdivision (6) of section 135.200 , twenty-five percent.”

The subsection references “standard industrial classification number.”  Standard industrial classification numbers (SIC) were developed by the federal government and used by the U.S. Office of Management and Budget (OMB) as well as many other U.S. agencies. In 1997, OMB adopted North American Industrial Classification System (NAICS) as its new industry classification system.  Both SIC and NAICS codes identify a firm’s primary business activity. SIC code assignments were discontinued in November 2004 and the government began only assigning NAICS codes.

  • 135.200 RSMo. referenced in §137.115.3(6) has been amended. Subdivision (6) of §135.200 RSMo is now (7).  The subdivision also references NAICS codes rather than the SIC equivalent.  Manufacturing activities that were classified as SICs 20 through 39 (as referenced in Section 135.200 RSMo) are now coded NAICS 31 through 33 (as referenced in Section 135.200 RSMo).  Pharmaceutical manufactures formerly coded SIC 28 are now coded NAICS 32 – which is referenced in subdivision (7) of §135.200 RSMo.

When engaging in statutory construction, the primary purpose is to ascertain the legislature’s intent from the language used and to give effect to that intent if possible.  The Court must presume that the legislature intended the provisions of the statute to have effect.  “The construction of statutes is not to be hypertechnical, but instead is to be reasonable and logical and give meaning to the statutes.”  Lewis v. Gibbons, 80 S.W.3d 461.  Provisions of a legislative act must be construed together and all provisions must be harmonized.  Statutes in pari materia are to be consulted for the construction of each other though some of the statutes may have expired, or even been repealed, and whether they are referred to or not.  Chester Bross Const v. Missouri Department of Labor and Industrial Relations 11 S.W.3d 425 (Mo App ED 2003)

The interpretation of Section 137.115.3 RSMo, in particular subsection (6) that references §135.200 (6), must be read and interpreted in a reasonable and logical manner to give meaning to the statute.  The referenced SIC referred to in the statute were moved to the subsection below (subsection 7) and that subsection was updated to reflect the NAICS which was adopted by the government agency formerly issuing the SIC.  Both subsections included the number assigned to the pharmaceutical manufacturers.

Section 137.115.3(6) RSMo creates four requirements for personal property to be assessed at 25% rather than 33 1/3% of its true value in money.  The property must be:

  1. a. Used as pollution control equipment; or
  2. Used as tools and equipment used for retooling for the purpose of introducing new product lines or used for making improvements to existing products; and
  3. Purchased after August 28, 1998;
  4. Located in an enterprise zone; and
  5. Used by a company identified by any standard industrial classification number cited in subsection 135.200(6), RSMo. [now an NAICS code found in subdivision (7)]

 

The witness testified that the tools and equipment are used for retooling to introduce new product lines and to make improvements to existing products.  The property was purchased after August 28, 1998.  The property has a tax situs located in an enterprise zone.  The Complainant is identified by SIC 28 or updated NAICS code 32 which is found in § 135.200 RSMo.

Notably in this statute (§137.115.3) is that there is no requirement that the twenty-five percent assessment level applies only to companies whose real property qualifies for an abatement under the enterprise zone program set forth in Chapter 135 or participates in one of the economic development programs.    Although all the economic programs cited by the parties – Enterprise Zone, Enhanced Enterprise Zone and Missouri Works – recognize prior economic programs and provide for the sunset of their predecessor programs, it appears that it may be irrelevant as it is not a statutory requirement.

The following assessed values have been proven by substantial and persuasive evidence:

 

Tax Year 2011
Recovery Period True Value Assessed Value
3 year EZ $172,200 $43,050
5 year EZ $3,330,000 $832,500
EZ Computer $4,830 $1,208

 

Tax Year 2012
Recovery Period True Value Assessed Value
3 year EZ $248,900 $62,225
5 year EZ $5,335,000 $1,333,750
Computer $3,977 $994

 

Tax Year 2013
Recovery Period True Value Assessed Value
3 year EZ $530,610 $132,653
5 year EZ $5,335,000 $1,333,750
Computer $3,214 $804

 

Construction in Progress

Section 137.122 RSMo does not address or include construction in progress (CIP).   However, CIP is not exempt as argued by Complainant. Section 137.122 RSMo sets forth a methodology for valuation of business personal property and such value is presumed to be correct.  Other personal property such as motor vehicles and CIP are excluded from that approach to value.

Complainant argues that other jurisdictions use a fraction of the historic costs or discount CIP 100%.  Complainant’s proposition may be true.  However, the property is taxable and any cost approach to value would require the “discount” to represent some obsolescence as determined by the assessor.  The discount or obsolescence factor may be a standard figure applied to all CIP as part of their mass appraisal. In this appeal, there was no testimony of how valuations were calculated or any calculations as to the appropriate obsolescence factor to be applied.

Although, the valuation (cost minus depreciation/obsolescence) has not been proven, the Hearing Officer is concerned with the lack of uniformity and equity within the City of St. Louis.  The Assessor in the City of St. Louis applies a factor of 65% good (or 35% obsolescence) to CIP business personal property as evidenced by their declaration form.  The License Collector in the City of St. Louis does not apply a factor for the same class of properties – business personal property, construction in progress.

Section 137.490 RSMo provides:

“1. The assessor, or his deputies under his direction, shall assess all … tangible personal property ….and for that purpose the assessor may divide and assign the work or any of it among them. ….The assessor shall see that the assessment is made uniform and equal throughout the city….” (emphasis added)

 

The uniformity and equity mandated by statute (as well as Constitution and caselaw) is absent.  The purpose of the equal protection clause of the 14th Amendment is to secure every person against discrimination whether it be through intentional violations of the statute or by improper execution of a statute.  If a jurisdiction cannot both secure the standard of true value and uniformly and equitably assess property for taxing purposes, “the latter requirement is to be preferred as just and ultimate purpose of law.” A taxpayer whose property is taxed differently from other property within a jurisdiction has the right to have his assessment reduced to the percentage of that value at which the others are taxed. Sioux City Bridge v. Dakota County, 260 U.S. 441 (U.S. S.Ct. 1923)

The Complainant is entitled to a reduction in value on the CIP not based upon substantial and persuasive evidence as to the true value of the property but as to discrimination.  Complainant suffers from discrimination as to their CIP business personal property in that their property is taxed differently from other similarly classified property within the jurisdiction. The resulting true values are:

Tax Year CIP – Historical Cost True Value
2011 $2,809,574 $1,826,223.10
2012 $240,000 $156,000.00
2013 $1,446,000 $939,900.00

 

The property is assessed at 33 1/3% as it still under construction and not in use for pollution control or introducing new product lines.

Penalty

Respondent has proposed that the Hearing Officer apply a penalty to the assessment claiming that Complainant failed to file properly in 2011, 2012 and 2013.  Respondent initially proposed a penalty of a 25% increase in the assessed value.  The Respondent is now proposing a 10% increase in the assessed value as set forth in Section 137.505 RSMo.

Complainant is a manufacturer.  Section 150.350 RSMo  gives the license collector of the city of St. Louis the authority to perform the duties of the set forth in Sections 150.300 to 150.370 RSMo. The license collector is required, at least once each year prior to the first Monday in May, to visit and inspect each manufacturer for the purpose of verifying information on the statement made by the manufacturer under Section 150.320. (Section 150.325 RSMo).  Section 150.320 was repealed in 1987.  However, it can be assumed that reporting in some form all of the personal property as of January 1 of the tax year is required of the manufacturer. Property declarations, under Section 150.350.3 RSMo must be filed by manufacturers with the license collector on or before July first of each year. However, no penalty provision is contained within the statute.

Complainant filed a declaration in June of each year.  The collector did not assess a penalty in 2011, 2012 or 2013.  Since the license collector did not apply the penalty at the time of the assessment and billing and since Chapter 150 does not provide for a penalty, the Hearing Officer declines to entertain doing so.

ORDER

The assessed valuation for the subject property as determined by the Merchants’ and Manufacturers’ Tax Equalization Board for St. Louis City for the subject tax day is SET ASIDE.  The values are set as follows:

2011
True Value Assessment level Assessed Value
EZ 3 year recovery $172,200 25% $43,050
3 year recovery $100,450 33 1/3% $33,483
EZ 5 year recovery $3,330,000 25% $832,500
5 year Recovery $1,099,000 33 1/3% $366,333
EZ Computer $4,830 25% $1,208
Computer $23,800 33 1/3% $7,933
Supplies $2,200 33 1/3% $733
7 year recovery $280,070 33 1/3% $93,357
CIP $1,826,223.10 33 1/3% $608,741
Total $1,987,338

 

2012
True Value Assessment level Assessed Value
EZ 3 year recovery $248,900 25% $62,225
3 year recovery $78,780 33.33% $26,260
EZ 5 year recovery $5,335,000 25% $1,333,750
5 year Recovery $1,037,380 33.33% $345,793
EZ Computer $3,977 25% $994
Computer $18,010 33.33% $6,003
Supplies $4,435 33.33% $1,478
7 year recovery $221,669 33.33% $73,890
CIP $156,000 33.33% $52,000
Total $1,902,394

 

2013
True Value Assessment level Assessed Value
EZ 3 year recovery $530,610 25% $132,653
3 year recovery $75,105 33.33% $25,035
EZ 5 year recovery $6,456,300 25% $1,614,075
5 year Recovery $1,034,058 33.33% $344,686
EZ Computer $3,214 25% $804
Computer $12,845 33.33% $4,282
Supplies $4,850 33.33% $1,617
7 year recovery $170,200 33.33% $56,733
CIP $939,900 33.33% $313,300
Total $2,493,184

 

A party may file with the Commission an application for review of this decision within thirty (30) days of the mailing of such decision.  The application shall contain specific grounds upon which it is claimed the decision is erroneous.  Failure to state specific facts or law upon which the appeal is based will result in summary denial.  Section 138.432, RSMo 1994.

 

If an application for review of this decision is made to the Commission, any protested taxes presently in an escrow account in accordance with this appeal shall be held pending the final decision of the Commission.  If no application for review is received by the Commission within thirty (30) days, this decision and order is deemed final and the License Collector of St. Louis City, shall disburse the protested taxes presently in an escrow account in accord with the decision on the underlying assessment in this appeal.  If any or all protested taxes have been disbursed pursuant to Section 139.031(8), RSMo, either party may apply to the circuit court having jurisdiction of the cause for disposition of the protested taxes held by the taxing authority.

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: December 22, 2014.

 

STATE TAX COMMISSION OF MISSOURI

 

Maureen Monaghan

Hearing Officer

 

 Certificate of Service

 

I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 22nd day of December, 2014, to: Thomas Campbell, 100 South Fourth Street, Suite 1000, St. Louis, MO 63102; Matthew Moak and Erika ZaZa, Associate City Counselors, 314 City Hall, St. Louis, MO 63101, Attorney for Respondent; Mavis Thompson, License Collector, 102 City Hall, St. Louis, MO 63103.

 

Jacklyn Wood

Legal Coordinator