State Tax Commission of Missouri
GREGORY P. SCHREFFLER,)
TAMARA WALTON,)
)
Complainants,)
)
v.)Appeal No.11-80507
)
PAUL L. ROUSE, ASSESSOR,)
PUTNAM COUNTY, MISSOURI,)
)
Respondent.)
ORDER
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On May 21, 2012, Senior Hearing W. B. Tichenor entered his Decision and Order (Decision) affirming the assessment by the Respondent.
Complainants filed their Application for Review of the Decision.[1]
CONCLUSIONS OF LAW
Standard Upon Review
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.[2]
The Hearing Officer as the trier of fact may consider the testimony of witnesses and give it as much weight and credit as she may deem it entitled to when viewed in connection with all other circumstances.The Hearing Officer is not bound by the opinions of witnesses who testify on the issue of reasonable value, but may believe all or none of the testimony and accept it in part or reject it in part.[3]
The Commission will not lightly interfere with the Hearing Officer’s Decision and substitute its judgment on the credibility of witnesses and weight to be given the evidence for that of the Hearing Officer as the trier of fact.[4]
DECISION
Complainants allege no error of fact or of law by the Hearing Officer.The Hearing Officer’s decision was to the valuation for the residential portion of their property.The Complainants, as their application for review, submitted an original listing for 53 acres of land.The Application for Review is essentially an attempt at allocation of the sales price to the land and the improvements. The information was provided at the close of the evidence and the allocation by the Complainant’s is not a methodology approved or recognized by the State Tax Commission.
A review of the record in the present appeal provides support for the determinations made by the Hearing Officer.There is competent and substantial evidence to establish a sufficient foundation for the Decision of the Hearing Officer.A reasonable mind could have conscientiously reached the same result based on a review of the entire record. The Commission finds no basis to support a determination that the Hearing Officer acted in an arbitrary or capricious manner or abused her discretion as the trier of fact and concluder of law in this appeal.[5]
The Hearing Officer did not err in his determination on the issue of fair market value of the subject property.
ORDER
The Commission upon review of the record and Decision in this appeal, finds no grounds upon which the Decision of the Hearing Officer should be reversed or modified.Accordingly, the Decision is affirmed.The Decision and Order of the hearing officer, including the findings of fact and conclusions of law therein, is 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 Putnam County, 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 August 8, 2012.
STATE TAX COMMISSION OF MISSOURI
Bruce E. Davis, Chairman
Randy B. Holman, Commissioner
DECISION AND ORDER
HOLDING
Assessment made by the Assessor is AFFIRMED.Complainants failed to present substantial and persuasive evidence to establish the true value in money of the property under appeal as of January 1, 2011.
True value in money for the subject property for tax years 2011 and 2012 is set at $101,050, assessed value $17,448 (residential – $14,446; agricultural $3,002).
Complainants appeared pro se.
Respondent appeared pro se.
Case decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the assessment of the Putnam County Assessor.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2011.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.Complainants purchased the property in March, 2011.Complainants received no notice as to the change in assessment on the property and their first notification of the assessed value on the property under appeal was the receipt of the tax bill on the property.
2. Submission on Documents.By Order dated 1/18/12, parties were to file and exchange exhibits and written direct testimony on or before March 1, 2012.Parties could file objection to submission of the appeal on documents, in lieu of an evidentiary hearing on or before March 1, 2012.Neither party filed objection.Evidentiary hearing was waived and case was submitted on exhibits and written direct testimony.
3.Subject Property.The subject property is identified by map parcel number 003+150420001.01.The property is located at 21772 State Hwy FF, Worthington, Missouri.
The property consists of 49.7. The property is improved by a dwelling which sits on a one acre home site.The 48.7 acres are valued based upon agricultural productive value.There are three machine/utility buildings which are assessed as agricultural improvements.[6]The subject was purchased by Complainants for $125,000 on March 18, 2011.[7]The former garage space had been converted by the prior owner to living area.[8]
4.Assessment.The Assessor appraised the residential portion of the property at $76,030, assessed value of $14,446 and the agricultural portion of the property at $25,020, assessed value of $3002.[9]
5.Complainant’s Evidence.Complainants submitted the following exhibits which were received into evidence.
|
EXHIBIT |
DESCRIPTION |
|
A |
Closing statement – 3/18/11 purchase – $125,000 |
|
B |
Photograph of 6’ French Doors for Garage |
|
C |
Photograph looking into French Doors of Garage |
|
D |
Photograph of interior ofGarage |
|
E |
Photograph of interior of Garage |
|
F |
Photograph looking from interior out through French Doors of Garage |
|
G |
Written Direct Testimony – Complainants |
There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[10]
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, 2011.
6.Respondent’s Evidence.Respondent submitted the following exhibits which were received into evidence.
|
EXHIBIT |
DESCRIPTION |
|
1 |
Property Record Card and Photographs of Subject Property |
|
2 |
Written Direct Testimony – Paul Rouse |
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.[11]
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.[12]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.[13]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.
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]
Complainants’ Burden of Proof
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, 2011.[18]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.”[19]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.
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[20]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.[21]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[22]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[23]The owners were only challenging the residential portion of the Assessor’s valuation.The opinion of value given in the Complaint for Review of Assessment was $60,000.No evidence was presented to establish from a recognized appraisal methodology that the house and one acre home site would have sold on January 1, 2011, for $60,000.[24]The purchase by Complainant’s at $125,000 did not have an allocation between the value of the home site and the remaining acreage and agricultural buildings.
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.[25]However, as in this instance when no evidence is presented to make the allocation as between the value of the home site and the value of the farm land and buildings, the actual sale price of the entire tract is not beneficial.
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.”[26]The Hearing Officer is only left to speculation, conjecture and surmise as to the home site value in this appeal.Complainants’ main contention relates to the Assessor treating the former garage area as living space.The Assessor properly included it as living area.The Hearing Officer has no basis upon which to arrive at what if any adjustment should be made to the former garage area due to Complainants apparently using it as storage space.
Complainants’ evidence failed to provide a proper foundation for an opinion of value of $60,000 for the home site.The evidence failed to establish that opinion was based upon proper elements.Accordingly, Complainants failed to meet their burden of proof.
ORDER
The assessed valuation for the subject property as determined by the Assessor for Putnam County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2011 and 2012 is set at $17,448 (residential – $14,446; agricultural $3,002).
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. [27]
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 May 21, 2012.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Senior Hearing Officer
[2] 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).
[3] 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).
[4] Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Lowe v. Lombardi, 957 S.W.2d 808 (Mo. App. W.D. 1997); Forms World, Inc. v. Labor and Industrial Relations Com’n, 935 S.W.2d 680 (Mo. App. W.D. 1996); Evangelical Retirement Homes v. STC, 669 S.W.2d 548 (Mo. 1984); Pulitzer Pub. Co. v. Labor and Indus. Relations Commission, 596 S.W.2d 413 (Mo. 1980); St. Louis County v. STC, 562 S.W.2d 334 (Mo. 1978); St. Louis County v. STC, 406 S.W.2d 644 (Mo. 1966).
[5] Hermel, Inc. v. STC, 564 S.W.2d 888 (Mo. 1978); Black v. Lombardi, 970 S.W.2d 378 (Mo. App. E.D. 1998); Holt v. Clarke, 965 S.W.2d 241 (Mo. App. W.D. 1998); Smith v. Morton, 890 S.W.2d 403 (Mo. App. E.D. 1995); Phelps v. Metropolitan St. Louis Sewer Dist., 598 S.W.2d 163 (Mo. App. E.D. 1980).
[9] Residential property is assessed at 19% of its true value in money (appraised value, fair market value); agricultural improvements are assessed at 12% of its true value in money (appraised value, fair market value);agricultural land is assessed at 12% of its agricultural productive value.Section 137.115.5, RSMo.
[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.
[19] 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).
[22] 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).
[23] 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] 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).