State Tax Commission of Missouri
|GROWTH DEVELOPMENTS, LLC,||)|
|v.||)||15-16849 & 15-16850|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,||)|
DECISION AND ORDER
The assessments made by the Board of Equalization of St. Louis County (BOE) are SUSTAINED. Complainant Growth Developments, LLC (Complainant) did not present substantial and persuasive evidence to rebut the presumption of correct assessments by the BOE.
Complainant was represented by counsel Patrick Keefe.
Respondent was represented by counsel Priscilla Gunn.
Case decided by Hearing Officer John Treu (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent set the true market values (TMV) of the subject properties (21J510497 and 21J510398), as residential properties, at $166,600 and $171,000 respectively. In 2015, the previous owner of the properties appealed to the BOE. On September 18, 2015 the BOE set the TMV of parcel 21J510497 at $140,000. On July 27, 2015 Respondent and the prior owner reached a settlement as to the TMV of parcel 21J510398 at $140,500. The value as of January 1 of the odd numbered year remains the value as of January 1 of the following even numbered year unless there is new construction or improvement to the property. Section 137.115.1 RSMo The State Tax Commission (STC) takes these appeals to determine the TMV for the subject properties as of January 1, 2015.
Complainant filed the following exhibits:
|A||Written Direct Testimony of Rob Heyder||Admitted|
|B||Sale Contract for 2541 S. Big Bend||Admitted|
|C||Sale Contract for 2547 S. Big Bend||Admitted|
|D||Closing Statement for 2541 S. Big Bend||Admitted|
|E||Closing Statement for 2547 S. Big Bend||Admitted|
Respondent, in a Motion to Dismiss filed the following exhibits:
|WDT||Written Direct Testimony of Kathy Anderson||Admitted|
|1||BOE Appeal of 2541 S. Big Bend||Admitted|
|2||BOE Appeal of 2547 S. Big Bend||Admitted|
|3||BOE Notice of Decision for 2541 S. Big Bend||Admitted|
|4||Settlement for 2547 S. Big Bend||Admitted|
|5||Memorandum of Settlement for 2547 S. Big Bend||Admitted|
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 these appeals is proper. Complainants timely appealed to the STC.
- Evidentiary Hearing. The parties agreed, immediately prior to the evidentiary hearing on April 17, 2016, to submit the appeals on the record.
- Identification of Subject Properties. The subject properties are identified by parcel/locator numbers 21J510497 and 21J510398. They are further identified as 2541 S. Big Bend and 2547 S. Big Bend, St. Louis County, Missouri. No evidence was offered regarding the specific characteristics of the subject properties, including, but not necessarily limited to, the motivations of the buyer and seller, that the parties were well informed and acting in their best interests, that the property was exposed to the open market for a reasonable time and that any financing terms were generally available in the Community at the specified date and typical for the property type in its locale.
- Assessment. Respondent set the true market values (TMV) of the subject properties (parcels 21J510497 and 21J510398), as residential properties, at $166,600 and $171,000 respectively, as of January 1, 2015.
- Board of Equalization. The BOE set the TMV of the parcel 21J510497 at $140,000. Respondent and the prior owner reached a settlement as to the TMV of parcel 21J510398 at $140,500. Although Respondent’s exhibits reflect that the prior owner withdrew its appeal to the BOE regarding parcel 21J510398, it is presumed that the BOE issued an appropriate ruling to effectuate such settlement.
- Purchase of Property. On September 24, 2015 Complainant purchased parcel 21J510497 for $70,000 and parcel 21J510398 for $75,000.
- Presumption of Correct Assessment Not Rebutted. Complainants’ evidence was not substantial and persuasive to rebut the presumption of correct assessments by the BOE.
CONCLUSIONS OF LAW AND DECISION
The STC has jurisdiction to hear these appeals 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.
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 the Board of Equalization, correcting any assessment which is unlawful, unfair, improper, arbitrary or capricious. Section 138.431.5 RSMo; 12 CSR 30-3.080 (2). The filing of exhibits and written direct testimony 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 evidence submitted and then proceeded to ascertain if said exhibits and written direct testimony met the standard of substantial and persuasive evidence to establish the market value of the property.
Proper Process Presumed
Missouri subscribes to the hoary maxim omnia presumuntur rite esse acta. As translated in Woolridge et al. v. La Crosse Lumber Co., 236 S.W. 294, 297 (1921), “it is to be presumed that everything done by an officer, in connection with the performance of an official act in the line of his duty, is legally done, and, a fortiori, absent proof to the contrary, all things are presumed to have been rightfully and lawfully done.”
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 property and tangible personal property are assessed at set percentages of true value in money: residential property at 19%; commercial property at 32%; and agricultural property at 12%. Section 137.115.5 RSMo (2000) as amended.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. In charter counties or the City of St. Louis, there exists by statutory mandate a presumption that the Assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways.
The BOE presumption operates in every case to require the taxpayer to present evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.
The computer-assisted presumption is applicable only if (1) the BOE lowered the values of the Assessor and Respondent is seeking to sustain the original assessments and (2) it has not been shown that the Assessor’s valuations were not the result of a computer assisted method. The BOE’s valuations are assumed to be independent valuations.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an alleged overvaluation, the Complainant must prove the true value in money of the subject property on the subject tax day. Hermel, Inc., v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978). True value in money is defined as the price that the subject property would bring when offered for sale by one willing but not obligated to sell it and bought by one willing or desirous to purchase but not compelled to do so. Rinehart v. Bateman, 363 S.W.3d 357, 365 (Mo. App. W.D. 2012); Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008); Greene County v. Hermel, Inc., 511 S.W.2d 762, 771 (Mo. 1974). True value in money is defined in terms of value in exchange and not in terms of value in use. Stephen & Stephen Properties, Inc. v. State Tax Commission, 499 S.W.2d 798, 801-803 (Mo. 1973). In sum, true value in money is the fair market value of the subject property on the valuation date. Hermel, Inc., 564 S.W.2d at 897.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
A presumption exists that the assessed value fixed by the BOE is correct. Rinehart, 363 S.W.3d at 367; Cohen, 251 S.W.3d at 348; Hermel, Inc., 564 S.W.2d at 895. “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); 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).
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.” Westwood Partnership, 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. W.D. 1991).
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule, or method in determining true value in money 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); Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).
The Hearing Officer, as the trier of fact, may consider the testimony of an expert witness and give it as much weight and credit as deemed necessary when viewed in connection with all other circumstances. Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. W.D. 1991). The Hearing Officer as the trier of fact, is not bound by the opinions of experts but may believe all or none of the expert’s testimony or accept it in part or reject it in part. Exchange Bank of Missouri v. Gerlt, 367 S.W.3d 132, 135-36 (Mo. App. W.D. 2012).
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the STC. It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case. See, Nance v. STC, 18 S.W.3d 611, 615 (Mo. App. W.D. 2000); Hermel, Inc., 564 S.W.2d at 897; Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975). 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. 1974).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005), citing St. Louis County v. Security Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977). “Each valuation approach is applied with reference to a specific use of the property—its highest and best use.” Snider, 156 S.W.3d at 346-47, citing Aspenhof Corp., 789 S.W.2d at 869. “The method used depends on several variables inherent in the highest and best use of the property in question.” Snider, 156 S.W.3d at 347.
“Each method uses its own unique factors to calculate the property’s true value in money.” Id. “The ‘comparable sales approach’ uses prices paid for similar properties in arms-length transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. (quotation omitted). “This approach is most appropriate when there is an active market for the type of property at issue such that sufficient data [is] available to make a comparative analysis.” Id.
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:
- Buyer and seller are typically motivated.
- Both parties are well informed and well advised, and both acting in what they consider their own best interests.
- A reasonable time is allowed for exposure in the open market.
- Payment is made in cash or its equivalent.
- Financing, if any, is on terms generally available in the Community at the specified date and typical for the property type in its locale.
- 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.
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.
In this case, Complainant’s evidence was not persuasive to establish the value of the subject properties as of January 1, 2015. The prices paid for the subject properties on September 24, 2015, without any evidence regarding the real estate market conditions between January 1, 2015, and September 24, 2015, without any evidence as to the condition of the properties or any evidence concerning the circumstances that might have affected the terms of the sale do not establish the values of the subject properties as of January 1, 2015. To conclude otherwise would require the Hearing Officer to participate in speculation and conjecture. See, Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. 1980). Furthermore, Complainant presented no evidence of new construction or improvements to the properties to prompt a change in assessed values.
The TMV for the subject properties as determined by the BOE are SUSTAINED.
Application for Review
A party may file with the STC an application for review of this decision within 30 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
The Collector of St. Louis 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 23rd, 2017
STATE TAX COMMISSION OF MISSOURI
Senior Hearing Officer
Delivery or Notice was made via mail, email, fax, or personally on May 23rd 2017, to the following Individuals of this Order