Instituform Technologies Inc Et al v. Jake Zimmerman, Assessor St. Louis County

January 12th, 2016

 

State Tax Commission of Missouri

 

INSTITUFORM TECHNOLOGIES, INC ) Appeal No. 11-13465
MISSOURI HANGER WEST, INC, )   11-13474 &
  )   11-13510
JOE H SCOTT, SR et al )   11-13475
CROWN DIVERSIFIED IND CORP, )   11-13505
ARLINE M MEYER )   11-13506
TOPEKA AIRCRAFT SALES & SERVICE )   11-13509
Complainant(s), )    
  )    
v. )    
  )    
JAKE ZIMMERMAN, ASSESSOR, )    
ST. LOUIS CO., MISSOURI, )    
  )    
Respondent. )    

 

 

ORDER

AFFIRMING DECISION OF THE HEARING OFFICER

UPON APPLICATION FOR REVIEW

 

On January 12, 2016, Chief Counsel Maureen Monaghan, acting as Hearing Officer (Hearing Officer), entered her Decisions and Order (Decision) sustaining the assessment by the Board of Equalization of St. Louis County (BOE), more specifically, the classification of the property. The Hearing Officer sustained the classification of the property as commercial.

Instituform Technologies,  Missouri Hanger West, Inc, Joe H Scott, Jr , Crown Diversified Industries Corp, Arline M. Meyer, and Topeka Aircraft Sales and Service, Inc. (Complainants) filed their Application for Review of the Decision.  Jake Zimmerman, Assessor of St. Louis County, (Respondent) filed his Response.  Complainants filed their Reply.

 

 

CONCLUSIONS OF LAW

Standard of Review

 

A party subject to a Decision and Order of a Hearing Officer with the State Tax Commission (STC) may file an application requesting the case be reviewed by the Commission. Section 138.432 RSMo Cum. Supp. 2015; 12 CSR 30-3.080(4). The Commission may then summarily allow or deny the request.  Section 138.432; 12 CSR 30-3.080(5).  The Commission may affirm, modify, reverse, set aside, deny, or remand to the Hearing Officer the Decision and Order of the Hearing Officer on the basis of the evidence previously submitted or based on additional evidence taken before the Commission.  Section 138.432; 12 CSR 30-3.080(5)(A).

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, 515 S.W.2d at 450; Chicago, Burlington & Quincy Railroad Company v. STC, 436 S.W.2d 650 (Mo. 1968).  Likewise, the Commission is free to consider all pertinent facts and give them such weight as reasonably the Commission deems them entitled.

The Commission, having reviewed the record and having considered the Decision of the Hearing Officer and the briefs of the parties, enters its Decision. Segments of the Hearing Officer’s Decision have been incorporated into our Decision without further reference.

DECISION

 

Complainant’s Points on Review

            In the Application for Review, Complainants claim that the Hearing Officer erred in not classifying the property as agricultural under Section 137.016.1(2) RSMo .

 

Commission’s Ruling

For the reasons that will now be set forth in response to Complainants’ Point on Review, the Commission finds Complainants’ arguments to be unpersuasive to warrant either a modification or overturning of the Decision.

Factual and Procedural History

Complainants’ properties were classified as commercial property. Complainants appealed to the BOE.  The BOE sustained the determination of classification.  Complainants timely appealed to the STC.  The parties agreed to waive evidentiary hearing and submit the appeals on a Stipulation of Facts and briefing of the parties.  The parties stipulated to the following facts:

a. The properties are located within the boundaries of the Spirit of St. Louis Airport in St. Louis County;

b. St. Louis County owns the airport operation;

c. St Louis County owns land within the airport boundaries;

d. Privately owned properties are found within the airport boundaries;

e. Spirit of St Louis Airport was privately owned at one time;

f. Spirit of St Louis Airport qualifies as a reliever airport under the National Plan of Integrated Airports System;

g. The airport receives federal airport improvement project funds through the Federal Aviation Administration;

h. Appeal 11-13465 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $503,100.  The property is approximately 2.31 acres.  The property, if agricultural, would be grade one;

i. Appeal 11-13474 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $1,309,100. The property is approximately 1.63 acres and currently valued at $355,000. The non-structural improvements include paving, fences and lights valued at $70,900.   The property, if agricultural, would be grade one;

k. Appeal 11-13475 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $784,800.  The property is approximately 1.39 acres and currently valued at $285,200.  The non-structural improvements include paving and lights valued at $57,710. The property, if agricultural, would be grade one;

l. Appeal 11-13505 – Parcel No. 18V430058 – is currently classified as commercial property with a true value of $1,059,200.  The property is approximately 5 acres and currently valued at $479,200.  The non-structural improvements include paving, fencing and lights valued at $294,770.  The property, if agricultural, would be grade one;

m. Appeal 11-13506– Parcel No. 18V430113 – is currently classified as commercial property with a true value of $96,000.  The property is approximately 5.55.   The property, if agricultural, would be grade one;

n. Appeal 11-13509 – Parcel No. 18W640058 – is currently classified as commercial property with a true value of $3,614,700.  The property is approximately 10.6 acres and currently valued at $1,893,100.  The non-structural improvements are valued at $285,310.  The property, if agricultural, would be grade one; and

o. Appeal 11-13510 – Parcel No. 18W640069 – is currently classified as commercial property with a true value of $22,200.  The property is approximately .72 acres and currently valued at $16,300.  The non-structural improvements are valued at $5,870.  The property, if agricultural, would be grade one.

Analysis

            We have reviewed the whole record in this case and find that the Hearing Officer did not err as Complainants alleged in their application for review.

Agricultural and Horticultural Property

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  provides for residential property to be assessed at 19% of true value in money; commercial property to be assessed at 32% of true value in money; and agricultural property to be assessed at 12% of true value in money.   Complainants allege that the Hearing Officer erred by not classifying at least a portion of their properties as agricultural.

Section 137.016. 1[1] RSMO stated: “As used in section 4(b) of article X of the Missouri Constitution, the following terms mean:

(1) “Agricultural and horticultural property”, all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; to the feeding, breeding and management of livestock which shall include breeding, showing, and boarding of horses; to dairying, or to any other combination thereof; and buildings and structures customarily associated with farming, agricultural, and horticultural uses. Agricultural and horticultural property shall also include land devoted to and qualifying for payments or other compensation under a soil conservation or agricultural assistance program under an agreement with an agency of the federal government. Agricultural and horticultural property shall further include land and improvements, exclusive of structures, on privately owned airports that qualify as reliever airports under the National Plan of Integrated Airports System, to receive federal airport improvement project funds through the Federal Aviation Administration. Real property classified as forest croplands shall not be agricultural or horticultural property so long as it is classified as forest croplands and shall be taxed in accordance with the laws enacted to implement section 7 of article X of the Missouri Constitution;…” (emphasis added)

The Complainants specifically argue that the Hearing Officer erred by not finding that their property should be classified as agricultural under the definition that includes land and improvements, exclusive of structures, on privately owned airports that qualify as reliever airports under the National Plan of Integrated Airports System.

The following is required under that portion of the statutory definition of agricultural property:

  • Land and improvements, exclusive of structures;
  • Located on privately owned airports; and
  • Airport qualifies as a reliever airport under National Plan of Integrated Airports System.

 

Although the properties (land and improvements exclusive of structures) are located at a reliever airport, the properties are not located on a privately owned airport. The Complainants stipulated to the fact that St. Louis County owns the airport operation. 

The Complainant argues that the statute should be interpreted as requiring:

  • Land and improvements, exclusive of structures;
  • Property is privately owned; and
  • Airport qualifies as a reliever airport under National Plan of Integrated Airports System.

 

Complainants’ argument fails as the statute clearly states that the airport must be a privately owned airport. Such is not established with these appeals as the Spirit of St. Louis is owned by by St. Louis County.

Complainants argue that the statute must be interpreted to include the publicly owned airports   because by classifying their property not as commercial but as agricultural, their property will be on more equitable footing with publicly owned airport property which is not taxed at all. The argument has not merit as no publicly owned property is subject to property tax as mandated by the Missouri Constitution and yet all property not exempted is still subject to assessment for property tax purposes.   Privately owned office buildings located next door to publicly owned office buildings still remain subject to assessment as commercial property such does not run afoul of any discriminatory practice.

The primary rule of statutory interpretation is to give effect to the legislature’s intent through the language used, and words should be given their plain and ordinary meanings wherever possible. Ivie v. Smith, 439 S.W.3d 189 (Mo. banc 2014). There is no ambiguity in the statutory definition of agricultural property as it pertains to airport property. If the legislature wanted any and all privately owned property at any reliever airport to be classified as agricultural, the legislature would not have stated “on privately owned airports.”

Summary & Conclusion

A review of the record in the present appeal provides ample support for the determination made by the Hearing Officer. The Commission finds no basis to support a determination that the Hearing Officer acted in an erroneous, arbitrary, capricious or unreasonable manner, or that she abused her discretion as the trier of fact and concluder of law in this appeal. 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).

ORDER

Upon review of the record and the Decision in this appeal, the Commission 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 St. Louis 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 June 28, 2016.

 

STATE TAX COMMISSION OF MISSOURI

 

Bruce E. Davis, Chairman

 

Victor Callahan, Commissioner

 

 Certificate of Service

 

I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 28th day of June, 2016, to:

 

Complainant’s(s’) counsel and/or Complainant; the Respondent County Assessor and/or Counsel for the Respondent County Assessor; and the County Collector.

 

 

Jacklyn Wood

Legal Coordinator

 

Contact Information for State Tax Commission:

Missouri State Tax Commission

P.O. Box 146

301 W. High Street, Room 840

Jefferson City, MO 65102

573-751-2414

573-751-1341 FAX

 

[1] The statutory language as of January 1, 2011.

[2] Complainants attempt to argue that the parties stipulated that the airport is privately and publicly owned.  The parties stipulated that the airport operation is publicly owned and that privately owned properties are found within the airport boundaries.

 

State Tax Commission of Missouri

 

 

INSTITUFORM TECHNOLOGIES, INC ) Appeal No. 11-13465
MISSOURI HANGER WEST, INC, ) 11-13474 &
) 11-13510
JOE H SCOTT, SR et al ) 11-13475
CROWN DIVERSIFIED IND CORP, ) 11-13505
ARLINE M MEYER ) 11-13506
TOPEKA AIRCRAFT SALES & SERVICE ) 11-13509
Complainant(s), )
)
v. )
)
JAKE ZIMMERMAN, ASSESSOR, )
ST. LOUIS CO., MISSOURI, )
)
Respondent. )

 

DECISION AND ORDER

 

HOLDING

 

Decision of the County Board of Equalization lowering the assessment made by the Assessor is sustained. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.

Complainants appeared by attorney James P Gamble.

Respondent appeared by attorney Priscilla Gunn.

Case heard and decided by Hearing Officer Maureen Monaghan.

ISSUE

Complainant appeals on the ground of misclassification, the decision of the St. Louis County Board of Equalization, which classified the properties as commercial. The Commission takes this appeal to determine whether the land and any improvements other than structures should be classified as “agricultural and horticultural property” Section 137.016 RSMo

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.  Complainants timely appealed to the State Tax Commission from the decision of the St. Louis County Board of Equalization.
  2. Evidentiary Hearing. The parties waived evidentiary hearing and submitted the appeal on briefs.
  3. Identification and Description of Subject Properties.
  4. The properties are located within the boundaries of the Spirit of St. Louis Airport in St. Louis County;
  5. St. Louis County owns the airport operation;
  6. St Louis County owns land within the airport boundaries;
  7. Privately owned properties are found within the airport boundaries;
  8. Spirit of St Louis Airport was privately owned at one time;
  9. Spirit of St Louis Airport qualifies as a reliever airport under the National Plan of Integrated Airports System;
  10. The airport receives federal airport improvement project funds through the Federal Aviation Administration;
  11. Appeal 11-13465 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $503,100.  The property is approximately 2.31 acres.  The property, if agricultural, would be grade one;
  12. Appeal 11-13474 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $1,309,100. The property is approximately 1.63 acres and currently valued at $355,000. The non-structural improvements include paving, fences and lights valued at $70,900. The property, if agricultural, would be grade one;
  13. Appeal 11-13475 – Parcel No. 17V220034 – is currently classified as commercial property with a true value of $784,800.  The property is approximately 1.39 acres and currently valued at $285,200.  The non-structural improvements include paving and lights valued at $57,710. The property, if agricultural, would be grade one;
  14. Appeal 11-13505 – Parcel No. 18V430058 – is currently classified as commercial property with a true value of $1,059,200.  The property is approximately 5 acres and currently valued at $479,200.  The non-structural improvements include paving, fencing and lights valued at $294,770.  The property, if agricultural, would be grade one;
  15. Appeal 11-13506– Parcel No. 18V430113 – is currently classified as commercial property with a true value of $96,000.  The property is approximately 5.55.   The property, if agricultural, would be grade one;
  16. Appeal 11-13509 – Parcel No. 18W640058 – is currently classified as commercial property with a true value of $3,614,700.  The property is approximately 10.6 acres and currently valued at $1,893,100.  The non-structural improvements are valued at $285,310.  The property, if agricultural, would be grade one;
  17. Appeal 11-13510 – Parcel No. 18W640069 – is currently classified as commercial property with a true value of $22,200.  The property is approximately .72 acres and currently valued at $16,300.  The non-structural improvements are valued at $5,870.  The property, if agricultural, would be grade one;

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.  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 – residential property at 19% of true value in money; commercial property at 32% of true value in money and agricultural property at 12% of true value in money.

Presumption In Appeal

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).   This presumption is a rebuttable rather than a conclusive presumption.

Complainants’ Burden of Proof

In order to prevail, Complainants must present substantial and persuasive evidence that the proposed classification is correct. 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.” 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)

Agricultural and Horticultural Property

On January 1, 2011, Section 137.016. 1 RSMO stated: “As used in section 4(b) of article X of the Missouri Constitution, the following terms mean:

(1) “Agricultural and horticultural property”, all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; to the feeding, breeding and management of livestock which shall include breeding, showing, and boarding of horses; to dairying, or to any other combination thereof; and buildings and structures customarily associated with farming, agricultural, and horticultural uses. Agricultural and horticultural property shall also include land devoted to and qualifying for payments or other compensation under a soil conservation or agricultural assistance program under an agreement with an agency of the federal government. Agricultural and horticultural property shall further include land and improvements, exclusive of structures, on privately owned airports that qualify as reliever airports under the Nation Plan of Integrated Airports System, to receive federal airport improvement project funds through the Federal Aviation Administration. Real property classified as forest croplands shall not be agricultural or horticultural property so long as it is classified as forest croplands and shall be taxed in accordance with the laws enacted to implement section 7 of article X of the Missouri Constitution;…” (emphasis added)

 

The issue in these appeals is whether the land and improvements, exclusive of structures, qualifies as agricultural and horticultural under Section 137.016 RSMo. The following is required under the statute:

  1. Land and improvements, exclusive of structures;
  2. Located on privately owned airports; and
  3. Airport qualifies as a reliever airport under Nation Plan of Integrated Airports System.

The issue in this appeal is whether the land and improvements, exclusive of structures, is located on a privately owned airport. The properties subject to these appeals are not located on a privately owned airport. The parties stipulated to the fact that St. Louis County owns the airport operation.

The Complainant argues that the property is private and on an airport that is a reliever airport and qualifies for funding under an improvement project. Complainant’s argument fails as the statute clearly states that the property must be located on a privately owned airport. Complainant’s attempt to argue the spirit of the legislation or public policy; however, Complainant’s have not established that the property is somehow used in airport operations.

Had the legislature wanted privately owned properties located at airports, whether publicly or privately owned, to be classified as agricultural properties it would have stated “privately owned land at airports” However, the statute reads privately owned airports – which does not include the Spirit of St. Louis after the acquisition by St. Louis County.

 

ORDER

The assessed valuation for the subject property as determined by the Assessor and reduced by the Board of Equalization for St. Louis County for the subject tax day is SUSTAINED.

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 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 this 12th day of January, 2016.

STATE TAX COMMISSION OF MISSOURI

 

Maureen Monaghan

Hearing Officer

 

Delivery or Notice was made via mail, email, fax, or personally on January 12th, 2016 to the following Individuals of this Order

James P Gamble, Attorney for Complainant,

Priscilla Gunn, Attorney for Respondent, pgunn@stlouisco.com

Jake Zimmerman, Assessor, syoutzy@stlouisco.com

Mark Devore, Collector, MDevore@stlouisco.com

 

Jacklyn Wood

Legal Coordinator