J.H. BERRA CONSTRUCTION, )
v. ) Appeal Number 01-34019
RANDY HOLMAN, ASSESSOR, )
JEFFERSON COUNTY, MISSOURI, )
DECISION AND ORDER
The above matter was heard on December 20, 2002, before Hearing Officer Aimee Smashey, in the Jefferson County Courthouse, Hillsboro, Missouri. Complainant was represented by David Welsh, Attorney at Law. Respondent was represented by David Senkel, Attorney at Law. Pursuant to Section 138.431.4, RSMo, the case has been transferred to Hearing Officer Luann Johnson for Decision and Order.
The appeal covers certain items of heavy construction equipment owned by the taxpayer and utilized on construction projects in Jefferson County. The taxpayer made no return in Jefferson County for tax year 2001. The assessor determined that the assessed value of the taxpayer’s property located in Jefferson County on January 1, 2001 was $1,300,000. The Board of Equalization affirmed. The taxpayer appealed asserting that the said personal property had no taxable situs in Jefferson County for the period in question.
The issue in this case is whether or not certain items of equipment owned by Complainant were “situated” in Jefferson County on January 1, 2001, pursuant to Section 137.095.1, RSMo. Complainant does not dispute the value placed upon the equipment by the assessor’s office.
Complainant has failed to present substantial and persuasive evidence tending to show that Respondent’s assessment was erroneous.
TAKEN UNDER ADVISEMENT
At hearing, Respondent sought to introduce Exhibit 5 demonstrating the items of personal property Complainant reported as present in Jefferson County on January 1, 2002. Complainant objected to the introduction of Exhibit 5 as not being relevant and the exhibit was taken under advisement. Because we find that “situated” as used in Section 137.095.1, RSMo does not contemplate the location of a piece of property on a single day but denotes a more or less permanent location, Exhibit 5 is relevant.
FINDINGS OF FACT
1. Jurisdiction over this appeal is proper.
2. Complainant is involved in the business is heavy construction, primarily consisting of construction of highways, sanitary and storm sewers, water mains and grading.
3. Complainant maintains a facility at 5091 New Baumgartner Road, St. Louis, Missouri. This facility is located in St. Louis County. Most administrative functions occur at this location. This location also houses the company’s equipment maintenance shops, fuel depot, equipment and material storage yard and concrete plant.
4. On January 1, 2001, Complainant owned heavy equipment having an acquisition cost in excess of 6.8 million dollars (Tr. 20).
5. On January 1, 2001, Complainant filed a personal property tax return with St. Louis County in which it declared total equipment acquisition costs of 6.38 million dollars (Tr. 19). No itemized listing of property was filed with St. Louis County.
6. Complainant did not file a personal property tax return for any county, other than St. Louis County, for tax year 2001 (Tr. 16).
7. Complainant was engaged in construction projects in Jefferson County during tax years 2000 and 2001. Construction began on the “Highway 21” project in July of 2000 and Complainant was scheduled to complete the project in December 2002 (Complainant’s Exhibit O). The “Highway 21” project was less than 15% complete on January 1, 2001 (Complainant’s Exhibit O). Complainant was also actively working on three sewer/water projects on
November 30, 2000 (Complainant’s Exhibit M) and commenced other Jefferson County projects some time between January 1, 2001, and January 1, 2002 (Respondent’s Exhibit 5). Complainant has failed to disclose Jefferson County projects it was working on prior to November 30, 2000.
8. On January 1, 2001, Complainant owned 48 pieces of equipment which were physically located in Jefferson County, Missouri (Complainant’s Exhibit B)
9. On January 1, 2002, Complainant declared personal property physically located in Jefferson County, Missouri having a total acquisition cost in excess of 6.8 million dollars. (Respondent’s Exhibit 5), a sum in excess of the total acquisition costs declared for St. Louis County for tax year 2001.
10. Some of Complainant’s equipment would be returned to Complainant’s location in St. Louis County when not in use; but Complainant also had a practice of parking unused equipment on job sites to reduce transportation costs.
11. Some of Complainant’s equipment would be returned to Complainant’s St. Louis location for servicing; but Complainant also had a practice of servicing equipment on job sites.
12. Complainant maintained an “office trailer” on the “Highway 21” project.
13. Complainant’s usage reports (Complainant’s Exhibits G through J) are not adequate to identify the number of days that each piece of equipment was physically located in Jefferson County (Tr. 29).
14. Respondent’s employees have observed the presence of Complainant’s equipment in Jefferson County for a number of years.
CONCLUSIONS OF LAW
Pursuant to Section 137.095, RSMo, corporate tangible personal property is assessed and taxed in the county in which the property is “situated” on the first day of January of the tax year. “Situated” is synonymous with “situs” and denotes a more or less permanent location. However, situs does not require an actual physical presence in the county on the tax day. Buchanan County v. State Tax Commission, 407 S.W. 2d 910 (Mo. 1966). The rationale for taxing property where it is permanently located is based upon the theory that the property receives protection from the laws of the place where it is found. City of St. Louis v. Wiggins Ferry Co., 40 Mo. 580 (1867).
The exception to the rule of taxing property where it is “situated” is also contained in Section 137.095, RSMo which provides that property which is subject to regulation under Chapter 390, RSMo. (Motor Carriers and Express Companies) shall be assessed and taxed in the county in which the motor vehicles are “based.” “Based” is defined as the place where the vehicle is most frequently dispatched, garaged, serviced, maintained, operated or otherwise controlled.
The exception within this exception is that leased passenger vehicles shall be assessed at the residence of the driver or, if the residence of the driver is unknown, at the location of the lessee. Chapter 390, RSMo does not specifically address leased vehicles, but does regulate passenger vehicles such as some classes of charter buses.
The statute clearly contemplates that there can be a difference between where a piece of property is “situated’ and where a piece of property is “based,” with the later applying only to those vehicles regulated pursuant to Chapter 390, RSMo. Indeed, if “situated” and “based” were synonymous terms, there would have been no need for the distinction within the statute.
And, since the personal property in question is not regulated under Chapter 390, RSMo, we do not consider the elements of “basis,” per se, but turn our attention to trying to ascertain the meaning of “situated.”
In Buchanan County, supra, the court held that the State Tax Commission erred in holding that a vehicle must be physically present in the taxing jurisdiction on the tax day in order to ‘situated’ in that jurisdiction for tax purposes, stating:
The provision that tangible personal property ‘shall be taxable in the county in which such property may be situated’ on the stated day is not the same as providing that the property shall be taxable where ‘physically present’ on that day. In its application to personal property, the word ‘situated’ as used in the statute authorizing or directing the taxation of property, connotes a more or less permanent location or situs. . . . .the word ‘situated’ as used in the statute ‘clearly implies some element of permanency’. When used in statutes referring to the taxation or mortgaging of personal property, the word ‘situated’ has been held to require more than a mere temporary presence. . .the word ‘situated’ refers to the place where the personal property is regularly kept. . .with a more or less permanent location or situs. . .Whether these 239 vehicles were subject to being placed on the tax assessment list in Buchanan County depended upon whether on January 1, 1964, they were regularly kept there, that is, whether the permanent situs or location of the vehicles was in Buchanan County. This is a fact issue which has not yet been decided in this case.” (citations omitted).
While Buchanan County, supra, prohibits the Commission from relying solely on the location of the personal property on the tax day, the subsequent decision of Bi Go Markets, Inc. v. Morton, 843 S.W.2d 916 (Mo. 1992), reminds us that location cannot be discounted when determining tax situs. In Bi Go, supra, the question involved which state had the right to tax airplanes — the state where the owner had its principal place of business or the state where the airplanes were habitually hangered. However, the principles which the Bi Go court applied to determine situs are equally applicable to determining situs in the instant action.
In Bi Go, the court stated: AAs personal property became more mobile, the ancient fiction (mobilia sequuntur personam) gave way to the rule that tangible personal property is to be taxed only where the property has a physical situs. Physical situs is determined by where the property is “habitually or continuously employed” and the jurisdiction which has provided “continuous protection or benefits throughout the year,” entitling it to retain the power to tax. [see also, Beelman Truck Company v. Ste. Genevieve County Board of Equalization, 861 S.W.2d 557 (Mo. 1993) – continuous and habitual use within state creates tax situs.] The Bi Go court rejected the taxpayer’s narrow argument that the aircraft were “not permanently located” in Missouri because the aircraft were not “continuously (present) throughout the year, not a fraction thereof, whether weeks or days.” Rather, the court found that the aircraft’s presence in the state for 255 out of 309 days [from July 1990 to May 1991] was sufficient to find that the aircraft had a tax situs in Missouri.
Inasmuch as the rationale for taxing property where it is permanently located is based upon the theory that the property receives protection from the laws of the place where it is found. City of St. Louis, supra, it follows that a county which is responsible for providing protection for the property, on a continuous and habitual basis, is entitled to assess and tax that property. There is no question in our minds that Complainant anticipates that Jefferson County will provide police protection for its heavy equipment that it has seen fit to park within the confines of the county. And, to the extent that Jefferson County provides continuous and habitual police protection for the benefit of Complainant, the county is entitled to levy a tax upon the property located in said county.
While there is no longer an automatic presumption regarding the correctness of an assessor’s valuation, this does not mean that there is now a presumption in favor of the taxpayer. The taxpayer in a Commission tax appeal still bears the burden of proof and must show by a preponderance of evidence that the assessment being appealed is incorrect. Westwood Partnership v. Gogarty, 2003 WL 176823 (E.D. 01-28-03). We find that Complainant has failed to meet its burden of proof.
Complainant seeks to argue that the subject property has no “basis” in Jefferson County. But, as demonstrated above, the question in this appeal is not “basis” but, rather, where the property was “situated.” In our order dated July 9, 2002, we said: “The parties are advised to present factual evidence about the personal property that will inform this Commission in rendering a decision about where the property was legally “situated” on the tax day . . .” In order to prevail, Complainant needed to demonstrate that the property in question was “continuously and habitually employed” or located in a county other than Jefferson County. Complainant was uniquely qualified to demonstrate that the subject property was not located in Jefferson County, but has failed to present evidence which would tend to demonstrate that said equipment was located or “continuously and habitually employed” in any other county.
Respondent urges us to consider the disparity in the total acquisition costs declared by Complainant as an admission against interest allowed by Buchanan, supra. While acknowledging that a disparity exists, no weight has been assigned to that disparity in reaching this decision.
Finally, Respondent asserts a value for the subject property which is higher than the value originally determined by the Respondent and approved by the Board of Equalization. Complainant did not appeal on the issue of value and Respondent has no standing to raise the issue.
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Jefferson County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2001 is set at $1,300,000.
A party may file with the Commission an application for review of a hearing officer decision within thirty (30) days of the mailing of such decision. The application shall contain specific detailed 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.
If an application for review of a hearing officer 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 Collector of Jefferson 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. If any 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 April 16, 2003.
STATE TAX COMMISSION OF MISSOURI
Luann Johnson, Hearing Officer
AFFIRMING HEARING OFFICER DECISION
UPON APPLICATION FOR REVIEW
On April 16, 2003, Hearing Officer Luann Johnson, entered her Decision and Order (Decision) affirming the assessment by the Respondent which had been sustained by the Jefferson County Board of Equalization.
Complainant timely filed Application for Review of the Decision. Respondent was given until and including June 2, 2003, to make response. No response was filed.
Upon review of the record in the present appeal, 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. 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).
The Hearing Officer did not err in her determinations as challenged by Complainant.
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.
Judicial review of this Order may be had in the manner provided in Sections 138.470 and 536.100 to 536.140, RSMo within thirty days of the date of the mailing of this Order.
SO ORDERED June 19, 2003.
STATE TAX COMMISSION OF MISSOURI
Sam D. Leake, Chairman
Bruce E. Davis, Commissioner
Jennifer Tidwell, Commissioner