State Tax Commission of Missouri
JAMES & ANNETTE SIEVE,)
)
Complainants,)
)
v.) Appeal Number 09-57006
)
TOM COPELAND, ASSESSOR,)
FRANKLIN COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Franklin County Board of Equalization reducing the assessment made by the Assessor is SUSTAINED.Complainant appeared pro se. Respondent appeared by counsel Mark Vincent.Case heard and decided by Hearing Officer Maureen Monaghan.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2009.
SUMMARY
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Franklin County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $98,580, assessed value of $18,730, as residential property.The Board reduced the value to $89,500, assessed value of $17,005.Evidentiary Hearing was held on October 22, 2009, at the Franklin County Government Center, Union, Missouri.The Complainant proposed a value of $57,000.The Assessor proposed a value of $90,000.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 from the decision of the Franklin County Board of Equalization.
2.Subject Property.The subject property is located at 4 West 6th Street, Gerald, Missouri.The property is identified by parcel number 57-25-1-11.0-1-005-165.100.The property consists of .18 of an acre lot improved by a one-story vinyl single-family structure of average quality construction.The house was built in 1997 and appears to be in normal condition.The residence has a total of five rooms, which includes three bedrooms, one bath, and contains 912 square feet of living area.There is a full basement and an attached garage.[1]
3.Sale History.The subject property was purchased by Complainant for $57,000 on April 8, 2009.[2]The property was listed from October, 2008.[3]
4.Complainant’s Evidence.Complainant testified at the hearing.The Complainant is a realtor.Complainant offered into evidence Exhibit A, the closing statement on the subject parcel dated April 8, 2009.Complainant also offered into evidence Exhibit B, the MLS history of the subject property.Exhibit A was not admitted into evidence due to the closing date being after January 1, 2009.[4]Respondent objected to Exhibit B on the basis of lack of foundation; objection was overruled.[5]
5.Complainant’s Evidence Did Not Establish Value.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, 2009, to be $57,000.
6.Respondent’s Evidence.Respondent presented the appraisal report[6] and testimony of Lori Ruby, Missouri State Certified Residential Real Estate Appraiser.Ms. Ruby gave her opinion of the fair market value of Complainant’s property as of January 1, 2009, to be $90,000 based upon a sales comparison analysis.
7.Appraiser’s Sales Comparison Properties.The Respondent’s appraiser in performing her appraisal used three sales to compare to the subject property for the purpose of making a determination of value of the subject property. The three properties were located within a mile of the subject.The properties sale dates ranged from November 2007(comparable #2)to October 2008 (comparable #3) with a range of price per square foot ranging from $85.45 (comparable #3) to $98.87 (comparable #2).The sale properties were larger in size to the subject property range from 112 additional square feet (comparable #3) to 426 additional square feet (comparable #1).The net adjustments ranged from -25% (comparable #1) to -5% (comparable #3).The adjusted sales prices calculated to $97,000 (comparable #1), $106,000 (comparable #2), and $83,300 (comparable #3).The appraiser concluded on a $90,000 value which calculated to a value per square foot of $98.68 compared with the sales prices per square foot of living area for the comparables of $96.41(#1), $98.87(#2) and $85.45 (#3).
8.Respondent’s Evidence Did Not Establish Value.Respondent’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, 2009, to be $90,000.
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.[7]
Presumptions In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[8] The presumption in favor of the Board is not evidence.A presumption simply accepts something as true without any substantial proof to the contrary.In an evidentiary hearing before the Commission, the valuation determined by the Board is accepted as true only until and so long as there is no substantial evidence to the contrary.
The presumption of correct assessment is rebutted when the taxpayer, or respondent when advocating a value different than that determined by the Board, presents substantial and persuasive evidence to establish that the Board’s valuation is erroneous and what the fair market value should have been placed on the property.[9]
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.[10]True value in money is defined in terms of value in exchange and not value in use.[11]It is the fair market value of the subject property on the valuation date.[12]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.[13]
Methods of Valuation
Proper methods of valuation and assessment of property are delegated to the Commission.It is within the purview of the Hearing Officer to determine the method of valuation to be adopted in a given case.[14]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.[15] Complainant did not present an opinion of value based on any recognized methodology for valuation of property for ad valorem tax purposes.Respondent’s appraiser concluded an opinion of value relying on the sales or market approach to value.This approach generally provides the most credible basis for appraisal of owner occupied property.[16]
Sale of Subject Property
In St. Joe Minerals Corporation v. State Tax Commission[17], the Complainants appealed their assessed valuation for years 1988, 1989, and 1990.The subject property sold in June 1990.The State Tax Commission concluded on a value using the income capitalization method.The Court of Appeals found that the Commission acted unreasonably in valuing taxable real property of the mine at a level greater that the sales price for the mine, personal property, net working capital and non-mine realty.The Court did state that the actual purchase price is not conclusive for tax purposes.The evidence of the purchase price may be admissible to establish value if it is a voluntary sale, not too remote in time.
In St. Louis County v. STC[18], the valuation date was January 1, 1972.The case was remanded back to the State Tax Commission after appeal.In its remand order, the Court stated that the commission may accept evidence on the subject properties actual rents and expenses incurred in 1972 stating that the commission would have the advantage of hindsight not enjoyed by the assessor.
In Bill May, Trustee v. St. Louis City Assessor[19], the Hearing Officer set aside the assessments made by the St. Louis City Board of Equalization.The City filed an Application for Review alleging that the Hearing Officer erred in accepting prices on sale dates after January 1, 2007, as the basis for the 2007 assessment, thereby using an improper date for valuation.The Commission found that the “point is well taken” and use of sales dates ranging from eight to thirteen months after the valuation date was reversible error.
In this case, the Hearing Officer accepted into evidence sales information regarding the subject property.Information regarding the sale of the subject property within a few months of the valuation date is relevant.The weight given to the evidence will depend upon the conditions of the sale and other evidence presented.
Complainant’s Burden of Proof
In order to prevail, Complainant 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, 2009.[20]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.”[21]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[22]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.[23]
The owner of property is generally held competent to testify to its reasonable market value.[24]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[25]Complainant’s opinion of value is based upon the sale of the property after the January 1, 2009 valuation date.
The Complainant testified that he purchased the property in 2009.The offer was made and accepted on the property on February 25, 2009.The closing of the sale was on April 17, 2009.The sale price of the property was $57,000.The property was initially listed on
October 17, 2008, for $89,500.The price was reduced in January 2009 to $75,000 and again in February to $67,500.The property was listed by a real estate agent.[26]The property was sold after foreclosure.[27]
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the Board of Equalization, must meet the same burden of proof to present substantial and persuasive evidence of the value advocated as required of the Complainant under the principles established by case law.[28]Respondent proposed an increase to the valuation to $90,000.
Respondent presented an appraisal of the property.The Respondent used three sales in conducting a sales comparison approach.The appraisal is relevant to the valuation of the property.The weight to be given the resulting value is dependent on the information used in the appraisal.
The comparable properties were discussed in the Findings of Facts.Hearing Officer found that Sales Comparison #3 was most similar to the subject property and should have been weighted accordingly.The property was located within one mile of the subject property and was sold in October 2008 for $87,500.The comparable property’s lot size is larger, it is 112 square feet larger, it has a larger basement, it has an open porch and patio, and outbuildings.
Summary & Conclusion
Neither party met the required burden of proof to prove fair market value or present substantial and persuasive evidence to establish a value different from the Board of Equalization.Although the Complainant provided evidence of the sale of the subject property in early 2009, there was evidence that the sale was due to a foreclosure on the property.The Complainant’s evidence did not include the conditions of the sale and the sale of the subject property is only one sale and does not establish market.The sales comparison approach conducted by the appraiser supported the findings of the Board of Equalization, but was not persuasive to establish a market value of $90,000.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Franklin County for the subject tax day is SUSTAINED.
The assessed value for the subject property for tax year 2009 is set at $17,005.
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.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 appeal is based will result in summary denial. [29]
The Collector of Franklin 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 November 10, 2009.
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 this 10thday of November, 2009, to:James Sieve, 27 Wilderness Lane, Defiance, MO 63341, Complainant; Mark Vincent, Franklin County Counselor, P.O. Box 439, Union, MO 63084, Attorney for Respondent; Tom Copeland, Assessor, 400 E. Locust, Suite 105A, Union, MO 63084; Debbie Door, Clerk, Franklin County Courthouse, 400 E. Locust, Suite 201, Union, MO 63084; Linda Emmons, Collector; Franklin County Courthouse, 400 E. Locust, Suite 103, Union, MO 63084.
______________________________
Barbara Heller
Legal Coordinator
[8] 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).
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[10] 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).
[11] Daly v. P. D. George Company, et al, 77 SW3d 645, 649 (Mo.App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 SW2d 376, 380 (Mo.App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[13] 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.
[14] See, Nance v. STC, 18 S.W.3d 611, at 615 (Mo. App. W.D. 2000); Hermel, supra;Xerox Corp. v. STC, 529 S.W.2d 413 (Mo. banc 1975).
[15] 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).
[21] 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).
[24] 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).
[25] 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).