STATE TAX COMMISSION OF MISSOURI
| JAY BURNS | ) | ||
| ) | |||
| Complainant, | ) | ||
| ) | |||
| v. | ) | Appeal No. 18-80000 | |
| ) | Parcel/Loc. 10-4.0-19-004-002-002.000 | ||
| DANIEL WHITTLE, ASSESSOR | ) | ||
| PULASKI COUNTY, MISSOURI | ) | ||
| ) | |||
| Respondent. | ) |
DECISION AND ORDER
HOLDING
The assessment made by Daniel Whittle, Assessor of Pulaski County, Missouri (Respondent), is AFFIRMED. Complainant Jay Burns (Complainant) did not present substantial and persuasive evidence to establish the true value in money (TVM) of the subject property as of January 1, 2017.
Complainant appeared pro se.
Respondent appeared pro se.
Case heard and decided by Senior Hearing Officer John J. Treu (Hearing Officer).
ISSUE
Complainant appealed solely on the ground of overvaluation. Respondent set the TVM of the subject property at $36,000, classified as residential property. 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 this appeal to determine the TVM for the subject property as the property existed on January 1, 2017.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
FINDINGS OF FACT
- Jurisdiction over this appeal is proper. Complainant timely appealed to the STC.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on December 6, 2018, at the Pulaski County Courthouse, Waynesville, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 10-4.0-19-004-002-002.000. It is further identified as 119 Phillips Ave., St. Roberts, Missouri. (Complaint for Review)
- Description of Subject Property. The subject property consists of a 1.83 acre lot improved with two manufactured/mobile homes. At least a portion of the subject property currently has debris and waste upon it. The manufactured homes currently appear to be in somewhat of a deteriorated condition. Both water and sewer service exists on the property. Electric service exists on the property.
- Respondent initially valued the subject property at $36,000, classified as residential, as of January 1, 2017.
- Board of Equalization (BOE). No BOE proceeding occurred in that Complainant acquired an interest in the property after the deadline for filing a BOE appeal.
- Complainant’s Evidence. Complainant opined that the subject property’s TVM was somewhere between $1,188 and $10,050. To support his opinion of value, Complainant offered his written direct testimony (WDT) and exhibits:
| Exhibit | Description | Ruling |
| WDT | Jay Burns | Admitted |
| A | Plat Showing Subject Property | Admitted |
| A-1 | Enlarged Drawing | Admitted |
| B | Tax Sale Certificate of Purchase of 8/27/2018 | Admitted |
| C | Aerial Photograph of Mobile Homes | Admitted |
| D-1 | Photograph of Property from Road | Admitted |
| D-2 | Photograph of Property from Road | Admitted |
| D-3 | Photograph of Blue Mobile Home Exterior | Admitted |
| D-4 | Photograph of Blue Mobile Home Exterior | Admitted |
| D-5 | Photograph of Blue Mobile Home Interior | Admitted |
| D-6 | Photograph of Blue Mobile Home Immediate Exterior | Admitted |
| D-7 | Photograph of Debris on Subject Property | Admitted |
| D-8 | Photograph of White Mobile Home Exterior | Admitted |
| D-9 | Photograph of White Mobile Home Exterior | Admitted |
| D-10 | Photograph of White Mobile Home Immediate Exterior | Admitted |
| E | Collector Sheet Regarding Subject Property | Admitted |
| F | -No Exhibit- | |
| G | GIS Aerial Photograph of Area | Admitted |
| G-1 | Google Maps Aerial Photograph | Admitted |
| G (Expanded) | Expanded GIS Aerial Photograph of Area | Admitted |
| H | Comparable Properties to Subject Property with Data | Admitted |
| I-1 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-2 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-3 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-4 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-5 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-6 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| I-7 | Collector Data Regarding Comparables in Exhibit H | Admitted |
| X | Pulaski County, Missouri Map | Admitted |
Complainant testified that the subject property has approximately a 25% grade and that the mobile homes are extremely dilapidated with rotten floors and trash within. Complainant testified that the mobile homes are not in livable condition. Complainant testified that he has owned many properties and that he believed it would cost $2,500 per trailer to remove such; that it would cost $1,000 in labor to clean up the subject property; and that it would cost $450 for three truckloads of debris to be removed at $150 per truckload. Complainant opined that other deductions were also appropriate and that all the deductions should be taken from Respondent’s TVM. Alternatively, Complainant contended that his purchase price of $1,188 at the tax sale should be adopted as the TVM. Complainant stated the tax sale was a competitive bid tax sale in which all but one of thirty-seven properties sold. Complainant interjected the issue of misclassification at the evidentiary hearing, contending that the comparable properties had vastly different values. Complainant testified that the subject property is not being agriculturally utilized. Complainant also presented the testimony of Christine Lane (Lane), who has a desire to own the property and who testified that she is attached to the property. Lane took the photographs identified as exhibits D-1 to D-10. Lane testified she would ultimately like to live on the property. Both Complainant and Lane acknowledged that they are not appraisers.
- Respondent’s Evidence. Respondent advocated that his original valuation should be affirmed. Respondent offered the following evidence:
| Exhibit | Description | Ruling |
| 1 | Aerial Photograph of Area | Admitted |
| 2 | Aerial Photograph of Area | Admitted |
| 3 | Photograph of White Mobile Home Exterior | Admitted |
| 4 | Photograph of Blue Mobile Home Exterior | Admitted |
| 5 | Assessor Property Record Card Re: Subject Property | Admitted |
| 6 | Assessor Property Record Card Re: Other Property | Admitted |
| 7 | Assessor Property Record Card Re: Other Property | Admitted |
| 8 | Assessor Property Record Card Re: Other Property | Admitted |
| 9 | Assessor Property Record Card Re: Other Property | Admitted |
| 10 | Assessor Property Record Card Re: Other Property | Admitted |
| 11 | Assessor Property Record Card Re: Other Property | Admitted |
| 12 | Assessor Property Record Card Re: Other Property | Admitted |
| 13 | Assessor Property Record Card Re: Other Property | Admitted |
| 14 | Assessor Property Record Card Re: Other Property | Admitted |
| 15 | Assessor Property Record Card Re: Other Property | Admitted |
| 16 | Assessor Property Record Card Re: Other Property | Admitted |
| 17 | Assessor Property Record Card Re: Other Property | Admitted |
| 18 | Assessor Property Record Card Re: Other Property | Admitted |
Respondent testified that the property is located directly across the road from property which is very nice and which was developed with 4-plexes. (Exhibit G). Respondent testified that some land is valued by acreage and some by lot. Respondent also testified that the eastern portion of the subject property is fairly level. Respondent additionally testified that he is personally aware of mobile homes in worse condition than the subject property’s improvements which are being lived in. Respondent testified that many residents tip over old mobile homes and repurpose them for storage.
- TVM Not Established. Complainant’s evidence was not substantial and persuasive to establish the TVM of the subject property on January 1, 2017.
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, including the application of any abatement. 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 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.
Investigation by Hearing Officer
In order to investigate appeals filed with the Commission, the Hearing Officer may inquire of the owner of the property or of any other party to the appeal regarding any matter or issue relevant to the valuation, subclassification, or assessment of the property. Section 138.430.2 RSMo. The Hearing Officer’s decision regarding the assessment or valuation of the property may be based solely upon his inquiry and any evidence presented by the parties or based solely upon evidence presented by the parties. Id.
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon 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); Green 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.
To prove TVM, substantial and persuasive evidence must be presented. 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).
Generally, a property owner, while not an expert, is competent to testify to the reasonable market value of his own land. Cohen, 251 S.W.3d at 348-49; Carmel Energy, Inc v. Fritter, 827 S.W.2d 780, 783 (Mo. App. W.D. 1992). “However, when an owner’s opinion is based on improper elements or foundation, his opinion loses its probative value.” Carmel Energy, Inc,, 827 S.W.2d at 783. 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.” See Rossman v. G.G.C. Corp. of Missouri, 596 S.W.2d 469, 471 (Mo. App. E.D. 1980)
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 reasonable 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. Sercurity Bohomme, 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 Commission. 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 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 transaction and adjusts those prices to account for difference between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonable 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 interest;
- 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.
Discussion
Complainant’s evidence was neither substantial nor persuasive to support an opinion as to the TVM of the subject property as of January 1, 2017. Although Complainant testified about the current condition of the subject land and its improvements, Complainant presented no evidence of the condition of the property and its improvements as they existed on January 1, 2017, the applicable date of valuation. Complainant did not present evidence of the TVM of the subject property under one of the three recognized court approaches for valuation.
Within Complainant’s WDT he contended that no presumption of correctness exists regarding an assessor’s valuation and that since no BOE appeal occurred, both parties bear a burden of proof. Ultimately, to set a TVM other than that set by Respondent, substantial and persuasive evidence of the TVM of the subject property on January 1, 2017, was required. No such evidence was offered by either party.
Despite Complainant stating that no assessor presumption exists, Complainant’s deduction technique to determine a TVM depends upon the TVM set by Respondent. Speculation and conjecture would be required to make a determination of what factors and considerations were included in such valuation. Additionally, although Complainant presented his testimony as to what he believed the cost to remedy the land and improvement conditions on the subject property, Complainant failed to present any evidence of the market impact on the TVM of the condition issues of the land and improvements on the subject property, even assuming the current condition of both was the same on January 1, 2017. Such speculation and conjecture would nevertheless be improper.
Complainant’s alternative position that the tax sale purchase price of $1,188 should be the TVM, is not persuasive to the Hearing Officer. The Hearing Officer is not persuaded that the tax sale purchase was an arms-length transaction or that it represented the TVM of the subject property on January 1, 2017.
ORDER
The TVM for the subject property as determined by Respondent is AFFIRMED. The assessed value for the subject property is $6,840 ($36,000 TVM), classified as residential, as of January 1, 2017.
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, or emailed to Legal@stc.mo.gov, and a copy of said application must be sent to each person 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 Pulaski 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, January 3rd, 2019.
STATE TAX COMMISSION OF MISSOURI
John J. Treu
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been sent electronically or mailed postage prepaid this 3rd day of January, 2019, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Jacklyn Wood
Legal Coordinator