Jeff & JoAnn Durfee v. Harmison (Daviess)

February 26th, 2008

State Tax Commission of Missouri






v.)Appeal Number 07-54500











The decision of the Board of Equalization, setting value at $171,000, or 50% of projected value of the completed structure, (assessed value $35,560) for tax year 2007 is SET ASIDE.The Commission finds the correct market value of the subject property, as completed, to be $330,000.Value for 2007 at 50% complete is $165,000 (assessed value $31,350).Value for 2008 at 100% complete is $330,000 (assessed value $62,700).


The issue in this case is the true market value of residential real property for tax years 2007 and 2008.


The subject property is a residence, construction of which was approximately 50% complete on January 1, 2007, and almost 100% complete on January 1, 2008.For tax year 2007, said property initially had an assessed value of $59,910.After appeal, the assessor recommended that the Board of Equalization reduce said value based upon a determination that said property was 50% complete on the tax day, indicating a taxable value of $171,000 (assessed value $35,560).[Full value = $342,000]Complainants appeal asserting a taxable value of $139,500 (assessed value $26,505).[Full value $279,000].An evidentiary hearing was held on December 19, 2007 in the Daviess County Courthouse before senior hearing officer Luann Johnson.Complainants appeared pro se.Respondent appeared by counsel, Annie Gibson, Daviess County Prosecuting Attorney.


The following exhibits were entered into the record:

Complainants’ Exhibits

Exhibit 1 –Appraisal report of James D. Rippy indicating a market value of$357,000, which includes 40 acres of land

Exhibit 2 – Closing statement showing a purchase price of $339,150

Respondent’s Exhibit

Exhibit A –Appraisal report of William R. Keck showing value of house and one acre at $330,000

Exhibit B ­-New construction questionnaire showing construction costs of $300,000


1.Jurisdiction is proper.Complainants timely filed their appeal from the decision of the Daviess County Board of Equalization.

2.The subject property is an 80 acre tract.Said tract consists of 79 acres of agricultural land valued at $21,340 (assessed value $2,560).The value of the agricultural land is not in dispute.The property also contains a one acre home site and a new one and one half story home containing 2,178 square feet of living area over a 1,274 square foot basement.The home has a two-car garage and three decks or porches.It is good quality construction in good condition.On the January 1, 2007, tax day the improvements were approximately 50% complete.On the January 1, 2008, tax day the improvements were almost 100% complete, but the property still needed landscaping and one bathroom still needed tile.The property is identified as parcel number 19-7.1-26-02.01, more commonly known as 32298 State Highway CC, Hamilton, Daviess County, Missouri.

3.Respondent’s appraiser found sales of three similar homes which sold for $279,110; $434,000; and $380,000.Respondent’s appraiser adjusted for site size; design; number of bathrooms; square footage; basement finish; number of garages and other amenities.After adjustments, these properties indicated a range of value for the subject property between $289,785 and $363,200.Gross adjustments ranged from 12.4% to 23.3%.Based upon these sales, Respondent’s appraiser determined a market value for the subject property, if completed, of $330,000 on January 1, 2007.

Respondent’s evidence is based upon sound appraisal methodology, is substantial and persuasive, overcomes the presumption in favor of the Board of Equalization, and justifies setting aside the value determined by the Board of Equalization.

4.Complainants’ appraisal report was generated for loan purposes prior to the construction of the subject home.It was “based upon an interview with the home builder and communicated plans/specs provided to the appraiser.”Exhibit 1.Comparables included two sales in Excelsior Springs, Missouri, some 24 miles away from the subject property.

Complainants’ appraisal report is not entitled to as much weight as Respondent’s appraisal report because Respondent’s appraiser valued the actual existing improvements while Complainants’ appraiser was only able to value hypothetical improvements.Complainants’ evidence does not rise to the level of substantial and persuasive.

5.The correct value for the residential property on January 1, 2007, is $165,000 (assessed value $31,350).Value for 2008 at 100% complete is $330,000 (assessed value $62,700).Additionally, the agricultural land has a value of $21,340 (assessed value $2,560).

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Highest and Best Use

True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.Aspenhof Corp. v. State Tax Commission, 789 S.W.2d 867, 869 (Mo. App. 1990).

It is true that property can only be valued according to a use to which the property is readily available.But this does not mean that in order for a specific use to be the highest and best use for calculating the property’s true value in money, that particular use must be available to anyone deciding to purchase the property. . . .A determination of the true value in money cannot reject the property’s highest and best use and value the property at a lesser economic use of the property.Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d. 341, 348-349 (Mo. 2005).

True Value in Money

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 purchased by one who is desiring to purchase but who is not compelled to do so.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).It is the fair market value of the subject property on the valuation date.Hermel, Inc. v. State Tax Commission, 564 S.W.2d 888, 897 (Mo. banc 1978).

Taxpayer has Burden of Proof

To prevail, Taxpayers had to “present an opinion of market value and then … present substantial and persuasive evidence that the proposed value is indicative of the market value of the subject property on tax day.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. 2002).

Substantial and Persuasive Evidence

Substantial evidence is that evidence which, if true, has probative force upon the issues, i.e., evidence favoring facts which are such that reasonable men may differ as to whether it established them, and from which the Commission can reasonably decide an appeal on the factual issues.Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).

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.Brooks v. General Motors Assembly Division, 527 S.W.2d 50, 53 (Mo. App. 1975).

Comparable Sales Approach

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.Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.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.Snider v. Casino Aztar/Aztar Missouri Gaming Corp., 156 S.W.3d 341, 347-348 (Mo. 2005). (citations omitted).


The taxpayers had the burden of presenting substantial and persuasive evidence to overcome the presumption in favor of the Board of Equalization’s value.The taxpayers have failed to meet their burden of proof.The appraisal report submitted by Complainants was prepared before the property was constructed.That appraisal report was created for the purposes of financing.It does not reflect any subsequent changes which might have occurred in the construction of the improvements and, indeed, is not intended for that purpose.We cannot find that an appraisal of a hypothetical house is more accurate than the appraisal of the actual house, as prepared by Respondent’s appraiser.Therefore, we find that the evidence presented by Respondent’s appraiser is more persuasive.

When Respondent proposes a value different from the value determined by the Board of Equalization, she has the same burden as the taxpayers.She must present substantial and persuasive evidence tending to show that the value she is now recommending is accurate.Respondent’s appraisal report rises to the level of substantial and persuasive evidence and indicates a market value for the residential improvements, as completed, of $330,000.

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The assessed value determined by the Board of Equalization, is SET ASIDE.The assessed value of the agricultural land remains the same at $2,560.However, the Clerk is instructed to put a new assessed value, for the residential land and improvements, on the books.The new assessed value for tax year 2007 is $31,350.Assessed value for 2008 is $62,700.

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 Daviess 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 February 26, 2008.


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Luann Johnson

Senior Hearing Officer





Certificate of Service


I hereby certify that a copy of the foregoing has been mailed postage prepaid this 26thday of February, 2008, to:Jeff Durfee, 32298 Highway CC, Hamilton, MO 64644, Complainant, Annie Gibson, Prosecuting Attorney, 102 N. Main, Gallatin, MO 64640, Attorney for Respondent; Betty Harmison, Assessor, 102 N. Main, First Floor, Gallatin, MO 64640; Linda Steward, Clerk, 102 N. Main, Second Floor, Gallatin, MO 64640; Rita Rains, Treasurer and ex officio Collector, 102 N. Main, Gallatin, MO 64640.






Barbara Heller

Legal Coordinator