State Tax Commission of Missouri
JEREMY & BRANDI SMITH, )
)
Complainants, )
)
v. ) Appeal No. 12-89516
)
JAMES STRAHAN, ASSESSOR, )
TANEY COUNTY, MISSOURI, )
)
Respondent. )
DECISION AND ORDER
HOLDING
Decisions of the Taney County Assessor are SET ASIDE. Complainants presented substantial and persuasive evidence to establish the true value in money for the subject lots.
True value in money for the subject properties for tax years 2011 and 2012 is set at $12,300, per lot, residential assessed value of $2,340, per lot.
Complainants appealed pro se.
Respondent represented by Counsel, Jason Coatney, Keck Austin, Springfield, Missouri.
Case decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainants appeal, on the ground of overvaluation, the assessments of the Taney Assessor. The Commission takes this appeal to determine the true value in money for the subject properties on January 1, 2011.[1] 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.[2]
2. Submission on Documents. By Order dated 4/15/13, the parties were to inform the Hearing Officer in writing if either party desired to have an evidentiary hearing. Complainants by their letter dated 6/27/13, advised they were not requesting a hearing, but agreed to have the decision basis on the appraisal which they submitted. Counsel for Respondent by email, dated 7/11/13 waived cross examination of Complainants’ appraiser. Accordingly, evidentiary hearing was waived and the case is taken up for decision on the exhibits filed by Complainants.
3. Identification and Description of Subject Properties. The subject properties consist of eight residential lots in the Mills Hollow development of Branson, Taney County, Missouri. The individual lots are further described and identified as follows:[3]
|
LOT |
PARCEL |
ACRES |
ASSESSED |
APPRAISED |
|
13 |
07-6.0-14-009.013 |
5.00 |
$4,750 |
$25,000 |
|
15 |
07-6.0-14-009.015 |
5.08 |
$4,750 |
$25,000 |
|
16 |
07-6.0-14-009.016 |
5.03 |
$4,750 |
$25,000 |
|
19 |
07-6.0-14-009.019 |
5.00 |
$4,750 |
$25,000 |
|
20 |
07-6.0-14-009.020 |
5.01 |
$4,750 |
$25,000 |
|
21 |
07-6.0-14-009.021 |
5.01 |
$4,750 |
$25,000 |
|
22 |
07-6.0-14-009.022 |
5.42 |
$4,750 |
$25,000 |
|
42 |
07-6.0-14-009.042 |
5.74 |
$8,930 |
$47,000 |
4. Complainants’ Evidence. Complainants offered into evidence: (1) Exhibit A – Appraisal of Gerald Curbow, of Lot 22; and (2) Exhibit B – Statement of Basis of Value. Exhibits A and B are received into evidence.
5. Exhibit A – Conclusion of Value. Exhibit A concluded a per lot value of $12,300 for Lot 22, which the appraiser felt was representative of the value for each lot, variances in size and topography notwithstanding.[4] The per lot value is set at $12,300, an assessed residential value of $2,340.[5] See, Complainants Prove Value, infra.
6. No Evidence of New Construction & Improvement. There was no evidence of new construction and improvement from January 1, 2011, to January 1, 2012, therefore the assessed value for 2011 remains the assessed value for 2012.[6]
7. Respondent’s Evidence. Respondent elected to present no evidence on the issue of value of the properties under appeal.[7]
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.[8]
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.[9] The constitutional mandate is to find the true value in money for the property under appeal. By statute real and tangible personal property is assessed at set percentages of true value in money.[10]
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.[11] True value in money is defined in terms of value in exchange and not value in use.[12] It is the fair market value of the subject property on the valuation date.[13] 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.[14]
Complainants’ appraiser valued the subject lots under the Standard For Valuation.[15]
Weight to be Given Evidence
The Hearing Officer is not bound by any single formula, rule or method in determining true value in money, but is free to consider all pertinent facts and estimates and give them such weight as reasonably 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.[16]
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 he may deem it entitled to when viewed in connection with all other circumstances. The Hearing Officer is not bound by the opinions of experts who testify on the issue of reasonable value, but may believe all or none of the expert’s testimony and accept it in part or reject it in part.[17] The conclusion of value established by the appraiser received into evidence on behalf of Complainants was persuasive to establish the value for the lots under appeal.
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.[18] 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.[19] Complainants’ appraiser valued the example lot relying on the sales comparison approach.
Complainants Prove Value
In order to prevail, Complainants 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, 2011.[20] Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[21] 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.[22]
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.”[23] A valuation which does not reflect the fair market value (true value in money) of the property under appeal is an unlawful, unfair and improper assessment.
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] Complainants presented the appraisal as their basis of value for the subject lots. Exhibit B established that in the opinion of the appraiser the value of $12,300 per lot was very close to the same value as it would have been on 1/1/11. There was no evidence to counter this opinion. Complainants opinion of value being based on the appraisal is based upon proper elements and a proper foundation. Accordingly, it meets the evidentiary burden of being substantial and persuasive and thereby establishing the value proposed for the subject lots.
ORDER
The assessed valuations for the subject properties as determined by the Assessor for the subject tax day are SET ASIDE.
The assessed value for the subject properties for tax year 2012 is set at $2,340, per lot.
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. [26]
Disputed Taxes
The Collector of Taney 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 July 24, 2013.
STATE TAX COMMISSION OF MISSOURI
_____________________________________
W. B. Tichenor
Senior Hearing Officer
Certificate of Service
I hereby certify that a copy of the foregoing has been mailed postage prepaid on this 24th day of July, 2013, to: Brandi Smith, 175 Mesquite Drive, Branson, MO 65616, Complainant; Jason Coatney, 3140 E. Division, Springfield, MO 65802, Attorney for Respondent; James Strahan, Assessor, P.O. Box 612, Forsyth, MO 65653; Donna Neeley, Clerk, P.O. Box 156, Forsyth, MO 65653; Sheila Wyatt, Collector, P.O. Box 278, Forsyth, MO 65653.
___________________________
Barbara Heller
Legal Coordinator
Contact Information for State Tax Commission:
Missouri State Tax Commission
301 W. High Street, Room 840
P.O. Box 146
Jefferson City, MO 65102-0146
573-751-2414
573-751-1341 Fax
[1] The value as of 1/1/11 remains the value as of 1/1/12 unless there is new construction and improvement to the property. Section 137.115.1, RSMo.
[2] Complainants purchased the subject lots in June, 2012, less than thirty days before the deadline for appealing to the Board of Equalization. Appeal directly to the Commission was proper. 12 CSR 30.010 (1) (B) 1 (b)
[3] Copies of Tax Bills, attached to Complaint for Review of Assessment. Appraised value calculated by dividing the assessed value by 19% (statutory residential assessment ratio – 137.115.5, RSMo) and rounding to the nearest $10.
[7] When Respondent fails to offer evidence of value, he appears to consent to the value presented by Complainant’s prima facie case (qui tacet consentire videtur – a party who is silent appears to consent).
[10] 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.
[11] 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).
[12] Daly v. P. D. George Company, et al, 77 S.W.3d 645, 649 (Mo. App E.D. 2002), citing, Equitable Life Assurance Society v. STC, 852 S.W.2d 376, 380 (Mo. App. 1993); citing, Stephen & Stephen Properties, Inc. v. STC, 499 S.W.2d 798, 801-803 (Mo. 1973).
[14] 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.
[16] St. Louis County v. Security Bonhomme, 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).
[17] St. Louis County v. Boatmen’s Trust Co., 857 S.W.2d 453, 457 (Mo. App. E.D. 1993); Vincent by Vincent v. Johnson, 833 S.W.2d 859, 865 (Mo. 1992); Beardsley v. Beardsley, 819 S.W.2d 400, 403 (Mo. App. 1991); Curnow v. Sloan, 625 S.W.2d 605, 607 (Mo. banc 1981).
[18] 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).
[19] 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, Cupples-Hesse, supra.
Substantial and persuasive evidence is not an extremely high standard of evidentiary proof. It is the lowest of the three standards for evidence (substantial & persuasive, clear and convincing, and beyond a reasonable doubt). It requires a small amount of evidence to cross the threshold to rebut the presumption of correct assessment by the Board. The definitions, relevant to substantial evidence, do not support a position that substantial and persuasive evidence is an extremely or very high standard.
“Substantial evidence: Evidence that a reasonable mind would accept as adequate to support a conclusion; evidence beyond a scintilla.” Black’s Law Dictionary, Seventh Edition, p. 580.
The word scintilla is defined as “1. a spark, 2. a particle; the least trace.” Webster’s New World Dictionary, Second College Edition. Black’s definition at 1347 is “A spark or trace <the standard is that there must be more than a scintilla of evidence>.” There must be more than a spark or trace for evidence to have attained the standard of substantial. Once there is something more than a spark or trace the evidence has reached the level of substantial. Substantial evidence and the term preponderance of the evidence are essentially the same. “Preponderance of the evidence. The greater weight of the evidence; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.” Black’s at 1201. Substantial evidence is that a reasonable mind would accept as adequate to support the conclusion. Preponderance is sufficient to incline a fair and impartial mind to one side of the issue rather than the other, i.e. support the proposed conclusion.
[23] 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).