State Tax Commission of Missouri
JERI SMITH,)
)
Complainant,)
)
v.) Appeal Number 10-50503
)
DAVID STOKELY ASSESSOR,)
CHRISTIAN COUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Christian County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.True value in money for the subject property for tax year 2010 is set at $180,600, residential assessed value of $34,310.Complainant appeared pro se.Respondent appeared in person and by County Counselor John Housley.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation and discrimination, the decision of the Christian County Board of Equalization, which sustained the valuation of the subject property.The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2010; and whether there was an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2009 residential assessment ratio for Christian County.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 Christian County Board of Equalization.A hearing was conducted on December 7, 2010, at the Christian County Courthouse, Ozark, Missouri.
2.Assessment.The Assessor appraised the property under appeal at $180,600, a residential assessed value of $34,310.[1]The Board sustained the assessment.[2]
3.Subject Property.The subject property is located at 828 E. Kings Mead Circle, Unit 2, Nixa, Missouri.The property is identified by map parcel number 11-3-6-3-8-828.002.The property consists of a condominium unit with a base gross living area of 1,240 square feet and an adjusted gross living area of 1,480 square feet, built in 2007.[3]
4.Complainant’s Evidence.Ms. Smith testified in her own behalf.She gave her opinion of the fair market value of the property as of January 1, 2009, to be $140,000.[4]She purchased the property from Arvest Bank after the bank had taken the property back in foreclosure.Exhibit A tendered by Complainant was received into evidence.The Exhibit consisted of the taxpayer’s typed statement as to her position with regard to the appeal and copies of the 2009 and 2010 tax bills.[5]
There was no evidence of new construction and improvement from January 1, 2009, to January 1, 2010, therefore the assessed value for 2009 remains the assessed value for 2010.[6]
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, 2010, to be $140,000, as proposed.See, Complainant Fails to Prove Value of $140,000, infra.
Complainant’s evidence was not substantial and persuasive to rebut the presumption of correct assessment by the Board and establish an intentional plan by the assessing officials to assess the property under appeal at a ratio greater than 19% of true value in money, or at a ratio greater than the average 2009 residential assessment ratio for Christian County.See, Complainant Fails To Prove Discrimination, infra.
5.Respondent’s Evidence.Respondent presented the testimony of Marian Matthews, Deputy Assessor.She testified to the valuation history of the subject property.Respondent offered into evidence Exhibit 1[7] which was received.
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]In an overvaluation appeal, true value in money for the property being appealed must be determined based upon the evidence on the record that is probative on the issue of the fair market value of the property under appeal.
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[11]This presumption is a rebuttable rather than a conclusive presumption.It places the burden of going forward with some substantial evidence on the taxpayer – Complainant.The presumption of correct assessment is rebutted when the taxpayer 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.[12]Complainant failed to meet the required evidentiary standard that would rebut the presumption of correct assessment by the Board.Accordingly, the presumption that the fair market value of the subject property for 2009 and 2010 was $180,600 stands.
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.[13] True value in money is defined in terms of value in exchange and not value in use.[14]It is the fair market value of the subject property on the valuation date.[15]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.[16]
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.[17]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.[18] The actual sales price of a property is also a factor that may be considered to determine value.[19]
Complainant Fails to Prove Value of $140,000
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]
Owner’s Opinion
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]The basis for the owner’s opinion of the fair market value of the subject property was her comparing it with the economy and the condo development.An opinion grounded on this rational does not provide a valuation based upon proper elements or a proper foundation to arrive at a conclusion of fair market value.
Sale of Subject
Evidence of the actual sales price of property is admissible to establish value at the time of an assessment, provided that such evidence involves a voluntary purchase not too remote in time.The actual sale price is a method that may be considered for estimating true value.[26] In the present appeal, there was a sale of the property in October 2009 by the bank which had foreclose on the it.A sale of a property following a foreclosure does not automatically render that sale irrelevant to the valuation of the property.Nor does such a sale automatically nullify the purchase as meeting the Standard for Valuation.In a given case, a sale after foreclosure may establish fair market value.[27] However, in such an instance, it is necessary that evidence establishing the listing, transfer and sale history of the property be provided.[28]That evidence is lacking in this instance.[29]
Summary and Conclusion
Complainant did not present substantial and persuasive evidence to establish that the true value in money of the property under appeal as of January 1, 2009 would have been $140,000.Therefore, the Board presumption was not rebutted and the value for January 1, 2010 must be set as that placed on the property for the 2009 assessment.
Complainant Fails To Prove Discrimination
In order to obtain a reduction in assessed value based upon discrimination, the Complainant must (1) prove the true value in money of the property under appeal on January 1, 2010; and (2) show an intentional plan of discrimination by the assessing officials resulting in an assessment of that property at a greater percentage of value than other property, generally, within the same class within the same taxing jurisdiction.[30]Evidence of value and assessments of a few properties does not prove discrimination.Substantial evidence must show that all other property in the same class, generally, is actually undervalued.[31]The difference in the assessment ratio of the subject property the average assessment ratio in the subject county must be shown to be grossly excessive.[32]No other methodology is sufficient to establish discrimination.[33]
In other words, the Taxpayer has the burden to prove the level of assessment for the subject property in 2009. This is done by independently determining the market value of the subject property and dividing the market value into the assessed value of the property as determined by the assessor’s office.
Complainant must then prove the average level of assessment for residential property in Christian County for 2009.This is done by (a) independently determining the market value of a representative sample of residential properties in Christian County; (b) determining the assessed value placed on the property by the assessor’s office for the relevant year; (c) dividing the assessed value by the market value to determine the level of assessment for each property in the sample; and (d) determining the mean and median of the results. The difference between the actual assessment level of the subject property and the average level of assessment for all residential property, taken from a sufficient representative sample in St. LouisCountymust demonstrate a disparity that is grossly excessive.[34]
Complainant’s discrimination claim fails because she failed to establish the market value of her property.Without establishing market value, Ms. Smith cannot establish the assessment ratio.Without establishing the ratio, she cannot establish that she is being assessed at a higher percentage of market value that any other property.
However, even if Ms. Smith had established the market value of the subject property, her discrimination claim would still fail because it was not demonstrated that a statistically significant number of other residential properties within Christian County are being assessed at a lower ratio of market value than the property that is the subject of this appeal.Complainant’s claim of discrimination is based upon her opinion as expressed in Exhibit A and her testimony that a person pays more taxes on a condo than on a non-condo home.This conclusion was reached by Ms. Smith because of the difference in taxes between her prior home and the subject condo.This is not a basis upon which a claim of discrimination can be established.
Because Complainant failed to establish the market value of her property and to establish that the property was being assessed at a higher percentage of market value than a statistically significant number of other properties in Christian County, Ms. Smith failed to prove discrimination.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Christian County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2010 is set at $34,310.
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.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 application for review is based will result in summary denial. [35]
Disputed Taxes
The Collector of Christian 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.If no Application for Review is filed with the Commission within thirty days of the mailing date set forth in the Certificate of Service, the Collector, 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.
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 24, 2011.
STATE TAX COMMISSION OFMISSOURI
_____________________________________
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 January, 2011, to:Jeri Smith, 828 E. Kings Mead Cir. Unit 2, Nixa, MO 65714, Complainant; John Housley, 901 St. Louis, 20th Floor, Springfield, MO 65806, Attorney for Respondent; David Stokely, Assessor, 100 W. Church, Room 301, Ozark, MO 65721-0334; Kay Brown, Clerk, 100 W. Church, Room 206, Ozark, MO 65721-0549; Ted Nichols, Collector, P.O. Box 579, Ozark, MO 65721.
___________________________
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] Residential property is assessed at 19% of true value in money (fair market value) – Section 137.115.5(1), RSMo.
[4] Property appealed in an even numbered year is to be valued as it existed on January 1st of the even-numbered year, based upon the economic conditions existing as of January 1st of the prior odd-numbered year.Section 137.115.1 RSMo.
[5] Tax Bills provide no basis upon which a determination of true value in money can be made, nor a basis to establish a claim of discrimination.
[7] Exhibit 1 consisted of a summary of the assessment history of the property, photographs and a floor plan of the subject, a listing sheet giving Base Prices for condo units in the subject development, the sales letter provided by Complainants on the subject property, a copy of the warranty deed transferring the property from Arvest Bank to Complainant, the property record card for the subject, a listing of properties in the subject development showing sales prices and dates for 15 properties, and a copy of a portion of section 137.115.1 RSMo high-lighting that the value for the even -numbered year remains the same as the value for the preceding odd -numbered year, absent new construction and improvement.
[11] 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)
[12] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[13] 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).
[14] 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).
[16] 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.
[17] 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).
[18] 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).
[28] See, Van Lam – Finding of Fact 5 – Listing, Transfer and Sale History of Subject, and Sale After Foreclosure