STATE TAX COMMISSION OF MISSOURI
|JOHN E. & KATHLEEN SIEBEL,||)
|v.||)||Appeal No. 17-10778|
|Parcel/Locator No. 26L520884|
|JAKE ZIMMERMAN, ASSESSOR,||)|
|ST. LOUIS COUNTY, MISSOURI,
DECISION AND ORDER
The decision of the St. Louis County Board of Equalization (BOE) is AFFIRMED. Complainants John E. and Kathleen Siebel did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
Complainant John E. Siebel (Complainant) appeared pro se; Complainant Kathleen Siebel appeared not.
Respondent Jake Zimmerman, Assessor, St. Louis County, Missouri, (Respondent) appeared by counsel Steve Robson.
Case heard and decided by Senior Hearing Officer Amy S. Westermann (Hearing Officer).
Complainant appealed on the ground of overvaluation. Respondent initially set the true value in money (TVM) of the subject property at $358,000, as residential property, as of January 1, 2017. The BOE valued the subject property at $337,000, thereby lowering Respondent’s valuation. The State Tax Commission (STC) takes this appeal to determine the TMV for the subject property as of 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. Jurisdiction over this appeal is proper. Complainant timely appealed to the State Tax Commission.
- Evidentiary Hearing. The issue of overvaluation was presented at an evidentiary hearing on May 15, 2018, at the St. Louis County Government Building, 41 South Central Avenue, Clayton, Missouri.
- Identification of Subject Property. The subject property is identified by parcel/locator number 26L520884. It is further identified as 9329 Buxton Drive, Crestwood, St. Louis County, Missouri. (Exhibit A; Exhibit 1)
- Description of Subject Property. The subject property consists of 20,500 square feet of land (slightly less than half of one acre) improved by a 2,517 square-foot (total living area), single-family, ranch-style home built in 1972. (Exhibit A; St. Louis County Records database) The home includes three bedrooms; two full bathrooms; one half bathroom; a full basement; two fireplaces; an attached two-car garage; two patios; a wood deck; an in-ground pool; and a brick exterior. (Exhibit A; St. Louis County Records database) Respondent assigned the home a grade factor of C+ and a condition/desireability/utility (CDU) rating of good. (Exhibit A; St. Louis County Property Records Database)
- Assessment. Respondent set a TVM for the subject property of $358,000, residential, as of January 1, 2017.
- Board of Equalization. The BOE set a TVM of the subject property at $337,000, residential, as of January 1, 2017.
- Complainants’ Evidence. Complainant opined that the TVM of the subject property was $282,500 as of January 1, 2017. To support his opinion of value, Complainant offered the following exhibits:
|Exhibit A||Comparative analysis of subject property and other properties on same street showing percent increase in appraised value from 2015 to 2017 with an average increase of 16.18% and percent increase in appraised value of subject property from 2015 to 2017 of 39.37%; argument that the value of the subject property should be discounted 8.92% to bring the valuation in line with the other properties on the same street; Real Estate Information data for subject property and other properties on same street obtained from St. Louis County public information database|
|Exhibit B||Comparative analysis of comparable properties used by Respondent’s mass appraisal system in generating the initial valuation of the subject property showing a “discounted amount” between the sale price and the 2017 assessed value; argument that the “average discount is 8.92% for the comparable sales properties”|
Respondent did not object to Complainant’s exhibits, all of which were admitted into the record.
Complainant testified that he had purchased the subject property in 1993 for $175,000. Complainant testified that the subject property had been listed with a realtor and that it had been publicly advertised. Complainant testified that the subject property was not encumbered by a mortgage. Complainant testified that he had not listed the subject property for sale within the three years preceding the evidentiary hearing and, if he were to list the subject property for sale, he would list it for $337,000. Complainant testified that the only offers to purchase the property he had received were unsolicited brochures. Complainant testified that the property had not been appraised in the three years preceding the evidentiary hearing and that he had not made any improvements to the subject property between January 1, 2015, and January 1, 2017.
- Respondent’s Evidence. Respondent advocated sustaining the BOE’s determination of TVM, $337,000. To support his opinion of value, Respondent offered the following exhibit:
|Exhibit 1||Findings and Notice of Decision of BOE dated September 20, 2017|
Complainant did not object to Respondent’s exhibit, which was admitted into the record.
- Presumption of Correct Assessment Rebutted. Complainant did not present substantial and persuasive evidence to rebut the presumption of correct assessment by the BOE.
CONCLUSIONS OF LAW AND DECISION
The STC 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 BOE, 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 (2000) as amended.
Investigation by Hearing Officer
In order to investigate appeals filed with the STC, 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 (2000) as amended. 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.
Board Presumption and Computer-Assisted Presumption
There exists a presumption of correct assessment by the BOE – the BOE presumption. There also exists by statutory mandate a presumption that the assessor’s original valuation was made by a computer, computer-assisted method or a computer program – the computer-assisted presumption. These two presumptions operate with regard to the parties in different ways.
The BOE presumption operates in every case to require the taxpayer to present substantial and persuasive evidence to rebut it. If Respondent is seeking to prove a value different than that set by the BOE, then Respondent is required to rebut the BOE presumption.
The computer-assisted presumption only comes into play if the BOE lowered the value of the assessor and Respondent is seeking to sustain the original assessment and it has not been shown that the assessor’s valuation was not the result of a computer-assisted method. The BOE valuation is assumed to be an independent valuation.
In the present appeal, the BOE determined the TVM of the subject property to be $337,000, thereby lowering the initial valuation of Respondent, which was a result of a computer-assisted method of valuation. Complainant is now seeking to lower the BOE’s valuation; therefore, the BOE presumption applies to Complainant. The computer-assisted presumption is not applicable in this case.
Presumption In Appeal
There is a presumption of validity, good faith, and correctness of assessment by the BOE. 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). This presumption is a rebuttable rather than a conclusive presumption. It places the burden of going forward with some substantial evidence on the taxpayer – the complainant. When some substantial evidence is produced by the complainant, “however slight,” the presumption disappears, and the Hearing Officer, as trier of facts, receives the issue free of the presumption. United Missouri Bank of Kansas City v. March, 650 S.W.2d 678, 680-81 (Mo. App. 1983), citing to State ex rel. Christian v. Lawry, 405 S.W.2d 729, 730 (Mo. App. 1966) (and cases therein cited). The presumption is not evidence of value. The presumption of correct assessment is rebutted when the taxpayer presents substantial and persuasive evidence to establish that the BOE’s valuation is erroneous and the TVM that should have been placed on the property. Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. See, Cupples-Hesse, supra. 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).
Complainant’s Burden of Proof
To obtain a reduction in assessed valuation based upon an 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); Greene 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.
“’True value’ is never an absolute figure, but is merely an estimate of the fair market value on the valuation date.” Drury Chesterfield, Inc., v. Muehlheausler, 347 S.W.3d 107, 112 (Mo. App. E.D. 2011), citing St. Joe Minerals Corp. v. State Tax Comm’n of Mo., 854 S.W.2d 526, 529 (Mo. App. E.D. 1993). “Fair market value typically is defined as the price which the property would bring when offered for sale by a willing seller who is not obligated to sell, and purchased by a willing buyer who is not compelled to buy.” Drury Chesterfield, Inc., 347 S.W.3d at 112 (quotation omitted).
There is no presumption that the taxpayer’s opinion is correct. The taxpayer in a STC 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 STC “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).
Respondent’s Burden of Proof
Respondent, when advocating a value different from that determined by the original valuation or a valuation made by the BOE, 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. Hermel, Inc., 564 S.W.2d at 895; Cupples-Hesse, 329 S.W.2d at 702; Brooks, 527 S.W.2d at 53.
In this case, Respondent advocated upholding the BOE’s valuation and, therefore, was not required to present evidence.
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 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. 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).
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).
In this case, neither Complainant nor Respondent presented expert testimony or evidence.
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 used 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 transactions and adjusts those prices to account for differences between the properties. Id. at 348. “Comparable sales consist of evidence of sales reasonably 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 interests.
- 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.
In this case, Complainant did not present substantial and persuasive evidence to rebut the presumption that the BOE’s determination of the TVM of the subject property was correct. Substantial evidence can be defined as such relevant evidence that a reasonable mind might accept as adequate to support a conclusion. Cupples Hesse Corp., 329 S.W.2d at 702. 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.
Notably, Complainant did not present evidence using one or more of the three court-approved approaches to valuing property to support his opinion that the TVM of the subject property was $282,500 as of January 1, 2017.
Exhibit A contained information regarding the 2015 and 2017 appraised values of nine properties located on the same street as the subject property. Exhibit A calculated the percent increase between the 2015 and 2017 appraised values and calculated the properties’ prices per square foot. Exhibit B contained information regarding the sale dates, prices, and 2017 assessments of five properties used by Respondent’s mass appraisal system in the initial assessment. These exhibits do not establish the TVM of the subject property or provide a basis for reducing the BOE’s determination of the subject property’s TVM.
Eight of the nine properties in Exhibit A were located on the same street as the subject property and were ranch-style homes that had been built in the 1960s, about 12 years before the subject property was built. The remaining comparable property in Exhibit A was built in 2001. Exhibit A presented raw data. Exhibit A did not utilize market-based dollar adjustments to account for similarities and differences between the comparable properties and the subject property in order to persuade the factfinder that the subject property should have been valued at $282,500. To the extent that Complainant argued the percent increase in the appraised value of the subject property from 2015 to 2017 was unfair when compared to the percent increase in the appraised values of the properties in Exhibit A, such argument does not establish the TVM of the subject property. It is not one of the three court-approved approaches to determining the fair market value of real property. Such argument also presumes that the properties were valued correctly in 2015 and that all of the properties should appreciate by a particular percent. This also is not one of the three court-approved approaches to determining the fair market value of real property.
Respondent’s computerized mass appraisal system analyzed the five properties in Exhibit B to initially value the subject property for the 2017 tax cycle. Complainant presented Exhibit B in conjunction with his argument that the subject property should be assessed at a “discount” of 8.92% below TVM to keep the subject property’s valuation in line with the difference between the sale price of those five properties and their 2017 assessed values. This argument is without merit. The BOE has a legal duty to determine all appeals from the valuation of property made by the assessor and to correct or adjust the assessment accordingly. Section 138.060 RSMo 2000 (as amended). According to the record before the Hearing Officer, the BOE reduced Respondent’s initial valuation by $21,000, a reduction of approximately 6%. This correction or adjustment of the initial assessment implies that the BOE believed the five properties used by the computerized mass appraisal system were not accurate indicators of the subject property’s TVM, causing the BOE to disregard those five properties when determining the subject property’s TVM.
The TVM for the subject property as determined by the BOE is AFFIRMED. The assessed value for the subject property for tax year 2017 is set at $64,030 residential ($337,000 TVM).
Application for Review
A party may file with the STC 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. Section 138.432, RSMo
The Collector of St. Louis 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 3rd , 2018.
STATE TAX COMMISSION OF MISSOURI
Amy S. Westermann
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 July, 2018, to: Complainants(s) counsel and/or Complainant, the County Assessor and/or Counsel for Respondent and County Collector.