State Tax Commission of Missouri
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JOHN KNIGHT, |
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Complainant, |
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v. |
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Appeal No.13-75000 |
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CHARLES ALFORD, ASSESSOR, |
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OREGON COUNTY, MISSOURI, |
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Respondent. |
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DECISION AND ORDER
HOLDING
Decision of the Oregon County Board of Equalization sustaining the assessment made by the Assessor is AFFIRMED.Complainant failed to present substantial and persuasive evidence to rebut the presumption of correct assessment by the Board of Equalization.
True value in money for the subject property for tax years 2013 and 2014 is set at $91,300, residential and $20,430, agricultural, total combined assessed value of $19,810.
Complainant appeared Pro Se.
Respondent appeared Pro Se.
Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
Complainant appeals, on the ground of overvaluation, the decision of the Oregon 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 1,2013.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 Oregon County Board of Equalization.
2.Evidentiary Hearing.The Evidentiary Hearing was held on January 7, 2014, at the Oregon County Courthouse, Alton, Missouri.
3.Identification of Subject Property.The subject property is identified by map parcel number 12-6.0-24-0-000-0002.00000, Assessor’s Account No. 01-02473.000.It is located at RR # 2, Box 2449, Alton, Missouri.[1]
4.Description of Subject Property.The subject property consists of a 105 acres improved by single-family home.[2]
5.Assessment.The Assessor appraised the residential portion of the property at $91,300, an assessed residential value of $17,347; and the agricultural portion of the property at $20,530, an assessed agricultural value of $2,463.The Board of Equalization sustained the assessment.[3]
6.Complainant’s Evidence.The following exhibits were received into evidence on behalf of Complainant.
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EXHIBIT |
DESCRIPTION |
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A |
Bid for Replacement of Shingles, dated 9/3/10 |
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Bid for Metal Roofing, dated 7/7/10 |
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C |
2013 Real Estate Tax Receipt |
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D |
2012 Real Estate Tax Receipt |
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E |
Statement of Basis of Value |
Complainant did not challenge the agricultural assessment.He challenged only the residential assessment.His opinion of value of the residential part of his property was $89,370.This was based on that being the value set by the Assessor for the 2011-12 assessment on the property.
7.No Evidence of New Construction & Improvement.There was no evidence of new construction and improvement from January 1, 2013, to January 1, 2014; therefore, the assessed value for 2013 remains the assessed value for 2014.[4]
8.Presumption of Correct Assessment Not Rebutted.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, 2013, to be $89,370, as proposed.See, Presumption In Appeal and Complainant Fails To Prove Value, infra.
9.Respondent’s Evidence.Respondent offered into evidence Exhibit 1 – Property Record Card, and Exhibit 2 – Statement of Basis of Value.Both exhibits were received into evidence.
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.[5]
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.[6]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.[7]
Presumption In Appeal
There is a presumption of validity, good faith and correctness of assessment by the County Board of Equalization.[8]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 is not evidence of value.
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.[9]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[10]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.[11]
Complainant’s evidence was not sufficient to rebut the presumption of correct assessment by the Board and establish that the value of his property as of 1/1/13 was $89,370.See, Complainant Failed To Prove Value, infra.
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.[12]True value in money is defined in terms of value in exchange and not value in use.[13]It is the fair market value of the subject property on the valuation date.[14]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.[15]
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.[16]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.[17]Complainant did not present any evidence to establish the fair market value of the subject property relying on accepted appraisal methodology.
Complainant Fails To Prove Value
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, 2013.[18]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.”[19]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.[20]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[21]Mr. Knight’s opinion of value is simply based upon the prior year assessment.This is not shown under the facts of this case to be an opinion based upon proper elements and a proper foundation.Therefore, no probative weight can be accorded the owner’s opinion.
The gist of this case is quite simple.The taxpayer replaced his approximately twenty year old shingles with a metal roof or metal shingles.The assessor increased the valuation of Complainant’s property due to this by $1,930, an increase in assessed value over the prior assessment cycle of $367.
Mr. Knight is of the opinion that metal roofing does not enhance the value of his home.The taxpayer missed the point that the Hearing Officer has to address on two fronts.First, the issue is not whether the metal roofing increase, decreased or had no effect on the value of his home, the issue is what a willing buyer and seller would have paid for the residential portion of the property as it existed (with a metal roof) on 1/1/13.There is no evidence in the record from which the Hearing Officer can draw any conclusion favorable to the owner’s opinion of value.
The second matter which the taxpayer misses is that if one only focuses on the issue of the roofing material, the question becomes whether a new metal roof is more valuable in the market under a hypothetical sale of the Knight home on 1/1/13 than a twenty year old asphalt shingle roof?Here also, there is no evidence that the Hearing Officer has to prove anything one way or the other.The Hearing Officer is persuaded that prospective purchasers, irrespective of Mr. Knight’s view that a metal roof detracts from the value of his home, would consider a new metal roof to contribute more value to the house than a twenty year old shingle roof.While it might be true that a home with a new asphalt shingle room would bring more than the same home with a metal shingle roof, that is not the issue presented in this case.
In summary, Mr. Knight failed to present evidence to establish the fair market value of his home as of 1/1/13 to be $89, 370.Therefore, the value set by the Assessor and sustained by the Board must be affirmed.
ORDER
The assessed valuation for the subject property as determined by the Assessor and sustained by the Board of Equalization for Oregon County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax years 2013 and 2014 is set at $19,810.
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. [22]
Disputed Taxes
The Collector of Oregon 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 March 5, 2014.
STATE TAX COMMISSION OF MISSOURI
W. B. Tichenor
Senior Hearing Officer
[1] Complaint for Review of Assessment; Notice of Change in Assessed Value, attached to Complaint Form.
[3] Exhibit 1; Notice of Change in Assessment – Attached to Complaint for Review of Assessment; Exhibit C
[7] 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
[8] 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)
[9] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959)
[10] 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 1201Substantial 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.
[12] 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)
[13] 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)
[15] 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] 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).
[17] 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).
[19] 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)
[20] 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)
[21] 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).