State Tax Commission of Missouri
JOHN W. SAND,)
)
Complainant,)
)
v.) Appeal No.08-60000
)
KAY CHILTON, ASSESSOR,)
HICKORYCOUNTY, MISSOURI,)
)
Respondent.)
DECISION AND ORDER
HOLDING
Decision of the Hickory County Board of Equalization reducing the assessment made by the Assessor is AFFIRMED.Complainant did not rebut the presumption of correct assessment by the Board. True value in money for the subject property for tax year 2008 is set at $106,580, residential assessed value of $20,250.Complainant appeared pro se.Respondent appeared in person and by Prosecuting Attorney, James Hackett.Case heard and decided by Senior Hearing Officer W. B. Tichenor.
ISSUE
The Commission takes this appeal to determine the true value in money for the subject property on January 1, 2007.
SUMMARY
Complainant appeals, on the ground of overvaluation, the decision of the Hickory County Board of Equalization, which reduced the valuation of the subject property.The Assessor determined an appraised value of $108,380, assessed value of $20,590, as residential property.The Board reduced the value by $1,800 to $106,580, assessed value of $20,250, to account for the condition of the Complainant’s detached garage.Complainant proposed a value of $93,000, assessed value of $17,670 on his Complaint for Review of Assessment.A hearing was conducted on November 25, 2008, at the Hickory County Courthouse, Hermitage, Missouri.
The Hearing Officer, having considered all of the competent evidence upon the whole record, enters the following Decision and Order.
Complainant’s Evidence
Mr. Sands testified in his own behalf.His opinion of value was based on a conversation with a local banker who stated that he would not loan more than the low $90,000’s on the subject property.The following exhibits were received into evidence on behalf of Complainant.
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EXHIBIT |
DESCRIPTION |
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A |
Photographs of the subject garage |
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B |
Estimates for Repairs to subject garage |
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C |
Assessment history and property record cards on subject and 3 other properties |
Respondent’s Evidence
Respondent testified as to her valuation of the subject property.The following exhibits were received into evidence on behalf of Respondent.
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EXHIBIT |
DESCRIPTION |
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1 |
Sales Comparison Grid |
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2 |
Property Record Cards on Subject and 3 sale properties |
FINDINGS OF FACT
1.Jurisdiction over this appeal is proper.Complainant timely appealed to the State Tax Commission from the decision of the Hickory County Board of Equalization.
2.The subject property is located at Rural Route # 1, Box 1980, Urbana, Missouri.The property is identified by map parcel number 9-8-28-2-1-5.The property consists of a 240 x 88 foot lot.The lot is improved by a ranch, single-family structure of average quality construction.The house appears to be in average condition.The residence has a total of six rooms, three bedrooms, two bath, and contains 1,792 square feet of living area.There is a full basement and an attached 20 x 20 garage. There is a detached 24 x 36 garage.The detached garage suffers from various items of deferred maintenance, including roofing, siding and foundation repairs.
3.There was no evidence of new construction and improvement from January 1, 2007, to January 1, 2008.
4.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, 2007, to be $93,000, as proposed.
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.[1]
Presumption In Appeals
There is a presumption of validity, good faith and correctness of assessment by the CountyBoardof Equalization.[2]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.[3]Complainant’s evidence failed to met the required standard.The presumption of correct assessment was not rebutted.
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.[4]It is the fair market value of the subject property on the valuation date.[5]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.[6]
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.[7]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.[8]The method of valuation used by Mr. Sands was the opinion of a banker relative the amount of money he would loan on the Sands property.A banker’s opinion as to the loan value of property has never been recognized by the Commission or the courts of this state as a methodology for arriving at value for ad valorem tax purposes.An opinion based upon such a methodology fails to establish that the market value of the subject property would only have been $93,000 as of January 1, 2007.
Complainant’s Burden of Proof
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, 2007.[9]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.”[10]
Substantial evidence can be defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.[11]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.[12]
Owner’s Opinion of Value
The owner of property is generally held competent to testify to its reasonable market value.[13]The owner’s opinion is without probative value however, where it is shown to have been based upon improper elements or an improper foundation.[14]An opinion of value based upon what a banker might loan on the property does not constitute a proper foundation or proper elements for valuation.Therefore, no probative weight can be given Mr. Sands’ opinion of $93,000.
The conversation with the banker that resulted in the opinion of $93,000 was held in 2008.The testimony of Mr. Sands failed to establish that in any event the banker was giving an opinion of fair market value as of January 1, 2007.Loan value is not fair market value.Loan value can generally be considered to be 80 to 90% of the selling price or fair market value.Applying that standard to the $93,000 loan value opined by Mr. Sands’ banker, the range of indicated market value would be from $103,300 to $116,250.Such a range of value supports the value determined by the Board.
Complainant’s exhibits fail to provide any relevant information to establish a fair market value for the property under appeal.
Exhibit A – Garage Photographs
The primary point of contention addressed by Mr. Sands is the value placed on the detached garage under the Assessor’s mass valuation cost system.The photographs only establish that the garage has certain items of deferred maintenance.Exhibit A provides no basis upon which it can be concluded what contributory value the garage adds to the property.
Exhibit B – Repair Estimates
The bids for the various repairs provide costs for the cited repairs.However, costs for repair do not establish contributory value of a given improvement.
Exhibit C – Assessment Histories
The information provided in Exhibit C is totally irrelevant to a determination of the fair market value of Complainant’s property.Comparing the assessment of one property (Complainant’s) to four other properties provides no market data to establish that as of
January 1, 2007, the fair market value of Complainant’s property to be $93,000.
Summary and Conclusion
Mr. Sands presented no evidence rebutting the presumption of correct assessment by the Board.Complainant’s evidence failed establish the fair market value of the subject property to be $93,000.Therefore, it is unnecessary to review Respondent’s evidence.The presumption of correct assessment at an appraised value of $106,580 by the Board stands.
ORDER
The assessed valuation for the subject property as determined by the Board of Equalization for Hickory County for the subject tax day is AFFIRMED.
The assessed value for the subject property for tax year 2008 is set at $20,250.
Complainant may file with the Commission an application for review of this decision within thirty days of the mailing date of the Certificate of Service of this decision.The application shall contain specific grounds upon which it is claimed the decision is erroneous.Said application must be mailed 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 appeal is based will result in summary denial. [15]
The Collector of Hickory County, as well as the collectors of all affected political subdivisions therein, shall continue to hold the disputed taxes pending a 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 December 16, 2008.
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 16thday of December, 2008, to:John Sand, Rt. 1, Box 1980, Urbana, MO 65676, Complainant; James Hackett, Prosecuting Attorney, P.O. Box 154, Hermitage, MO 65668, Attorney for Respondent; Kay Chilton, Assessor, P.O. Box 97, Hermitage, MO 65668; Jeanne Lindsey, Clerk, P.O. Box 3, Hermitage, MO 65668-0003; George McCoy, Collector, P.O. Box 92, Hermitage, MO 65668.
___________________________
Barbara Heller
Legal Coordinator
[2] 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).
[3] Hermel, supra; Cupples-Hesse Corporation v. State Tax Commission, 329 S.W.2d 696, 702 (Mo. 1959).
[4] 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).
[6] 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.
[7] 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).
[8] 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).
[10] 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).
[13] 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).
[14] 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).