STATE TAX COMMISSION OF MISSOURI
| JOHN SCHROETER, | ) | |
| Complainant, | ) | Appeal No. 19-10775 |
| ) | ||
| v. | ) | Parcel No. 31K110224 |
| ) | ||
| JAKE ZIMMERMAN, ASSESSOR, | ) | |
| ST. LOUIS COUNTY, MISSOURI | ) | |
| Respondent. | ) | |
| ) |
DECISION AND ORDER
John Schroeter (Complainant) appeals the St. Louis County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject property on January 1, 2019, was $156,400 as residential and $61,300 as agricultural, with a total assessed value of $37,080. Complainant claims overvaluation, misgraded agricultural land, and misclassification, asserting the subject property should be classified entirely as agricultural. Complainant proposes a value of $136,700 or closer to $149,000.[1] Complainant did not produce substantial and persuasive evidence establishing overvaluation, misgraded agricultural land, or misclassification. The BOE’s decision is affirmed.[2]
Complainant proceeded pro se. Respondent was represented by counsel Monique McNutt. Complainant’s request to waive an oral evidentiary hearing and have the appeal decided upon exhibits and other evidence was consented to by Respondent and granted.
FINDINGS OF FACT
- Subject Property. The subject property is located at 5912 Hawkins Fuchs Rd. in Saint Louis, Missouri. The parcel/locator number is 31K110224.
According to the Letter, after the death of Complainant’s grandmother in 1989, an over twenty-acre farm was divided in half to settle her estate. Complainant’s father received the subject property, and Complainant’s father’s siblings received the other half of the farm, 5942 Hawkins Fuchs Rd. (adjacent property). The subject property consists of 10.12 mostly wooded acres with a vacant farmhouse that was built in the late 1800s and is surrounded by farm buildings that are in fair to poor condition. Complainant indicated that he farms vegetables at 4676 Meramec Bottom Road in a flood plain and moves farm equipment between that location and the subject property based on river levels. According to the Letter, the subject property has always been used for agriculture, “the farm buildings are used to park farm machinery and implements,” and “[i]t is highly unlikely” that the subject property “will ever be developed because there is no sewer available.”
- Respondent and BOE. Respondent classified the subject property as residential and agricultural and determined the TVM on January 1, 2019, was $159,800 and $61,300, respectively. The BOE classified the subject property as residential and agricultural and independently determined the TVM on January 1, 2019, was $156,400 and $61,300, respectively.
- Complainant’s Evidence. In the Letter, Complainant indicated that his opinion of value was “closer to $149,000.” Complainant asserted that the proper classification of the subject property was agricultural in the Complaint for Review of Assessment. Complainant submitted (1) the Letter; (2) Exhibit A, a two-page Real Estate Tax History Statement followed by a two-page Real Estate Information, Ownership, Legal and Assessments, for the adjacent property; and (3) Exhibit B,[3] a thirty-page Appraisal of the subject property by Thomas R. Noonan, Noonan Appraisers, stating a $149,000 opinion of value of the subject property as of April 13, 2016.
In the Letter, Complainant asserted two arguments in support of his overvaluation claim. First, the appraised value of the subject property increased by a substantial amount, a total of $81,000, from $136,700 in 2018 to $217,700 in 2019.[4] Second, the appraised value of the adjacent property was much less than the appraised value of the subject property although both properties were originally part of the same farm.
Exhibit A shows that as of January 1, 2019, the adjacent property was classified as agricultural and had a TVM of $10,500.
- Respondent’s Evidence. Respondent submitted (1) Exhibit 1, the Findings and Notice of Decision of the BOE dated October 4, 2019, determining the total appraised value of the subject property was $217,700 as of January 1, 2019, which included $156,400 as residential and $61,300 as agricultural; (2) Exhibit 2, the Restricted Appraisal Report of Residential Appraiser Adam Luesse dated June 5, 2020, determining the market value of the land of the subject property was $450,000 as of January 1, 2019, utilizing the sales comparison approach; and (3) the Written Direct Testimony of Mr. Luesse.
- Value. The TVM of the subject property on January 1, 2019, was $156,400 as residential and $61,300 as agricultural, with a total assessed value of $37,080.
CONCLUSIONS OF LAW
- Assessment and Valuation. Residential real property is assessed at 19% of its TVM as of January 1 of each odd-numbered year. Section 137.115.5(1)(a). “True value in money is the fair market value of the property on the valuation date, and is a function of its highest and best use, which is the use of the property which will produce the greatest return in the reasonably near future.” Snider v. Casino Aztar/Aztar Mo. Gaming Corp., 156 S.W.3d 341, 346 (Mo. banc 2005) (internal quotation omitted). The fair market value is “the price which the property would bring from a willing buyer when offered for sale by a willing seller.” Mo. Baptist Children’s Home v. State Tax Comm’n, 867 S.W.2d 510, 512 (Mo. banc 1993). Determining the TVM is a factual issue for the STC. Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008). The “proper methods of valuation and assessment of property are delegated to the Commission.” Savage v. State Tax Comm’n, 722 S.W.2d 72, 75 (Mo. banc 1986).
“For purposes of levying property taxes, the value of real property is typically determined using one or more of three generally accepted approaches.” Snider, 156 S.W.3d at 346. The three generally accepted approaches are the cost approach, the income approach, and the comparable sales approach. Id. at 346-48; see also St. Louis Cty. v. Sec. Bonhomme, Inc., 558 S.W.2d 655, 659 (Mo. banc 1977).
The comparable sales approach “is most appropriate when there is an active market for the type of property at issue such that sufficient data are available to make a comparative analysis.” Snider, 156 S.W.3d at 348. “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 347-48 (internal quotation omitted). “Comparable sales consist of evidence of sales reasonably related in time and distance and involve land comparable in character.” Id. at 348.
- Evidence. The hearing officer is the finder of fact and determines the credibility and weight of the evidence. Kelly v. Mo. Dep’t of Soc. Servs., Family Support Div., 456 S.W.3d 107, 111 (Mo. App. W.D. 2015). The finder of fact in an administrative hearing determines the credibility and weight of expert testimony. Hornbeck v. Spectra Painting, Inc., 370 S.W.3d 624, 632 (Mo. banc 2012).
- Complainant’s Burden of Proof. The taxpayer bears the burden of proof and must show by a preponderance of the evidence that the property was overvalued or misclassified. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs v. Poplar Bluff Assocs. I, L.P., 599 S.W.3d 1, 7 (Mo. App. S.D. 2020). The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous” and must prove “the value that should have been placed on the property.” Id. “Substantial evidence is that evidence which, if true, has probative force upon the issues, and from which the trier of fact can reasonably decide the case on the fact issues.” Savage, 722 S.W.2d at 77 (internal quotation omitted). Evidence is persuasive when it has “sufficient weight and probative value to convince the trier of fact.” Daly v. P.D. George Co., 77 S.W.3d 645, 651 (Mo. App. E.D. 2002); see also White v. Dir. of Revenue, 321 S.W.3d 298, 305 (Mo. banc 2010) (noting the burden of persuasion is the “party’s duty to convince the fact-finder to view the facts in a way that favors that party”).
- Complainant Did Not Prove Overvaluation. Complainant did not produce substantial and persuasive evidence to support his opinion of value. Questioning the difference between the TVM of the adjacent property compared to the subject property is not evidence of the TVM of the subject property. Further, Exhibit A, which shows that the adjacent property was classified as agricultural with a TVM of $10,500 as of January 1, 2019, does not support Complainant’s opinion of a significantly higher value of $136,700 or $149,000 for the subject property. A reasonable assumption is that different characteristics and uses of the properties account for the difference between the TVM of the adjacent property and the subject property.
Additionally, the $81,000 difference in the TVM of the subject property between January 1, 2017, and January 1, 2019, is not substantial and persuasive evidence of overvaluation. The observation that the appraised value increased from one reassessment cycle to the next does not rely on any generally accepted approach to show overvaluation.
Although Exhibit B did utilize the accepted sales comparison approach, it is not substantial and persuasive evidence in support of Complainant’s opinion of value as of January 1, 2019. Exhibit B shows that Mr. Noonan’s opinion of value as to the subject property was $149,000 as of April 13, 2016. Exhibit B does not address the value of the subject property as of January 1, 2019, over two years after the effective date of Mr. Noonan’s appraisal. Therefore, Complainant did not prove overvaluation.
- Complainant Did Not Prove Misgraded Agricultural Land. Complainant did not produce substantial and persuasive evidence to support his claim of misgraded agricultural land. Although Complainant chose misgraded agricultural land as one of his grounds for appeal (Complaint at 1) and indicated that the subject property “is mostly wooded because of steep terrain and highly erodible soil” (Letter at 1), Complainant did not specifically indicate why he believes the land is misgraded or assert what he believes to be the proper grade for the agricultural land. When taxpayers are the “moving parties seeking affirmative relief,” they bear “the burden of proving the vital elements of their case.” Reeves v. Snider, 115 S.W.3d 375, 379 (Mo. App. S.D. 2003). Complainant did not meet his burden of proving misgraded agricultural land.
- Complainant Did Not Prove Misclassification. Complainant did not produce substantial and persuasive evidence to support his opinion that the portion of the subject property classified as residential was misclassified and should be classified as agricultural. “Agricultural and horticultural property” includes, in applicable part, “all real property used for agricultural purposes and devoted primarily to the raising and harvesting of crops; to the feeding, breeding and management of livestock which shall include breeding, showing, and boarding of horses; to dairying, or to any other combination thereof; and buildings and structures customarily associated with farming, agricultural, and horticultural uses.” Section 137.016.1(2). “[W]here agricultural and horticultural property . . . also contains a dwelling unit or units, the farm dwelling, appurtenant residential-related structures and up to five acres immediately surrounding such farm dwelling shall be residential property . . . .” Section 137.016.4. Because the subject property includes a farmhouse, at least a portion of the subject property must be classified as residential pursuant to the plain language of section 137.016.4. Therefore, Complainant has not shown that the entire subject property should be classified as agricultural property.
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2019, was $156,400 as residential and $61,300 as agricultural, with a total assessed value of $37,080.
Application for Review
A party may file with the Commission an application for review of this decision within 30 days of the mailing date set forth in the certificate of service for this decision. The application “shall contain specific detailed grounds upon which it is claimed the decision is erroneous.” Section 138.432. The application must be in writing, and may be mailed to the State Tax Commission, P.O. Box 146, Jefferson City, MO 65102-0146, or emailed to Legal@stc.mo.gov. A copy of the application must be sent to each person listed below in the certificate of service.
Disputed Taxes
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.
SO ORDERED February 26, 2021.
Laura A. Stork-Elam
Senior Hearing Officer
State Tax Commission
Certificate of Service
I certify that on February 26, 2021, a copy of the foregoing was sent via email to
Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
Elaina McKee
Legal Coordinator
[1] In the Complaint for Review of Assessment, Complainant’s proposed value was $136,700. However, in a letter submitted by Complainant discussing the subject property and his contentions as to value (Letter), Complainant revised his proposed value to “closer to $149,000.”
[2] Complainant timely filed a complaint for review of assessment. The State Tax Commission (STC) has authority to hear and decide Complainant’s appeal. Mo. Const. art. X, Section 14; section 138.430.1, RSMo 2000. All statutory citations are to RSMo 2000, as amended.
[3] For ease of reference, the appraisal submitted by Complainant has been labeled Exhibit B.
[4] In the Letter, Complainant indicated that the difference in value was from “one year to the next.” Section 137.115.1 provides that “new assessed values shall be determined as of January first of each odd-numbered year” and such values “apply in the following even-numbered year” absent new construction or property improvements. The appraised value of the subject property as of January 1, 2017, was $136,700, which remained the same for 2018.