STATE TAX COMMISSION OF MISSOURI
|JOSEPH HILL SR.,||)|
|)||Appeal No. 21-34002|
|)||Parcel No. 02-1.0-11.0-1-001-023|
|ROBERT BOYER, ASSESSOR,||)|
|JEFFERSON COUNTY, MISSOURI,||)|
DECISION AND ORDER
Joseph Hill, Sr., (Complainant) appeals the Jefferson County Board of Equalization’s (BOE) decision finding the true value in money (TVM) of the subject residential property on January 1, 2020, was $147,200. Complainant claims the property is overvalued and proposes a value of $100,800. Complainant did not produce substantial and persuasive evidence of overvaluation. The BOE’s decision is affirmed.
The evidentiary hearing was conducted on December 16, 2021, at the Jefferson County Administration Building in Hillsboro, Missouri. Complainant appeared pro se. Respondent was represented by counsel Floyd Norrick.
FINDINGS OF FACT
- The Subject Property. The subject property is residential real property located on a cul-de-sac at 139 Sir Moss Lane in Fenton, Missouri. The subject property consists of a 0.34 acre lot improved with a 1,532 square-foot, single-story home built in 1980. The home has a 576 square-foot attached garage, full basement, a 120 square-foot patio, and a 160 square-foot wooden deck. The home is wood frame with a brick veneer. The home is well-maintained. Both the exterior and interior are in good condition.
- Assessment and Valuation. The BOE classified the subject property as residential property and determined the TVM on January 1, 2021, was $147,200.
- Complainant’s Evidence. Complainant introduced Exhibits A1 through A31. Respondent objected to Complainant’s exhibits for lack of relevance and foundation. Complainant’s exhibits are admitted to be given the weight they are due. Complainant’s exhibits and associated testimony are summarized as follows:
|Exhibit A1||Complainant’s notes dated 12/15/2021 and entitled “Last minute change in evidence.” Complainant asserts he received an email from Respondent’s counsel and an office staff member attaching an appraisal utilizing different comparable properties than those considered by the BOE. Complainant testified this exhibit and his remaining exhibits show the appeal process is unfair.|
|Exhibit A1A||Blank page.|
|Exhibit A2 – A5||Complainant’s notes dated December 8, 2021, asserting Respondent failed to use a sales comparison approach based on properties that are not comparable, that failed to make the required adjustments for property differences, and that utilized incorrect property data.|
|Exhibit A6||Complainant’s detailed explanation of Respondent’s alleged use of incorrect property data for the comparable properties and the subject. Complainant testified this exhibit shows Respondent incorrectly valued his home as a “masonry” structure and incorrectly assumed there is another building on the property.|
|Exhibit A7||Blank page.|
|Exhibit A8 – A13||Complainant’s notes regarding property data, sales data, and pictures of five comparable sales Respondent allegedly tilized to show value in the BOE proceedings. Complainant asserts the information shows the BOE accepted “unverified nonsense” provided by Respondent.|
|Exhibit A14 – A15||Complainant’s notes accompanied by two pictures showing the front of the subject property and a side-rear view showing a covered deck on the back of the home. The accompanying notes assert the brick pattern shows the home is not a masonry structure and is, instead, a “frame structure with a brick veneer finish[.]”|
|Exhibit A16||Aerial photo with superimposed plat map prepared by Respondent’s office showing the location of the subject property.|
|Exhibit A17||Complainant’s notes referencing the Parcel Information Report introduced as Exhibit A18. The notes state Respondent incorrectly assumes there are “other buildings” on the subject property and fails to list a lot size.|
|Exhibit A18||Parcel Information Report from Respondent’s office listing Complainant and his wife as the owners of 139 Sir Moss Lane, listing property data, and showing a “Total Market Value” of $147,200. Includes Complainant’s handwritten notes showing Respondent’s mass appraisal cannot be accurate without showing the lot size and by assuming there are “other buildings” on the property.|
|Exhibit A19||Complainant’s notes asserting the BOE did not require Respondent to verify property data and improperly relied on this unverified data in determining the value of the subject property.|
|Exhibit A20 – A21||Copy of BOE hearing notice and envelope addressed to Complainant and his wife. Handwritten notations indicate the suggested evidence “only applies to property owner.”|
|Exhibit A22||Notice from the County Clerk regarding process for a BOE hearing. Handwritten notations indicate the suggested evidence “only applies to property owner.”|
|Exhibit A23||Blank page.|
|Exhibit A24||Letter from Respondent’s office dated 3/28/20 noting a representative of Respondent’ office was at the subject property and updated records of the “outside measurement” the structures on the subject property. Complainant testified they did not actually measure the property. Includes Complainant’s handwritten notations indicating invitations to discuss issues with Respondent’s office are “useless.”|
|Exhibit A25||Complainant’s notes dated 12/8/21 asserting Respondent offered a “useless” invitation at the BOE hearing to discuss the assessment.|
|Exhibit A26||Copy of BOE decision setting the “Real Estate Value” of the subject property at $147,200 for 2021. Includes Complainant’s handwritten notations criticizing the appeal process.|
|Exhibit A27 – A29||Three-page letter from Complainant to BOE asserting errors in the BOE valuation. Complainant asserts the subject property should be valued as follows: “$1,200 per month [rent] x 12 months = $14,400 x 7 years = $100,800 estimated value.” Complainant asserts the “7 year factor is the one I’ve been using for years and it works for me.” Complainant also asserts he should not bear the burden of proof.|
|Exhibit A30||Letter dated April 21, 2021, from Complainant to Respondent requesting the property record card for the subject property.|
|Exhibit A31||Blank page.|
On cross-examination, Complainant acknowledged he is not an appraiser and has no appraisal training. Complainant conceded he was unfamiliar with the term “cap rate” as used in the income approach to value.
- Respondent’s Evidence. Respondent introduced Exhibit 1. Exhibit 1 is an appraisal report prepared by Walter Jones. Jones is a licensed Missouri Real Estate Appraiser. Since 2015, Mr. Jones has served as a Residential Field Appraiser for the Jefferson County Assessor’s office.
Jones utilized the cost approach and the sales comparison approach to estimate the TVM of the subject property as of January 1, 2021, was $200,000. (Ex. 1 at 10-13; 14-26)
For the cost approach, Jones estimated a base cost per square foot of $102 based on the Marshall & Swift Residential Cost Handbook. Jones multiplied the cost per square foot by the subject’s 1,532 square feet of living area to estimate a cost of $156,264. (Ex. 1 at 11) The estimated cost of the additional features was $70,789, resulting in total base cost of $227,053. Application of the local multiplier cost adjustment resulted in a base cost of $249,758. Jones deducted $74,758 in depreciation and added $29,600 in land value as determined by recent sales of vacant land in Fenton. (Id. at 12) Jones’ cost approach yielded an estimated value of $204,431. (Id. at 11)
For the sales comparison approach, Jones utilized four comparable properties. The comparable properties sold between January 2020 and January 2021. The sale prices ranged from $197,500 to $240,000. Notably, the first and second comparable sales are located near the subject property on Sir Moss Lane. The comparable sales are summarized as follows:
|Address||139 Sir Moss Lane||118 Sir Moss Lane||111 Sir Moss Lane||1218 Parkspur||13 Park Lawn Dr.|
|Sale Date||July 2020||January 2021||June 2020||January 2020|
|Living Area||1532 sq. ft.||1408 sq. ft.||1815 sq. ft.||1534 sq. ft.||1660 sq. ft.|
|Covered Wood Deck||Yes||No||Yes||No||Yes|
|Adjusted Sale Price||$216,690||$235,755||$197,000||$207,610|
Jones’ testimony included a description of his experience, education, and credentials. Jones credibly testified he prepared Exhibit 1 and verified the data contained therein by utilizing various sources typically relied on by real estate appraisers.
- Value. The TVM of the subject property on January 1, 2021, was $147,200.
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). The assessed value in the odd-numbered year “shall apply in the following even-numbered year, except for new construction and property improvements which shall be valued as though they had been completed as of January first of the preceding odd-numbered year.” Section 137.115.1.
“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 true value in money is an issue of fact for the STC.” Cohen v. Bushmeyer, 251 S.W.3d 345, 348 (Mo. App. E.D. 2008).
“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 STC has wide discretion in selecting the appropriate valuation method but “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Snider, 156 S.W.3d 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). “Although technical rules of evidence are not controlling in administrative hearings, fundamental rules of evidence are applicable.” Mo. Church of Scientology v. State Tax Comm’n, 560 S.W.2d 837, 839 (Mo. banc 1977).
Section 138.060.1 provides that in an STC appeal, Respondent, as the assessor of a first-class charter county, “shall not advocate nor present evidence advocating a valuation higher than that value finally determined by the assessor or the value determined by the BOE, whichever is higher, for that assessment period.” Respondent’s Exhibit 1 estimates a value higher than that determined by the BOE. When Respondent introduces “evidence indicating a higher value than the value finally determined by the assessor or the value determined by the board of equalization … such evidence will only be received for the purpose of sustaining the assessor’s or board’s valuation, and not for increasing the valuation of the property under appeal.” 12 CSR 30-3.075(1). Respondent’s Exhibit 1 is admissible for purposes of sustaining the BOE value.
- 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 misclassified or overvalued. Westwood P’ship v. Gogarty, 103 S.W.3d 152, 161 (Mo. App. E.D. 2003). The BOE’s valuation is presumptively correct. Tibbs, 599 S.W.3d at 7. The “taxpayer may rebut this presumption by presenting substantial and persuasive evidence that the valuation is erroneous.” Id. (internal quotation omitted). The taxpayer also 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 v. State Tax Comm’n, 722 S.W.2d 72, 77 (Mo. banc 1986) (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 alsoWhite 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 rebutting the BOE’s presumptively correct decision valuing the subject property at $147,200. Complainant asserted his proposed value of $108,000 is based on the income approach. Complainant calculated his proposed value as follows: “$1,200 per month [rent] x 12 months = $14,400 x 7 years = $100,800 estimated value.”
Complainant’s version of the income approach is not persuasive. Complainant’s income projection is not based on market rent derived from market data. (See Exhibit A27 – A29) Complainant’s “7 year factor” has no market basis and is not a recognized component of the income approach to value. Complainant’s approach includes no capitalization rate or calculation permitting a value estimate based on market-derived income projections. Complainant’s proposed methodology is inconsistent with the necessary elements of the income approach and does not provide credible and persuasive value estimate.
The STC “cannot base its decision on opinion evidence that fails to consider information that should have been considered under a particular valuation approach.” Snider, 156 S.W.3d at 348. Complainant’s proposed income approach fails to consider necessary information and, therefore, does not provide substantial and persuasive evidence of the TVM of the subject property as of January 1, 2021.
By contrast, though not required to do so, Respondent produced substantial and persuasive evidence supporting the BOE’s $147,200 valuation. Respondent’s Exhibit 1 used the cost approach and the sales comparison approach to estimate the TVM of the subject property was $200,000 as of January 1, 2021. Respondent’s Exhibit 1 supports the BOE’s presumptively correct value. 12 CSR 30-3.075(1).
CONCLUSION AND ORDER
The BOE decision is affirmed. The TVM of the subject property as of January 1, 2021, was $147,200.
Application for Review
A party may file 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 of Missouri, 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.
Failure to state specific facts or law upon which the application for review is based will result in summary denial. Section 138.432.
The Collector of the Jefferson County, and 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 the disputed taxes have been disbursed pursuant to a court order under the provisions of section 139.031.
SO ORDERED December 31, 2021.
Eric S. Peterson
Senior Hearing Officer
State Tax Commission
Certificate of Service
I hereby certify that a copy of the foregoing has been electronically mailed and/or sent by U.S. Mail on December 31, 2021, to: Complainant(s) and/or Counsel for Complainant(s), the County Assessor and/or Counsel for Respondent and County Collector.
 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.
 The income approach is also not typically used to value single-family homes because adjusted, market-based sales data is readily available and income potential often does not represent the motivations of market participants.